California judge orders Uber, Lyft to reclassify drivers as employees

Uber and Lyft must reclassify their California drivers as employees under a preliminary injunction granted Monday by a San Francisco judge.

Why it matters: The ride-hailing companies, along with other gig economy firms, are resisting classifying their drivers as employees, which labor advocates say would give the workers greater benefits and rights. A new California law codified stricter requirements before companies can classify workers as contractors.

• The companies are also behind a California ballot measure that would keep drivers as contractors and provide them with some benefits.
• The new ruling, which comes in response to a request from California's attorney general, gives the companies 10 days to appeal the decision before it goes into effect. They hope to use that appeal to get a longer stay on the ruling.

From Uber:

"The court’s ruling is stayed for a minimum of 10 days, and we plan to file an immediate emergency appeal on behalf of California drivers. The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law. When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression."

From Lyft:

"Drivers do not want to be employees, full stop. We’ll immediately appeal this ruling and continue to fight for their independence. Ultimately, we believe this issue will be decided by California voters and that they will side with drivers."