California Appeals Court Delivers Victory for Uber and Lyft, Allowing Independent Contractor Status for Drivers

Proposition 22 exempted ride-share companies from certain labor laws, court rules in favor of the companies

By Sam Catanzaro

​​A California appeals court has ruled that ride-sharing apps like Uber and Lyft can continue to classify their drivers as independent contractors, overturning a lower-court decision that had barred them from doing so. 

The decision came March 13 after a group of ride-share drivers sought to strike down Proposition 22, which had been approved by California voters in November 2020. Proposition 22 created a set of criteria to determine whether ride-share drivers were employees or independent contractors. In practice, it exempted companies like Uber and Lyft from following certain minimum wage, overtime, or workers’ compensation laws for hundreds of thousands of Californian ride-share drivers. Instead, the ballot measure required companies to provide compensation and healthcare “subsidies” based on “engaged” driving time, as well as other benefits, including safety and sexual harassment training.

The ruling was seen as a victory for ride-sharing and delivery companies, with shares of Uber, Lyft, and Doordash. The companies had contributed over $181 million to the “Yes” campaign for Proposition 22, which passed with 58.6% of the votes in support. A California judge had ruled the proposition unconstitutional in 2021, arguing that it infringed the legislature’s power to set standards at the workplace. The state and a group representing the companies and other parties appealed that decision, and Monday’s ruling came down in their favor.

Lyft issued a statement expressing its pleasure at the decision, saying, “We are pleased that the court upheld the democratic will of the voters and the fundamentals of Prop 22. Prop 22 protects the independence drivers value and gives them new, historic benefits.” 

Uber chief legal officer Tony West also released a statement saying, “Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22. Across the state, drivers and couriers have said they are happy with Prop 22, which affords them new benefits while preserving the unique flexibility of app-based work.”

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