The state argued that by classifying their drivers as contractors, Uber was losing benefits to lift workers under a law that went into effect Jan. 1. A law known as Assembly Bill 5 or AB-5 allows companies to treat their workers as independent contractors only if they work outside the company’s core business free from company control.
A re-notification of their workers would represent a radical change that would be mandatory for both businesses, treating them as independent contractors building large ships of drivers and not providing employees with benefits such as minimum wages and overtime. , Paid sick leave, unemployment insurance.
The ruling prompted the companies to appeal. But Associate Justice John Streeter of the Court of Appeals wrote in his decision Thursday that it was valid to bar Uber and Lift from classifying their drivers as independent contractors.
“It is broad in scope, no doubt, but also the extent of alleged violations,” he wrote.
“Uber and Lift used their muscles and influence to prevent their drivers from being treated as workers deserving of payroll and benefit protection,” Attorney General Xavier Beckra said in a statement after the verdict. “It’s time for Uber and Lift to play by the rules.”
“This ruling makes it more urgent for voters to stand with drivers and vote yes to Prop 22 than ever before,” Lift spokeswoman Julie Wood said in a statement to CNN Business on Thursday.
If the measure is not passed, it will “prevent ride-share drivers from remaining independent contractors, lay off millions of Californians and stop ride-sharing,” Uber said in a statement. In many parts of the state.
The CEOs of both companies told the California Court of Appeals last month that they planned to comply with the law if Prop 22 fails to comply with a lower court order.
Lift CEO Logan Green wrote that such an implementation could include the cessation of ride-sharing activities in all or some parts of California.
– Jean Disease contributed to this report.