Concert employee Jesus Barra stands on top of his car during a demonstration outside Los Angeles City Hall to urge voters to vote against Proposition 22, the November ballot measure that would classify ride-hailing drivers as independent contractors rather than employees or agents of Los Angeles, California, USA, October 8, 2020.
Mike Blake | Reuters
Ride-sharing programs including Uber and Lyft can continue to treat their drivers as independent contractors, a California appeals court ruled Monday, overturning a lower court ruling that barred them from doing so.
In November 2020, California voters approved Proposition 22, which allowed manufacturers of ride-sharing and delivery programs to classify their drivers as independent contractors. In 2021, a California judge ruled the proposal unconstitutional, saying it violated the legislature’s authority to set workplace standards. The state and a group representing the companies and other parties appealed the decision, and Monday’s ruling was in their favor.
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Shares of ride-sharing and delivery companies rose on the news, with Uber, Elevatorand Door panel notch increase of more than 4% after hours.
Proposition 22 created a set of criteria that determined whether ride-sharing drivers were employees or independent contractors> In practice, it exempted Uber and similar companies from enforcing minimum wage, overtime or workers’ compensation laws for hundreds of thousands of California ride-sharing drivers. Instead, the ballot measure required the companies to provide reimbursements and medical “subsidies” based on “busy” driving time, as well as other benefits, including safety training and “sexual harassment training.”
It was the most expensive ballot measure in California history, with ride-hailing companies contributing more than $181 million to the Yes campaign. The companies reportedly moved aggressively to encourage their drivers to support the initiative, which passed with 58.6% of the vote in favor.
A group of carpool drivers tried to overturn Proposition 22 and won a lower court ruling. But in a 63-page opinion released Monday, California judges from the 1st Circuit Court of Appeals disagreed with that court and upheld the proposal.
“Proposition 22 does not intrude on the Legislature’s workers’ compensation authority or violate the single-entity rule,” the opinion said.
“Today’s decision is a victory for app workers and the millions of Californians who voted in favor of Prop 22. Across the state, drivers and couriers said they are pleased with Prop 22, which gives them new benefits while preserving the app’s unique flexibility.” based work,” Uber Chief Legal Officer Tony West said in a statement.