A federal appeals court in California has ruled that Uber’s challenge to a state law aimed at making transportation workers, rather than independent contractors, unable to advance, dealing the tech company a major defeat as it tries control costs.
California AB5 was passed in 2019, with the goal of making app-based workers — like those at Uber, Lyft and Postmates — full employees with minimum wage, workplace protections and other benefits. The law was immediately challenged by Uber and overturned by an appeals court after years of deliberation.
Monday’s decision of an 11-judge panel of the 9th Circuit Court of Appeals reverses the first appellate ruling, ruling that the law does not illegally isolate transportation service workers, but merely changes regulations for all independent contractors.
The California Legislature “found transportation and delivery companies to be the most significant perpetrators of the problem it sought to address – the misclassification of workers,” Judge Jacqueline Nguyen wrote in the court’s ruling.
Companies like Uber have strongly resisted attempts to require their workers to be considered employees because employees incur significantly higher costs than contractors. A similar Massachusetts ballot measure is also being challenged in court.
In California, statewide ballot measure Prop 22 in 2020 Certain companies like Uber may consider their employees to be contractors. That measure is also being challenged in court, with a union arguing last week that it unfairly hampers future legislation.
An Uber spokesperson told The Hill that the decision will not directly affect its relationship with its drivers because of Proposition 22.
This story originally appeared on thehill.com read the full story
