Gig Workers Rising: California Appeals Court decides Uber and Lyft drivers must be classified as employees Under State Law
California Appeals Court decides Uber and Lyft drivers must be classified as employees Under State Law
Stone House Capital Partners returned 4.1% for September, bringing its year-to-date return to 72% net. The S&P 500 is up 14.3% for the first nine months of the year. Q3 2021 hedge fund letters, conferences and more Stone House follows a value-based, long-long term and concentrated investment approach focusing on companies rather than the market Read More
California Appeals Court Orders Uber And Lyft To Classify Drivers As Employees
Today, the California Appeals Court, in a 74-page opinion, affirmed the injunction issued on August 10 requiring Uber and Lyft to refrain from their continued violation of the law and classify their drivers as employees within 30 days. This means that Uber and Lyft must soon begin complying with basic employment laws, like paying into the unemployment insurance in California or providing sick leave for their workers.
In its ruling, the court recognized the steep hill the companies have to climb, suggesting that their ability to show that they are outside of the ABC test—enacted with the passage of AB 5-is “daunting.” It also found that Uber, Lyft, and other gig companies must comply with state law given that a workers’ “fundamental need to earn income for their families’ survival may lead them to accept work for substandard wages or working conditions.”
This is a huge victory for workers. Once again, the state has looked at the law and found it clear: Uber and Lyft drivers deserve basic protections and benefits. The court went further, completely disassembling the argument that Uber and Lyft are “platforms” and not the employers of the hundreds of thousands of workers who are core to their business.
Prop 22: Denying Employee Rights
This decision also makes clear what workers have long understood: Prop. 22—a dangerous and deceptive ballot initiative for which Uber and Lyft have contributed over $100 million to pass—is nothing more than an attempt to deny workers access to the employee rights and benefits. First the state legislature, then the governor, and now the courts have all agreed that drivers are employees under state law, and Prop. 22 is nothing more than an attempt by multi-billion dollar gig companies to undo that recognition.
When Prop. 22 is defeated, the companies’ bag of tricks will have shrunk, as both voters and now the courts will have recognized that gig workers should receive employee benefits, protections, and wages.
In response to this decision, Uber and Lyft may well announce an extreme change in order to extort voters into voting yes on Prop. 22—such as a threat to temporarily suspend services. This will be a bluff intended to scare voters during this election. These companies have never pulled out of a market as large as California before, even when cities across the world have sought to ensure they comply with local labor laws.
It’s important drivers and riders don’t get distracted by Uber & Lyft fear-mongering. As Orlando Raylove Mims, a driver at SFO, said today: “California is Uber’s moneymaker. They ain’t gonna leave California.”
Vote No On Prop 22
Workers, advocates, and voters should not be deceived. We cannot allow corporations to blackmail us into voting in their best interests. The Appellate Court today has stood firm for the rule of law, something that would be undermined if Prop. 22 were to pass. This is why we ask all Californians to stand with workers and to vote no on Prop. 22.
While this legal victory today is directed at two companies, this fight is far broader. This is about the future of work in this country. This is about securing good jobs with real benefits for generations to come. If Uber and Lyft are successful in passing Prop. 22 and undo the will of the people, they will inspire countless other corporations to adapt their business models and misclassify workers in order to further enrich the wealthy few at the expense of their workforce.
We can’t let the billion dollar corporations off the hook. California, stand with working people, not CEOs, and vote no on Prop. 22.