A California judge ruled that Uber and Lyft must classify their drivers as employees in a stunning preliminary injunction issued Monday afternoon.
The injunction is stayed for 10 days, however, giving Uber and Lyft an opportunity to appeal the decision. Uber said it planned to file an immediate emergency appeal to block the ruling from going into effect.
Uber and Lyft are under increasing pressure to fundamentally alter their business models in California, the state where both companies were founded and ultimately prospered. At issue is the classification of ride-hailing drivers as independent contractors. Uber and Lyft say drivers prefer the flexibility of working as freelancers, while labor unions and elected officials contend this deprives them of traditional benefits like health insurance and workers’ compensation.
“It’s this simple,” California Superior Court Judge Ethan Schulman wrote in his ruling, “Defendants’ drivers do not perform work that is ‘outside the usual course’ of their business. Defendants’ insistence that their businesses are ‘multi-sided platforms’ rather than transportation companies is flatly inconsistent with the statutory provisions that govern their businesses as transportation network companies, which are defined as companies that ‘engage in the transportation of persons by motor vehicle for compensation.’”
He added, “It also flies in the face of economic reality and common sense… To state the obvious, drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business.”
Read More at The Verge
Read the rest at The Verge