- California’s Public Utilities Commission said in an order Tuesday that Uber and Lyft drivers are “presumed to be employees” under AB-5, the state’s new gig work law.
- The agency, which oversees ride-hailing companies, said they must now comply with existing regulations related to employees.
- The ruling is a significant defeat for Uber and Lyft, which had argued publicly and in lawsuits that their drivers were properly classified as independent contractors.
- Uber, Lyft, and other similar services have come under fire for their treatment of contractors, who don’t receive benefits like healthcare and paid time off that are offered to the companies’ full-time employees.
The California Public Utilities Commission said in an order Tuesday that drivers for Transportation Network Companies (TNCs), which include services like Uber and Lyft, are considered employees under AB-5, the state’s hotly debated new gig work law.
“For now, TNC drivers are presumed to be employees and the Commission must ensure that TNCs comply with those requirements that are applicable to the employees of an entity subject to the Commission’s jurisdiction,” wrote commissioner Genevieve Shiroma.
The ruling from CPUC, the agency in charge of regulating ride-hail companies, marks a significant development in the battle over the employment status of tens of thousands of gig workers in California.
Both companies criticized the ruling, saying it could hurt drivers’ wages and pointing to a ballot measure they support that would revoke the law.