A federal appeals court in California has ruled to reject Uber’s challenge to a state law that aims to make gig transportation workers employees rather than independent contractors, dealing a major defeat for the tech company as it struggles to contain costs.
California’s AB5 was passed in 2019 with the goal of making app-based workers at companies like Uber, Lyft, and Postmates full-time employees with minimum wage, workplace protections, and other benefits. The law was quickly challenged by Uber and, after years of deliberation, was struck down by an appeals court.
Monday’s ruling An 11-judge panel of the 9th Circuit Court of Appeals overturned the first court’s ruling, finding that the law did not illegally single out gig workers in the transportation industry, but merely changed regulations for all independent contractors.
The California Legislature “recognized transportation and distribution companies as the most significant perpetrators of the problem it was trying to solve – worker misclassification,” Circuit Judge Jacqueline Nguyen wrote in her ruling.
Companies like Uber have strongly resisted attempts to require them to be considered employees because workers cost significantly more than contractors. Massachusetts Ballot Measures It’s also being challenged in court.
Statewide ballot measure in California 2020 Prop 22 Companies like Uber could classify workers as contractors. The measure is also being challenged in court, with unions arguing last week that it unfairly blocks future legislation.
An Uber spokesperson told The Hill that Proposition 22’s decision doesn’t directly affect the company’s relationship with its drivers.
