California court ruling allows Uber, Lyft to classify drivers as independent contractors

Ride-sharing apps like Uber and Lyft can continue classifying their drivers as independent contractors, thanks to a Monday ruling from a California appeals court that reversed a lower-court decision barring them from the practice. 

The ruling comes after California voters in November 2020 approved Proposition 22, which OK’d drivers for ride-sharping and delivery apps to be classified as independent contractors.

Signage outside the Uber Technologies headquarters in San Francisco, California, U.S., on Tuesday, Feb. 8, 2022.  (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)

In 2021, a California judge ruled the proposition unconstitutional, arguing that it infringed on the legislature’s power to set workplace standards. 

The state and the “Protect App-Based Drivers & Services” (PADS) coalition appealed that decision. Monday’s ruling comes down in their favor. 

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“We are pleased that the court upheld the democratic will of the voters and the fundamentals of Prop 22,” a spokesperson for Lyft said. “Prop 22 protects the independence drivers’ value and gives them new, historic benefits.” 

Uber driver Karim Amrani sits in his car parked near the San Francisco International Airport parking area in San Francisco. (AP Photo/Jeff Chiu, File / AP Newsroom)

“After Prop 22 went into effect, more than 88% of California drivers surveyed said that it has been good for them. We are excited to continue operating our service with no changes.” 

Uber called Monday’s ruling “a victory for app-based workers and the millions of Californians who voted for Prop 22.” 

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“Across the state, drivers and couriers have said they are happy with Prop 22, which affords them new benefits while preserving the unique flexibility of app-based work,” Uber’s Chief Legal Officer, Tony West, said in a statement. “We’re pleased the Court respected the will of the people, and that Prop 22 will remain in place, preserving independence for drivers.” 

A Prius with a Lyft sticker.  (David Paul Morris/Bloomberg / Getty Images)

The PADS coalition called the ruling a “historic victory for the nearly 1.4 million drivers who rely on the independence and flexibility of app-based work to earn income, and for the integrity of California’s initiative system,” the coalition said. 

“The Appeals Court upheld the fundamental policy behind that measure – to protect the independent contractor status of app-based drivers in California, while providing drivers with new benefits.” 

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The court’s decision was first reported by The Wall Street Journal.