CALIFORNIA COURT: UBER AND LYFT MUST TREAT DRIVERS AS EMPLOYEES

Whathappened

Uber and Lyft must treat their California drivers as employees, providing them with the benefits and wages they are entitled to understate labor law, a California appeals court ruled Thursday.

The ruling is the result ofa lawsuit brought by the state’s attorney general and the city attorneys of San Francisco, Los Angeles and San Diego. The state and city agencies sued the ride- hailing companies in May to enforce a newstate labor law that aimed tomake gig workers into employees.

Aftera lowercourt ruled Uber and Lyft must immediately comply and hire the drivers, the companies fought back. They threatened to shut down completely in California and appealed the decision, winning a last- minute reprieve from the appellate court while it considered the case.

What it means

The decision points to growing agreement between the state courts and lawmakers that gig workers do not have the independence necessary for them to be considered contractors.

Uber and Lyft have said it would be too expensive to hire all of their drivers, causing catastrophic harm to their businesses. But that does not justify the losses for drivers who went without work place protections, the California 1st District Court of Appeal said.

What’s next

California voters will get to weigh in soon on Proposition 22, a ballot initiative sponsored by gig economy startups to exempt themselves fromthe law.

RICHARD VOGEL/ AP 2016 Uber and Lyft have said it would be too expensive to hire all of their drivers.