Courts uphold right of rgig companies to classify workers as independent contractors

In a recent ruling, a California appeals court has granted ride-sharing companies Uber, Lyft, and DoorDash the right to classify their drivers as independent contractors, rather than employees.

This decision upholds the results of Proposition 22, which was passed by California voters in 2020 and exempts ride-sharing firms from a law requiring them to classify their drivers as employees. While the ruling provides clarity on the classification of hundreds of thousands of California ride-share drivers, it is a blow to the unions who had hoped for a different outcome.

The ballot initiative saw ride-share companies pour over $224 million into the campaign, making it the most expensive ballot measure in California history at the time. Prop. 22 granted some benefits to drivers, including a partial health care subsidy under certain conditions, but they still don't have access to other workplace benefits, such as minimum wage, sick leave, unemployment benefits, and more.

Despite this decision, the Service Employees International Union has said that it will "consider all options," which may include seeking a review from the state Supreme Court. This move suggests that the battle between ride-share companies and unions over the classification of drivers is far from over.

This victory for ride-sharing companies is part of a wider trend of private companies using the ballot box to block state laws they disagree with. For example, the bail bond industry overturned a law that would have ended cash bail, and the tobacco industry tried but failed to reverse a law banning certain flavored tobacco products. Source: CalMatters