London Daily

Focus on the big picture.
Monday, Aug 25, 2025

Uber and Lyft must reclassify drivers as employees, appeals court finds

Uber and Lyft must reclassify drivers as employees, appeals court finds

In a blow to Uber and Lyft, a California appeals court said Thursday that the companies must reclassify their drivers as employees rather than independent contractors, affirming an earlier court decision.
The ruling marks a significant development in a months-long legal fight between the companies and the state of California, which in May sued Uber and Lyft and claimed they were in violation of state law. It also puts greater pressure on the companies to successfully pass their California ballot measure which seeks to exempt them from the law.

The state has argued that by classifying their drivers as contractors, Uber and Lyft deprive those workers of benefits they are entitled to under a law that took effect January 1. The law, known as Assembly Bill 5, or AB-5, says companies can only treat their workers as independent contractors if those people are free from company control and perform work outside the company's core business.

A reclassification of their workers would represent a radical shift forced on the two businesses, which have built up massive fleets of drivers by treating them as independent contractors and not providing them benefits that they would be entitled to as employees, such as minimum wage, overtime, paid sick leave and unemployment insurance.

In August, a California court ordered Uber and Lyft to reclassify their drivers in the state as employees, delivering a win to the state. At the time, both companies had threatened to shut down if they were forced to reclassify their workers.

The ruling prompted the companies to appeal. But Associate Justice Jon Streeter of the appellate court wrote in his decision Thursday that the injunction restraining Uber and Lyft from classifying their drivers as independent contractors was valid.

"It is broad in scope, no doubt, but so too is the scale of the alleged violations," he wrote.

"Uber and Lyft have used their muscle and clout to resist treating their drivers as workers entitled to those paycheck and benefit protections," Attorney General Xavier Becerra said in a statement after the ruling. "It's time for Uber and Lyft to play by the rules."

The change won't happen immediately. Uber and Lyft still have 30 days to comply with California's law once the appeals process finishes. That clock typically starts 61 days after the appellate court transfers jurisdiction back to the trial court, assuming the opinion is not challenged. It is unclear if Uber and Lyft would appeal Thursday's ruling to the California Supreme Court, though Uber said in a statement to CNN Business that "we're considering our appeal options."

November's election might also make that court process moot. Uber (UBER) and Lyft (LYFT) — along with delivery services that use drivers such as DoorDash, Instacart, and Uber-owned Postmates — have poured $188 million into a California ballot initiative known as Proposition 22 that aims to side-step the AB-5 law.

If Prop. 22 passes, ride-hail and delivery drivers would continue to be treated as independent contractors. There would be some concessions on benefits, including a minimum earnings guarantee based on "engaged time" when a driver is fulfilling a ride or delivery request, but not the time they spend waiting for a gig.

"This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22," Lyft spokesperson Julie Wood said in a statement to CNN Business on Thursday.

Uber also pivoted to the vote on Prop 22 in its statement, saying that if the measure is not passed, "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."

Last month, the CEOs of both companies told the California appeals court that they planned to comply with the law if the lower court's injunction was upheld, and if Prop. 22 fails.

But compliance "would at a minimum require fundamental changes to Uber's platform," wrote Uber CEO Dara Khosrowshahi. He said that the change would "dramatically restrict" the number of drivers Uber could hire, among other moves.

Lyft CEO Logan Green wrote that "such implementation may include ceasing rideshare operations in all or some parts of California."
Newsletter

Related Articles

0:00
0:00
Close
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
A new faith called Robotheism claims artificial intelligence isn’t just smart but actually God itself
Deputy Prime Minister Angela Rayner Purchases Third Property Amid Housing Tax Reforms Debate
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Italian Facebook Group Sharing Intimate Images Without Consent Shut Down Amid Police Investigation
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
Sam Nicoresti becomes first transgender comedian to win Edinburgh Comedy Award
Builders uncover historic human remains in Lancashire house renovation
Australia Wants to Tax Your Empty Bedrooms
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
FBI Investigates John Bolton Over Classified Documents in High-Profile Raids
Report reveals OpenAI pitched national ChatGPT Plus subscription to UK ministers
Labour set to freeze income tax thresholds in long-term 'stealth' tax raid
Coca‑Cola explores sale of Costa coffee chain
Trial hears dog walker was chased and fatally stabbed by trio
Restaurateur resigns from government hospitality council over tax criticism
Spanish City funfair shut after serious ride injury
Suspected arson at Ilford restaurant leaves three in critical condition
Tottenham beat Manchester City to go top of Premier League
Bank holiday heatwave to hit 30°C before remnants of Hurricane Erin arrive
UK to deploy immigration advisers to West Africa to block fake visas
Nurse who raped woman continued working for a year despite police alert
Drought forces closures of England’s canal routes, canceling boat holidays
Sweet tooth scents: food-inspired perfumes surge as weight-loss drugs suppress appetites
Experts warn Britain dangerously reliant on imported food
Family of Notting Hill Carnival murder victim call event unmanageable
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
×