A California court ruled that the drivers of “gig” platforms such as Uber and Lyft are not employees of the company, but rather independent contractors.
With the above, the Uber and Lyft platforms will be able to continue treating their workers as independent contractors within the state of California.
The labor measure, known as Proposition 22, is constitutional, according to the California appeals court.
Previously, labor groups and some workers had opposed the measure, arguing that it took away rights such as sick leave.
The latest ruling overturns a decision made by a lower court in California in 2021.
It determined that Proposition 22 affected the powers of legislators to set standards in the workplace.
Uber and Lyft stop operations due to protest in Orlando
The state of California and a group representing Uber, Lyft and other gig platforms appealed the decision.
After the news was released, the shares of both platforms rose almost 5% in terms of operations.
“Today’s ruling is a victory for app-based workers and for millions of Californians who voted for Proposition 22,” said Tony West, Uber’s chief legal officer.
West added that this seemed like a positive move to the company, arguing that Proposition 22 preserves the independence of drivers.
For its part, Lyft said the proposal “protects the value of independent drivers and provides them with new and historic benefits.”
This is how the gig economy works
In November 2020, California voters approved Proposition 22.
The Proposition determines whether rideshare drivers are employees or independent contractors.
For the companies Uber and Lyft, it meant a victory, since both had invested $205 million in a campaign to support such a measure.
The achievement came with some demands on the companies, such as offering workers some benefits, including health and accident insurance.
Some drivers supported Proposition 22, while labor groups opposed it.
They pointed out all the benefits of being classified as employees, including sick leave, as well as overtime pay.
Meanwhile in NYC
Since yesterday, Uber and Lyft drivers earn more per ride.
This comes after the New York City Taxi and Limousine Commission voted unanimously last week to approve a pay increase.
Shared ride drivers now enjoy a 2.25% increase.
The increase is intended to offset rising costs for drivers as the economy of the USA. continues to deal with high levels of inflation.
TLC Commissioner David Do explained to the press what the salary increase for hired drivers.
“If a driver makes 10 trips a day and gets a $2.26 raise, that’s almost $22.26 a day,” Do said.
“That is coupled with higher fuel costs, higher prices at the grocery store, rents, and everything else that $22 goes toward,” he said.
Drivers from both platforms participated in strikes in front of the headquarters of uber in Manhattan in January and at the airport The guard in February.
These occurred when uber sued the city to prevent wage increases, citing additional costs of $21 to $23 million per month.
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