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Court Orders Uber, Lyft to Reclassify Drivers As Employees in California

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Court Orders Uber, Lyft to Reclassify Drivers As Employees in California


Uber and Lyft were ordered by a California court on Monday to reclassify their drivers in the state as employees, marking the latest escalation in an ongoing legal battle over a new law impacting much of the on-demand economy.


The companies will have 10 days before the order takes effect to allow for an appeal, according to a copy of the ruling from San Francisco Superior Court judge Ethan Schulman. Uber and Lyft currently treat their drivers as independent contractors.


The mounting legal pressure to reclassify their workers in the state comes at an uncertain time for both companies. Uber (UBER) and Lyft (LYFT) continue to grapple with the pandemic, which significantly cut demand for their core ride-hailing businesses. Both companies have undergone layoffs and have long histories of steep losses.


According to the court ruling, "now, when Defendant's ridership is at an all-time low, may be the best time (or the least worst time) for Defendants to change their business practices to conform to California law without causing widespread adverse effects on their drivers."

In response to the order, Lyft spokesperson Julie Wood said, "drivers do not want to be employees, full stop."


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