SAN FRANCISCO – A California judge on Monday issued an order requiring ride-sharing companies Uber and Lyft to classify their drivers as employees, which could skyrocket the personnel costs of these two firms and cast doubt on their business model.
The decision of Magistrate Ethan Schulman of the Superior Court of San Francisco responds to a lawsuit filed by the Government of California and, therefore, is limited exclusively to that state, the most populous in the United States and where both companies have their headquarters and one of its biggest markets.
Classifying their drivers as salaried employees rather than contractors (their current status) would mean for Uber and Lyft, among other things, having to contract them, pay them a fixed salary and offer them benefits such as health insurance, vacation and sick days. .
In his ruling, the judge declared a 10-day moratorium starting this Monday until the order enters into force, to give companies enough time to appeal the decision if they deem it appropriate.
At the end of June, the California Attorney General’s Office, the Democrat Xavier Becerra, and the public defenders of the cities of Los Angeles, San Diego and San Francisco asked the Court to order the reclassification of Uber and Lyft drivers ” immediately “.
“It’s time for Uber and Lyft to live up to their responsibilities and the people who enable them to be successful: their workers. Classifying them as contractors means that you want your workers or taxpayers to pay your obligations. as an employer, “Becerra said on that occasion.
In Nevada, about 300,000 people have applied for unemployment benefits in the last month, a record high.
Since last January 1, it is mandatory by law in California that companies of the so-called collaborative economy such as Uber, Lyft or the delivery firm DoorDash formally hire those who offer services through them, instead of assigning them the status of independent contractors .
Uber, Lyft and DoorDash announced at the end of last year that they would dedicate up to $ 90 million between the three to promote that the final decision on this law rests with California voters through a referendum in November, coinciding with the presidential election in the United States.
It is estimated that around 1 million people work as independent contractors in the sharing economy sector in California.