The Future of Uber and Lyft
- August 24, 2020
In a ruling stemming from a lawsuit brought by the city attorneys of San Diego and two other cities and the state, a California appeals court extended the length of time Uber and Lyft will have to comply with an order requiring them to reclassify rideshare drivers as employees. If this temporary injunction expires as is, both rideshare services will see a significant operational change to their businesses. Under this order, drivers will be considered employees and thus subjected to a rigid schedule, payroll taxes, and employee benefits. This ruling applies AB 5, a three-factor test to classify whether someone is an employee or an independent contractor. Both companies have threatened to pull out of California as a result of this ruling, and California voters will likely be deciding this issue on the November ballot (Proposition 22) – we are closely monitoring this developing story. For more information, check out this article by the National Law Review to familiarize yourself with this issue.