- In November 2020, California voters approved Proposition 22, which allowed ride-sharing apps like Uber and Lyft to classify their drivers as independent contractors, limiting companies’ obligation to provide certain benefits.
- A group of drivers challenged the motion, and in 2021 a judge said it was unconstitutional.
- But on Monday, an appeals court overturned that ruling, allowing Show 22 to stand.
Ride-sharing apps including Uber and Lyft can continue to treat their drivers as independent contractors, which a California appeals court ruled on Monday, overturning a lower court’s decision preventing them from doing so.
In November 2020, California voters approved Proposition 22, which allowed makers of ride-sharing and delivery apps to classify their drivers as independent contractors. A California judge ruled the proposal unconstitutional in 2021, arguing that it violated the legislature’s power to set standards in the workplace. the country and Group representing companies and others The parties appealed that decision, and Monday’s ruling came in their favour.
Shares of the ride-hailing and delivery companies surged on the news, with Uber, Lyft and Doordash notching gains of more than 4% after hours.
Jesus Parra, a laborer for the app-based business, stands in his car during a demonstration outside Los Angeles City Hall urging voters to vote “no” on Proposition 22, a November ballot measure that would classify app-based drivers as independent contractors rather than employees. Or agents, in Los Angeles, California, United States, October 8, 2020.
Mike Blake | Reuters
Proposition 22 created a set of criteria that defines whether ride-hailing drivers are employees or independent contractors> In practice, it exempted Uber and similar companies from following certain minimum wage, overtime, or workers’ compensation laws for hundreds of thousands of California cab drivers. Instead, it is Polling measurement Requiring companies to provide health care compensation and “benefits” based on “committed” driving time, in addition to other benefits, including safety training and “sexual harassment training.”
He was The most expensive A ballot issue in California history, common carriers contributed more than $181 million to the Yes campaign. comp It said They moved aggressively to urge their drivers to support the initiative, which received 58.6% of the vote.
A group of shared auto drivers sought to overturn Proposition 22, and won a lower court decision. But in a 63-page opinion released Monday, California judges from the First District Court of Appeals disagreed with that court, and upheld the motion.
The opinion stated, “Proposition 22 does not intrude on the legislature’s workers’ compensation authority nor violate the one-subject rule.”
“Today’s ruling is a victory for App Workers and the millions of Californians who voted for Proposition 22. And across the state, drivers and couriers said they are pleased with Prop 22, which offers them new benefits while maintaining the app’s unique flexibility,” said Tony West, chief legal officer at Proposition 22. Uber’s “business-based” statement.
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