In This Story
Uber, Lyft, and other app-based companies scored a major win on Thursday after California’s Supreme Court upheld a ruling that classifies gig workers as independent contractors rather than employees.
The decision ended a yearslong legal battle between contract workers and the apps that employ them, including the question of whether app employees at these companies are entitled to typical benefits like paid sick leave, unemployment insurance, and overtime pay.
State voters first voted in favor of the ballot measure, Proposition 22, in 2020. Uber, Lyft, and DoorDash reportedly spent more than $200 million to keep the law in place, in an effort to hold onto their current business models, which would have been completely upended had the law not been upheld.
Uber called the law “a testament to what can be done when we listen to drivers and couriers” in a statement Thursday. It said it has delivered more than $1 billion in direct benefits to date since Prop 22 went into effect.
“With growing frequency, policymakers are shifting away from outdated discussions, based on a binary choice between employment with benefits, or independence with none,” the ride-sharing company said.
Gig workers groups have vehemently opposed the measure, arguing that it stripped contract employees of their basic labor rights. In a statement posted on X, community group Gig Workers Rising said the law, which had promised to usher in new benefits for gig workers, has actually done the opposite.
“Voters were told the initiative would provide us ‘historic new benefits’ and guaranteed earnings,” the group wrote. “But since it went into effect, drivers have seen our pay go down, learned the benefits are a sham, and have to accept unsafe rides because of the constant threat of being ‘deactivated,’ kicked off the app with little explanation or warning.”
Advocacy group PowerSwitch Action said, however, that the ruling leaves the door open for drivers to use their power in lower courts to bring about changes to the industry.
“Ultimately, it’s the drivers who make Uber’s profits possible, and that means they have the power to win better pay, safer working conditions, and respect from Uber,” the group said on X.