California’s court of appeals has reordered Uber and Lyft to classify their drivers as employees. The order was part of a 74-page opinion affirming a 10th August 2020 injunction requiring the companies to do this within 30 days.

However, for now, the companies will maintain the status quo as the ruling will most likely not go into effect before voters in California vote on a ballot measure, Prop 22, that would exempt Uber, Lyft, and other gig economy companies from the state’s AB5 law.

Also, the injunction will not be effective until 30 days after the appeal ruling. The AB5 law was initially intended to make it more difficult for these companies to classify their workers as independent contractors. Gig economy companies are hoping for a pleasant outcome at the vote. They have collectively spent about $186 million in supporting the ballot measure.

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A lot of public officials and driver groups have celebrated the court ruling. “This is a huge victory for drivers,” anti-Prop 22 group Gig Workers Rising said in a statement. The city attorney of San Francisco also tweeted, “Drivers are employees”.

Uber says it will be exploring their appeal options. Part of the options may include Uber and Lyft appealing to the California Supreme Court. “Today’s ruling means that if the voters don’t say Yes on Prop 22, 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,” an Uber spokesperson added.

A Lyft spokesperson says The ruling makes it “more urgent than ever for voters” to vote yes on Prop. 22. Both companies say most drivers prefer to be independent because of the ability to set their own hours. However, labor unions and government officials say the classification deprives them of traditional work benefits. For example, contractors are not entitled to health insurance and workers’ compensation. The classification also forces the drivers to bear all the costs associated with work.

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