California Supreme Court Rules in Favor of Ride-Hailing Companies

SACRAMENTO, Calif. — In a landmark decision, the California Supreme Court ruled unanimously 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 ruling marks a significant victory for tech companies and concludes a protracted legal dispute between labor unions advocating for driver rights and the tech industry over the classification of gig workers. The court's decision upholds a voter-approved law from 2020, which established that drivers for these services are independent contractors and therefore not entitled to benefits such as overtime pay, paid sick leave, or unemployment insurance. The ruling comes after a lower court had previously deemed the law illegal, but an appeals court later reversed that decision, allowing the current ruling to stand. Uber hailed the Supreme Court's decision as a triumph for drivers, emphasizing that it preserves their flexibility to choose their working hours. The company stated that the ruling 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 campaigned for enhanced rights and protections for gig workers. Critics, including Nicole Moore of Rideshare Drivers United, argue that the decision undermines California's commitment to worker rights, highlighting the ongoing tension between labor interests and the gig economy's operational model.