Judge blocks Uber and Lyft from classifying drivers as contractors

Lyft Inc and Uber Technologies

A California judge has granted the state’s petition for a preliminary injunction blocking Uber Technologies and Lyft from classifying their drivers as independent contractors as opposed to employees.

KEY POINTS:

  • California judge grants a request for a preliminary injunction blocking Uber Technologies and Lyft from classifying their drivers as independent contractors
  • Uber and Lyft have been accused of violating Assembly Bill 5 (“AB5”), a state law requiring companies to classify workers as employees
  • Several hundred thousand “gig” workers, including many at ride-hailing companies and app-based food delivery services, are affected by AB5

The ruling by Judge Ethan Schulman of San Francisco Superior Court is a defeat for the ride-hailing companies, as they defend against a May 5th lawsuit by state Attorney General Xavier Becerra and the cities of Los Angeles, San Diego and San Francisco.

Uber and Lyft was accused of violating Assembly Bill 5 (“AB5″), a new state law requiring companies to classify workers as employees if they controlled how employees did their jobs, or the work was part of their normal business.

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In a 34-page decision faulting the money-losing companies'”prolonged and brazen refusal” to comply with state law, Schulman said the plaintiffs showed an”overwhelming likelihood” they could prove Uber and Lyft classified drivers illegally.

“This is a resounding victory for thousands of Uber and Lyft drivers that are working hard – and, in this pandemic, devoting danger every day – to provide for their families,” Los Angeles City Attorney Mike Feuer said in a statement.

Judge Schulman delayed enforcing his order by 10 days to allow appeals, which Lyft said it will pursue.

“Drivers don’t want to be workers,” Lyft said in a statement.

“Ultimately, we believe this issue will be decided by California voters and that they will side with drivers.”

Uber did not immediately respond to requests for comment.

Several hundred thousand “gig” workers, including many at ride-hailing companies and app-based food delivery services, are affected by AB5, which took effect on the 1st of January and had broad support from organised labour.

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Schulman said the defendants’ argument they were not”hiring entities” covered by AB5″ flies in the face” of Uber Technologies claims in additional litigation, and their “concerted effort” to overturn the law in November.

He also said the public could face significant harm if motorists were denied employee benefits such as minimum wage, paid sick and family leave, unemployment insurance and workers’ compensation insurance.

“These harms are not mere abstractions; they represent actual injuries to actual working people,” Schulman wrote.

The judge said Uber and Lyft had themselves to blame if their resisting state laws contributed to any “far-reaching” effects an injunction might have.

“Defendants may not evade legislative mandates merely because their businesses are so big that they influence the lives of many thousands of people,” he wrote.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Reuters. Reporting by Jonathan Stempel in New York. Editing by Chris Reese and Dan Grebler/

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