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Illustration: Lazaro Gamio/Axios

A California appeals court Thursday said Uber and Lyft have to reclassify their drivers in the state as employees, affirming a lower court's ruling.

Why it matters: The companies are fighting a new state law, at the center of this lawsuit, that imposes stricter requirements in order to classify workers as independent contractors.

Flashback: In May, California's attorney general, along with city attorneys for San Francisco, Los Angeles and San Diego, sued Uber and Lyft over the companies' classification of drivers are independent contractors instead of employees.

  • California's new law, known as AB5, went into effect in January. It codifies a state supreme court decision from 2018.

What they're saying:

  • From Uber: "Today’s ruling means that if the voters don’t say Yes on Proposition 22, rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state. We’re considering our appeal options, but the stakes couldn’t be higher for drivers—72% of whom support Prop 22—and for the California economy, where millions of people are jobless and another 158,000 just sought unemployment support this week."
  • From Lyft: "“This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22.”

The other side: "Californians have fought long and hard for paycheck and benefit protections," said California attorney general Xavier Becerra in a statement. "Uber and Lyft have used their muscle and clout to resist treating their drivers as workers entitled to those paycheck and benefit protections.”

What's next: The injunction, forcing the reclassification, will go into effect 30 days after the issuance of the remittitur (the official handing back of jurisdiction to the lower court). This is not expected to happen before November's election.

Editor's note: The story has been updated with statements from the companies and additional information.

Go deeper

Ben Geman, author of Generate
Jul 2, 2020 - Energy & Environment

Why going electric makes sense for ride-hailing

Illustration: Sarah Grillo/Axios

Deploying electric vehicles instead of gasoline-powered models for services like Uber and Lyft provides outsized climate benefits compared to emissions cuts from electric vehicles for only personal use, per a peer-reviewed study in Nature Energy.

Why it matters: The analysis, based on California data, follows explosive growth in ride-hailing in recent years — and evidence that it's cannibalizing more climate-friendly mass transit.

Biden's pick to lead major banking regulator drops out

Saule Omarova, nominee for Comptroller of the Currency, at a confirmation hearing on Nov. 18. Photo: Anna Moneymaker/Getty Images

President Biden's pick to head one of the country's most powerful banking regulators is dropping out of consideration for the post, according to a statement from Biden that accepted the withdrawal.

Why it matters: Saule Omarova, nominated to lead the Office of the Comptroller of the Currency, faced a tough path to confirmation — with opposition from Republicans and moderate Democrats.

Judge temporarily blocks Biden vaccine mandate for federal contractors

President Biden delivers remarks at the White House on Dec. 6 in Washington, D.C. Photo: Chip Somodevilla via Getty Images

A federal judge on Tuesday temporarily blocked President Biden's vaccine mandate for federal contractors nationwide.

Why it matters: It's the latest setback in the Biden administration's rollout of COVID vaccine requirements. Federal judges in two states temporarily barred the administration from enforcing mandates for millions of workers last week.