California court says Uber, Lyft can treat state drivers as independent contractors

In this Jan. 12, 2016, file photo, a ride share car displays Lyft and Uber stickers on its front windshield in downtown Los Angeles. A California appeals court ruled March 13, 2023, that a voter-backed initiative exempting Uber and Lyft from a key provision of state employment law is constitutional, a reversal of a lower court decision that marks a win for the ride-hailing giants. (Richard Vogel/AP)

SACRAMENTO, Calif. — App-based ride hailing and delivery companies like Uber and Lyft can continue to treat their California drivers as independent contractors, a state appeals court ruled Monday, allowing the tech giants to bypass other state laws requiring worker protections and benefits.

The ruling mostly upholds a voter-approved law, called Proposition 22, that said drivers for companies like Uber and Lyft are independent contractors and are not entitled to benefits like paid sick leave and unemployment insurance. A lower court ruling in 2021 had said Proposition 22 was illegal, but Monday's ruling reversed that decision.