Aug. 11 (UPI) — A California court on Monday ordered Uber and Lyft to reclassify their drivers in the state as employees.
San Francisco Superior Court Judge Ethan Schulman ordered the ride-sharing companies, which currently treat their drivers as independent contractors, to grant them the status of employees in the state, citing decreased usage of the services amid the COVID-19 pandemic as an opportunity to restructure their workforces.
“Now, when Defendant’s ridership is at an all-time low, may be the best time (or the least worst time) for Defendants to change their business practices to conform to California law without causing widespread adverse effects on their drivers,” the ruling stated.
Schulman added that drivers for the companies do not perform work that is “outside the usual course” of their business.
“Defendants’ insistence that their businesses are ‘multi-sided platforms’ rather than transportation companies is flatly inconsistent with the statutory provisions that govern their businesses as transportation network companies,” Schulman wrote.
California Attorney General Xavier Becerra and the attorneys general of three major cities filed a lawsuit against the companies in May, calling on them to reclassify workers, saying classifying workers as contractors evades obligations to provide workers with minimum wage, overtime, payroll taxes and workers’ compensation insurance.
“Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities,” Becerra told The Hill on Monday. “We’re going to keep working to make sure Uber and Lyft play by the rules.”
Uber CEO Dara Khosrowshahi published an op-ed in The New York Times on Monday calling on states to pass legislation requiring Uber and other gig economy companies to establish benefits funds to provide workers money for benefits, including insurance or paid time off.
“Uber is ready, right now, to pay more to give drivers new benefits and protections,” Khosrowshahi wrote. “But America needs to change the status quo to protect all workers, not just one type of work.”
Lyft representative Julie Wood said that “drivers do not want to be employees, full stop” in a statement to CNN, declaring the company would appeal the ruling.
“Ultimately we believe this issue will be decided by California voters and that they will side with drivers,” Wood said.