A California appeals court has ruled that Uber and Lyft should clarify their drivers as employees and not independent contractors, according to NPR. Earlier, a lower court had made the same ruling that the ride-hailing companies are likely to be violating the state’s labor law. 

  • Uber and Lyft say that converting drivers to employees means hiring fewer drivers and likely increasing prices.
  • The California law remains on hold for at least 30 days, and both companies may appeal to the California Supreme Court.
  • Uber and Lyft claim that the labor law does not apply to them since they are tech platforms and not transportation businesses. 
  • Uber and Lyft had threatened to leave the state if forced to make drivers their employees but are considering their legal options.
  • Many drivers want to keep the flexible work schedules of being independent contractors, but other drivers want the labor law’s protections.
  • Uber and Lyft consider franchise-like business models in California.

Ride-hailing companies’ stocks are falling. UBER: NYSE is down on premarket 1.44%, LYFT: NASDAQ is down on premarket 1.13%