A California appeals court ruled that Uber and Lyft must classify their drivers as employees instead of contractors. The ruling requires Uber and Lyft to comply with Assembly Bill 5 (AB5), a California law that reclassified a wide range of contract workers (including ridesharing drivers) as employees. The new classification would significantly increase employee-related costs, and both Uber and Lyft previously suggested that they may cease operations in California if forced to comply.
Extra: The ruling could potentially be negated by Proposition 22, which, if passed in November, would grant app-based transportation and delivery companies a special exemption from AB5 and allow them to maintain their worker classifications.
