A judge in the San Francisco Superior Court has sided against two massive ride-sharing apps in an employment classification case.
Writing in a Monday ruling, county Judge Ethan Schulman found that drivers for Uber and Lyft should be classified as employees rather than contractors and are owed benefits that other Californians are entitled to, including minimum wage, paid rest periods, compensation for overtime work, and reimbursement for the cost of driving while on the clock.
“Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities,” California Attorney General Xavier Becerra told the Hill. “We’re going to keep working to make sure Uber and Lyft play by the rules.”
The ruling marks a significant shift in the categorization of the two companies, which argued they were technology companies and should not be forced to pay employees the way a transportation company does. Schulman refuted that idea and outlined why the ride-sharing apps should be defined as part of the transportation industry.
“It’s this simple,” Schulman wrote. “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.’”
Both companies are expected to appeal the ruling, which would mandate that they both pay health insurance for employees, among other benefits. A representative from Uber accused the state of California of attempting to make it harder to enter the job market during a time when unemployment has spiked due to the coronavirus pandemic.
“When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression,” the representative said.
