California Supreme Court Rules in Favor of Ride-Hailing Companies
- The California Supreme Court ruled that Uber and Lyft can continue to classify their drivers as independent contractors.
- This decision means that drivers will not receive the benefits and protections associated with employee status.
- The ruling reflects ongoing debates about gig economy labor rights.
SACRAMENTO, Calif. — In a landmark decision, the California Supreme Court ruled on Thursday that app-based ride-hailing and delivery services, including Uber and Lyft, can classify their drivers as independent contractors rather than employees. This unanimous ruling marks a significant victory for tech companies and concludes a prolonged legal dispute between labor unions and the tech industry regarding the employment status of app-based service workers in California. The court's decision upholds a voter-approved law from 2020, which established that drivers for companies like Uber and Lyft are independent contractors, thereby denying them benefits such as overtime pay, paid sick leave, and unemployment insurance. The ruling comes after a lower court had previously deemed the measure illegal, but an appeals court reversed that decision last year, leading to the Supreme Court's final verdict. Uber hailed the ruling as a triumph for drivers, emphasizing their freedom to choose their working hours. The company stated that the decision solidifies the drivers' preference for an independent contractor model, countering efforts to impose an employment framework that many drivers reportedly do not support. Conversely, the ruling represents a setback for labor unions and advocates who have sought greater protections for drivers. Critics, including Nicole Moore of Rideshare Drivers United, argue that the decision undermines California's commitment to worker rights, particularly following the 2019 legislation aimed at ensuring minimum wage, health insurance, and other benefits for gig workers.