The California Supreme Court has ruled that drivers for ride-sharing and delivery companies are independent contractors, not employees.
According to multiple media outlets, the Supreme Court dismissed a lawsuit challenging the constitutionality of Proposition 22, which recognizes these drivers as independent contractors. The lawsuit was filed by the Service Employees International Union (SEIU) and four drivers.
As a result, drivers for companies such as Uber, Lyft, and DoorDash will retain their independent contractor status. For companies, this classification can save up to 30% in costs.
At issue in the lawsuit was whether drivers would receive the benefits of being treated as employees.
Employees receive benefits such as minimum wage, overtime pay, healthcare, and workers’ compensation. Independent contractors are excluded from such benefits but are allowed flexibility in working hours.
The ruling is considered a victory for ride-sharing companies. They had argued that treating thousands of drivers as employees would force them to shut down or limit their operations in California.
“This ruling upholds the will of the 10 million people in the state who voted to provide drivers with record benefits and protections while allowing them to maintain their independence,” Uber said in a statement.
“Shared service company drivers will continue to unionize and fight for their rights,” said Tia Orr of SEIU California. “Workers are committed to ensuring fairness in the gig economy.”
BY JAESUN SUH, HOONSIK WOO [suh.jaesun@koreadaily.com]
