The ruling, late Thursday, upheld a lower court order that companies comply with Assembly Bill 5 and provide drivers with health and other work benefits that typically come with full-time employment status.While the assembly bill went into effect on January 5, Uber and Lyft have not complied, arguing that they are technology platforms and not transportation businesses.
In August, a San Francisco Superior Court judge ordered the companies to appoint their own drivers. Uber and Lyft officials appealed the ruling, arguing that the injunction was “radical” or “unprecedented”, and they could not meet that deadline.
In their ruling against that appeal, the three-judge panel stated that the injunction was issued properly “in accordance with the standing principles of equity.”
The judges said, “It is broad in scope, no doubt, but the same is the scale of the alleged violation.”
The ruling comes two weeks before an election, with ride-hailing companies banking on California voters to approve a ballot measure that would partially exempt them from labor legislation.
Proposition 22, which is scheduled for one vote. November 3 exempts Uber and Lyft from giving full benefits that employees currently receive under California law, such as unemployment insurance and workers compensation, while guaranteeing payment for drivers’ time on trips, health Is required. Care contribution and medical and disability coverage.
Uber and Lyft have long argued that their freelance model allows drivers to drive only when they want to. But critics have said that it places an unfair financial burden on drivers and gives Uber and Lyft an unfair advantage over businesses that follow employment laws.
Both companies have said they may be required to leave California if Proposition 22 does not pass, although both companies have also explored other options, including licensing their brand to vehicle fleet operators.
Uber shares were down 1.23% at $ 36.25 in premarket trading on Friday, while Lyft shares were down 1.08% to $ 25.30.