Uber and Lyft to continue rideshare operations in California ahead of Proposition 22 vote

By

Ryan Byrne

California residents still have access to Uber and Lyft.

On August 20, the California First District Court of Appeal stayed a superior court judge’s decision, effectively allowing rideshare companies Uber and Lyft to continue operating in the state ahead of a vote on Proposition 22 on November 3. Prop 22 would define app-based drivers as independent contractors rather than classifying them as employees.

Here’s a timeline of how we got here:

  • December 3, 2018: AB 5, which would codify a three-factor test to decide a worker’s status as an independent contractor, was introduced in the California legislature.
  • August 30, 2019: DoorDash, Lyft, and Uber each contributed $30 million into campaign accounts to fund a ballot initiative campaign should the legislature pass AB 5 without compromising with the companies.
  • September 18, 2019: Gov. Gavin Newsom (D) signed AB 5 without an exemption for app-based drivers and employers.
  • October 29, 2019: DoorDash, Lyft, and Uber filed the ballot initiative, which became known as Proposition 22.
    • The ballot measure, which was certified on May 22, 2020, would override AB 5 for app-based drivers. Prop 22 would also enact labor and wage policies that are specific to app-based drivers and companies.
  • January 1, 2020: AB 5 went into effect.
    • Uber and Lyft did not change how their workers are classified. Tony West, the chief legal officer for Uber, said, “Because we continue to believe drivers are properly classified as independent, and because we’ll continue to be responsive to what the vast majority of drivers tell us they want most—flexibility—drivers will not be automatically reclassified as employees. … We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now.”
  • May 5, 2020: California Attorney General Xavier Becerra, Los Angeles City Attorney Mike Feuer, San Diego City Attorney Mara Elliott, and San Francisco City Attorney Dennis Herrera sued Uber and Lyft, alleging the firms were in violation of AB 5 for considering their workers to be independent contractors.
  • August 10, 2020: Superior Court Judge Ethan Schulman granted an injunction in favor of Becerra and the city attorneys.
    • Schulman wrote, “Defendants’ [Uber and Lyft] position cannot survive even cursory examination. … To state the obvious, drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business.” Schulman stayed his injunction until August 20. Both Uber and Lyft appealed the decision to the California First District Court of Appeal.
    • Lawyers for Uber and Lyft said that their companies could suspend rideshare operations in the state unless the judge’s injunction was stayed.
  • August 20, 2020: The California First District Court of Appeal temporarily blocked Schulman’s ruling. Instead, the Court of Appeal gave Uber and Lyft until August 25 to file written consents to expedited procedures. Uber and Lyft have until September 4 to file opening briefs, as well as sworn statements from their CEOs confirming that the companies have developed AB 5 implementation plans should Proposition 22 be rejected and the courts uphold the injunction.
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