Uber, Lyft hit with bombshell driver ruling as key US vote looms

Proposition 22, which is set for a vote Nov 3, exempts the companies from paying for full benefits that employees currently get under California law, such as unemployment insurance and complete workers compensation, while requiring a pay guarantee for drivers’ time on trips, health care contributions and medical and disability coverage, among others. — AFP

Uber Technologies Inc and Lyft Inc face the gravest threat yet to their business models after an appeals court ruled they must treat their drivers in California as employees instead of independent contractors.

The bombshell decision on Oct 22 comes less than two weeks before an election in which the ride-hailing companies are counting on voters to approve a ballot measure that would partially exempt them from the labour law at issue in the legal fight. If the vote doesn’t go their way, Uber and Lyft are threatening to shut down in their home state.The ruling upheld a lower court’s order that the companies comply with Assembly Bill 5 –which took effect in January – and provide drivers with the costly benefits that employee status confers.