- A California appeals court heard arguments on Tuesday from Uber and Lyft as they appeal a recent ruling that would force the companies to reclassify drivers as employees.
- A lower court determined in August that Uber and Lyft drivers are employees, not contractors, under the state’s gig work law, AB-5, but delayed enforcing the ruling while the companies appeal it.
- Uber, Lyft, and other gig companies have fought AB-5 aggressively, pouring more than $180 million into a ballot measure aimed at California voters that would permanently exempt them from the law.
- The companies argue reclassifying drivers as employees will reduce their flexibility, while proponents of AB-5 say Uber and Lyft’s business models rely on underpaying drivers and skirting labor laws.
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A California appeals court heard oral arguments Tuesday from Uber, Lyft, and the state over whether a lower court reached the right conclusion in August when it ruled that the companies’ drivers are employees under the state’s gig work law, AB-5.
Judges from California’s first district Court of Appeal pressed lawyers for Uber and Lyft over drivers’ wages and autonomy, and questioned the companies’ arguments that AB-5 would require them to reduce drivers’ flexibility, according to The Washington Post and The New York Times reporter Kate Conger.
The judges also asked a lawyer for the state about potential harms to Uber and Lyft and drivers’ preferences around their employment status, according to reports.
The landmark case could fundamentally alter the contractor-based business model that Uber and Lyft have relied on, and the companies are aggressively fighting the law in court and via a ballot measure that California voters will decide on in