State Agency Rules Uber and Lyft Drivers are Employees

The state’s Public Utilities Commission, the government body responsible for licensing and regulating some transportation companies officially ruled Tuesday that it would formally consider Uber and Lyft drivers employees, in line with a newly-enacted state law known as AB5.

AB5 codifies into law a landmark Supreme Court of California case which ruled most freelancer workers are actually employees and must be classified as such, dramatically restricting who can qualify as an independent contractor, including freelance journalists, musicians and artists is Pasadena.

The companies are currently known within California as “transportation networking companies, (TNC)”

It is not known how the ruling will impact the companies.

AB5 which was voted into law by the California State Assembly in September of 2019, and went into effect on January 1st of this year, laid out a three part “ABC” test which determines if a worker is an independent contractor, depending on what work is being performed and nature of the business of the company that the contractor is working for.

The case laid the groundwork for the passage of AB 5, a bill  began over a decade ago when a driver for a delivery company felt that he could possibly establish precedent that would enable drivers as regular employees in California.

But the bill’s original author promised to make changes to the bill to protect some freelancers.

“Having heard additional feedback from a variety of freelance writers, photographers and journalists, we are making changes to Assembly Bill 5 that accommodate their needs and still proved protections from misclassification,” said Lorena Gonzalez (D-San Diego).

Uber and Lyft will have to provide workers’ compensation for their employees by July 1. If they do not, they could lose relevant operating authority.

Last month, Attorney General Xavier Becerra and city attorneys from San Francisco, Los Angeles and San Diego sued over the companies’ alleged non-compliance with AB5