Beautiful Virgin Islands

Wednesday, Sep 03, 2025

Uber and Lyft must reclassify drivers as employees, appeals court finds

Uber and Lyft must reclassify drivers as employees, appeals court finds

In a blow to Uber and Lyft, a California appeals court said Thursday that the companies must reclassify their drivers as employees rather than independent contractors, affirming an earlier court decision.
The ruling marks a significant development in a months-long legal fight between the companies and the state of California, which in May sued Uber and Lyft and claimed they were in violation of state law. It also puts greater pressure on the companies to successfully pass their California ballot measure which seeks to exempt them from the law.

The state has argued that by classifying their drivers as contractors, Uber and Lyft deprive those workers of benefits they are entitled to under a law that took effect January 1. The law, known as Assembly Bill 5, or AB-5, says companies can only treat their workers as independent contractors if those people are free from company control and perform work outside the company's core business.

A reclassification of their workers would represent a radical shift forced on the two businesses, which have built up massive fleets of drivers by treating them as independent contractors and not providing them benefits that they would be entitled to as employees, such as minimum wage, overtime, paid sick leave and unemployment insurance.

In August, a California court ordered Uber and Lyft to reclassify their drivers in the state as employees, delivering a win to the state. At the time, both companies had threatened to shut down if they were forced to reclassify their workers.

The ruling prompted the companies to appeal. But Associate Justice Jon Streeter of the appellate court wrote in his decision Thursday that the injunction restraining Uber and Lyft from classifying their drivers as independent contractors was valid.

"It is broad in scope, no doubt, but so too is the scale of the alleged violations," he wrote.

"Uber and Lyft have used their muscle and clout to resist treating their drivers as workers entitled to those paycheck and benefit protections," Attorney General Xavier Becerra said in a statement after the ruling. "It's time for Uber and Lyft to play by the rules."

The change won't happen immediately. Uber and Lyft still have 30 days to comply with California's law once the appeals process finishes. That clock typically starts 61 days after the appellate court transfers jurisdiction back to the trial court, assuming the opinion is not challenged. It is unclear if Uber and Lyft would appeal Thursday's ruling to the California Supreme Court, though Uber said in a statement to CNN Business that "we're considering our appeal options."

November's election might also make that court process moot. Uber (UBER) and Lyft (LYFT) — along with delivery services that use drivers such as DoorDash, Instacart, and Uber-owned Postmates — have poured $188 million into a California ballot initiative known as Proposition 22 that aims to side-step the AB-5 law.

If Prop. 22 passes, ride-hail and delivery drivers would continue to be treated as independent contractors. There would be some concessions on benefits, including a minimum earnings guarantee based on "engaged time" when a driver is fulfilling a ride or delivery request, but not the time they spend waiting for a gig.

"This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22," Lyft spokesperson Julie Wood said in a statement to CNN Business on Thursday.

Uber also pivoted to the vote on Prop 22 in its statement, saying that if the measure is not passed, "rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state."

Last month, the CEOs of both companies told the California appeals court that they planned to comply with the law if the lower court's injunction was upheld, and if Prop. 22 fails.

But compliance "would at a minimum require fundamental changes to Uber's platform," wrote Uber CEO Dara Khosrowshahi. He said that the change would "dramatically restrict" the number of drivers Uber could hire, among other moves.

Lyft CEO Logan Green wrote that "such implementation may include ceasing rideshare operations in all or some parts of California."
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Nvidia Reveals: Two Mystery Customers Account for About 40% of Revenue
Woody Allen: "I Would Be Happy to Direct Trump Again in a Film"
Pickles are the latest craze among Generation Z in the United States.
Deadline Day Delivers Record £125m Isak Move and Donnarumma to City
Nestlé Removes CEO Laurent Freixe Following Undisclosed Relationship with Subordinate
Giuliani Seriously Injured in Accident – Trump to Award Him the Presidential Medal of Freedom
EU is getting aggressive: Four AfD Candidates Die Unexpectedly Ahead of North Rhine-Westphalia Local Elections
Lula and Putin Hold Strategic BRICS Discussions Ahead of Trump–Putin Summit
WhatsApp is rolling out a feature that looks a lot like Telegram.
Investigations Reveal Rise in ‘Sex-for-Rent’ Listings Across Canada Exploiting Vulnerable Tenants
Chinese and Indian Leaders Pursue Amity Amid Global Shifts
European Union Plans for Ukraine Deployment
ECB Warns Against Inflation Complacency
Concerns Over North Cyprus Casino Development
Shipping Companies Look Beyond Chinese Finance
Rural Exodus Fueling European Wildfires
China Hosts Major Security Meeting
Chinese Police Successfully Recover Family's Savings from Livestream Purchases
Germany Marks a Decade Since Migrant Wave with Divisions, Success Stories, and Political Shifts
Liverpool Defeat Arsenal 1–0 with Szoboszlai Free-Kick to Stay Top of Premier League
Prince Harry and King Charles to Meet in First Reunion After 20 Months
Chinese Stock Market Rally Fueled by Domestic Investors
Israeli Airstrike in Yemen Kills Houthi Prime Minister
Ukrainian Nationalist Politician Andriy Parubiy Assassinated in Lviv
Corporate America Cuts Middle Management as Bosses Take On Triple the Workload
Parents Sue OpenAI After Teen’s Death, Alleging ChatGPT Encouraged Suicide
Amazon Faces Lawsuit Over 'Buy' Label on Digital Streaming Content
Federal Reserve Independence Questioned Amid Trump’s Push to Reshape Central Bank
British Politics Faces Tumultuous Autumn After Summer of Rebellions and Rising Farage Momentum
US Appeals Court Rules Against Most Trump-Era Tariffs
UK Sought Broad Access to Apple Users’ Data, Court Filing Reveals
UK Bank Shares Dive Over Potential Tax on Sector
Germany’s Auto Industry Sheds 51,500 Jobs in First Half of 2025 Amid Deepening Crisis
Bruce Willis Relocated Due to Advanced Dementia
×