1st District upholds order for companies to comply with gig worker law

Less than two weeks before California voters decide whether rideshare drivers should be exempted from Assembly Bill 5, a three-justice panel in the 1st District Court of Appeal upheld a preliminary injunction requiring the companies to comply with the labor law.

"Mindful that -- absent legal error -- our role in reviewing a decision to issue interim injunctive relief is a limited one, we address here whether the trial court abused its discretion in granting a preliminary injunction that restrains Uber and Lyft from classifying their drivers as independent contractors," read the order, which was issued late Thursday afternoon. "Seeing no legal error, we conclude the trial court acted within its discretion and accordingly affirm the order as issued."

Justice Jon B. Streeter wrote the order, joined by Presiding Justice Stuart R. Pollak and Justice Tracie L. Brown. People v. Uber, A160706 (Cal. App. 1st Dist., filed Aug. 17, 2020).

San Francisco Superior Court Judge Ethan P. Schulman issued the preliminary injunction on Aug. 10, but the court of appeal stayed it 10 days later. According to the order, the stay "shall expire 30 days after issuance of the remittitur in this appeal."

Uber and Lyft did not respond to requests for comment by press time.

Thursday's order said the preliminary injunction was necessary because "irreparable harm to drivers on a broad scale is ongoing." The court additionally rejected the companies' argument that they do not hire drivers, but offer them technological services instead.

"Uber and Lyft both solicit riders. ... They screen drivers and set standards for vehicles that can be used. Defendants track and collect information on drivers when they are using the apps, and they may use negative ratings to deactivate drivers. Riders request rides and pay for them through defendants' apps, and the drivers' portions are then remitted to them, either through a payment processing service or a dedicated bank account," the order read.

"These facts amply support the conclusion that, whether or not drivers purchase a service from defendants, they perform services for them in the usual course of defendants' businesses. Defendants' businesses depend on riders paying for rides."