A passenger walks previous an Uber sign at Los Angeles International Airport. REUTERS/Mike Blake
A U.S. appeals court on Friday revived a lawsuit by Uber that challenged a California law that created it tougher for the rideshare firm to classify workers as independent contractors.
In a main victory for the gig economy, which relies heavily on contractors, the 9th Circuit Court of Appeals stated the state need to face claims that Assembly Bill five is unconstitutional, improperly singling out the ride-hailing business when exempting numerous other folks.
It is the second court selection this week that supports companies’ capability to provide versatile contract function alternatively of complete-time employment. The state’s appeal Monday upheld Proposition 22, which voters passed in 2022 to especially give app-primarily based corporations like Uber the capability to employ workers as contractors.
Uber and the California lawyer general’s workplace did not straight away respond to requests for comment on the most recent ruling.
AB five, which took impact in 2020, imposes a larger threshold to show that workers are independent contractors rather than staff, which have higher legal protections and can price companies up to 30% a lot more.
California lawmakers exempted numerous companies and companies from AB five, such as “referral agencies” that connect workers and shoppers, but did not especially exempt app-primarily based transportation and delivery solutions.
That indicates Uber is topic to the law, when pet-sitting service Wag, which has been dubbed “Uber for dogs,” is not.
A 3-judge panel of the Ninth Circuit stated Friday that the “gradual nature” of the exemption from the law is adequate to retain Uber’s lawsuit alive.
“Excluding thousands of workers from AB 5’s mandate runs counter to the law’s stated goal of providing workers the ‘fundamental rights and protections they deserve,'” Circuit Judge Johnny Rawlinson wrote for the court at the time.
Reuters contributed to this short article.