Ride-Share and Delivery Drivers Are Independent Contractors, Says Court
California court upholds Proposition 22. A Monday ruling from a state appeals court in California is good news for delivery and ride-share drivers, as well as a win for free markets and direct democracy. The court upheld a ballot initiative passed by California voters in 2020, securing the status of delivery and ride-share drivers as contractors, not employees.
Back in 2019, California passed Assembly Bill (AB) 5, which defined many independent contractors—from gig workers like Uber and Lyft drivers to freelance writers to business consultants and more—as employees. As such, workers would be entitled to employee benefits and protections but risk losing a lot of flexibility and independence. And because many businesses can’t afford to treat all contractors as employees, laws like California’s AB5 can (and have) put some independent contractors entirely out of work.
Some gig workers and companies pushed back, arguing that ride-share and delivery drivers should be exempt from AB5’s requirements. And California voters agreed, passing a resolution to this effect—Proposition 22—in 2020.
But a small group of drivers and the Service Employees International Union challenged the ballot initiative, arguing that it was unconstitutional. And a lower court agreed, ruling in 2021 that Proposition 22 violated California’s constitution by interfering with state lawmakers’ ability to make rules related to worker compensation, among other flaws.
Now, California’s court has largely reversed the lower court’s decision.
“Proposition 22 does not intrude on the Legislature’s workers’ compensation authority,” the appeals court held in a Monday ruling.
“Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop. 22,” Tony West, chief legal officer for Uber, said in a statement. “Across the state, drivers and couriers have said they are happy with Prop. 22, which affords them new benefits while preserving the unique flexibility of app-based work. We’re pleased that the Court respected the will of the people, and that Prop. 22 will remain in force.”
The appeals court did find some parts of Proposition 22 (related to future legislative amendments) to be unconstitutional. But “because the unconstitutional provisions can be severed from the rest of the initiative,” it affirmed only the part of the lower court’s ruling related to this and reversed the rest of its decision.
You can find the full appeals court ruling here. Bottom line: Companies like Uber, Lyft, and DoorDash can continue to define drivers and delivery people in California as independent contractors.
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