Uber and Lyft drivers are classified as employees, the California Public Utilities Commission has officially ruled. The regulator, which oversees ride-hailing companies, declared its decision in an order published on Tuesday. It said “a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor” under AB5, the state’s new law covering gig work, which became effective on January 1st, 2020.
In its order, the Commission mentioned that Uber filed a lawsuit in federal court to prevent its drivers from being classified as employees under AB5. It also noted that Uber and Lyft successfully “placed on the November 2020 ballot a measure that would exclude all app-based drivers from AB5.” The lawsuit and ballot don’t affect the Commission’s authority over ride-hailing services, though, so their drivers are “presumed to be employees.” That means the regulator must ensure that ride-hailing services “comply with those requirements that are applicable to the employees of an entity subject to the Commission’s jurisdiction.”