Uber Loses California Gig-Worker Appeal: What it Means for Drivers and the Future of Work

An Uber driver picking up a customer, a perfect example of the people who will be impacted after the announcement that Uber loses California gig-worker appeal.Buckle up, gig workers and business owners, because a recent California court decision has sent the gig economy into a tailspin. As this niche continues to grow and evolve, many states are assessing the need for regulation. Now, ridesharing titan Uber faces a major setback after a federal appeals decision has upheld a California law that could classify drivers as employees. This ruling has sent shockwaves through the gig economy, raising questions about the future of flexible work arrangements, employee rights, and worker rights. A few weeks after Uber loses the California gig-worker appeal, the impact this will have in a broader sense on employment law is still unclear for most. I am happy to explain it.

As a thought leader and legal commentator on all aspects of employment law and the workplace, my passion is empowering employers and employees to evolve alongside employment law changes and stay ahead of the curve. Let’s dive into the implications of this failed appeal. 

Important Context after Uber Loses California Gig-Worker Appeal

On Monday, June 10, a U.S. appeals court rejected a bid by Uber and their subsidiary, Postmates, to revive a challenge to a California law that could force these companies to treat drivers as employees instead of independent contractors. 

Before we get into the ripple effect that could result from Uber’s bid to overturn a recent California gig worker law, also called AB5, it’s essential to provide some context. Because the reality is much more complicated than the simple headline, Uber Loses California Gig-Worker Appeal

This battle began in December 2019 when Uber and two drivers sued over the California law, claiming that AB5 was “an irrational and unconstitutional statute designed to target and stifle workers and companies in the on-demand economy.”

A federal judge in Los Angeles dismissed the lawsuit at an earlier stage, but it was eventually revived. The court claimed that Uber’s lawsuit was sustained by the “piecemeal fashion” of the law exemptions. Still, the recent ruling nullified this early win, which led us to where we are today.

AB5 created stricter criteria for classifying workers as independent contractors, potentially guaranteeing them minimum wage and overtime pay, among other benefits. In response to AB5, Uber and other gig companies fiercely combated this new legislation.

AB5 raised the bar for proving workers are independent contractors, requiring companies to show that workers are not under its direct control or engaged in their usual course of business and operate within their own independent businesses. 

Uber argued that their employees are independent contractors and not employees, and they argued that AB5 could potentially stifle the flexibility and innovation that have, thus far, defined the gig economy. However, the federal appeals court didn’t quite agree. 

During this bid to challenge the law, an 11-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco upheld a lower court ruling that said Uber failed to show that the 2020 state law unfairly targeted app-based transportation while exempting other industries. 

Essentially, the court determined that the law does not illegally target transportation gig workers and, in reality, merely changes regulations for all independent contractors. 

This panel ruled that AB5’s definition of an employee aligns with existing labor laws and that Uber exerted enough control over its drivers to qualify them as employees under the law. What does this mean for the future of gig-work and employment law? Let’s get into it! 

Related Article: Exempt or Not? California AB2257 Creates New Exemptions for Independent Contractors

The Implications after Uber Loses California Gig-Worker Appeal

For rideshare app drivers and employees in California, the court’s decision has the potential to change their working conditions. Following this ruling, drivers could be entitled to:

  • Minimum wage
  • Overtime pay
  • Reimbursement for expenses
  • Paid sick leave
  • Unemployment benefits
  • Worker’s compensation

Currently, the future remains uncertain, and Uber has suggested that they may appeal the decision to the CA Supreme Court. Meanwhile, other states are monitoring this situation closely, and some are considering the need for similar legislation.

Many expect the ripple effect of this ruling to extend far beyond the Golden State’s borders. With so many other companies in the gig economy, from food delivery services to freelance platforms, many businesses will face similar obstacles as legislation challenges their worker classification models.

For employers, this means they must be ready to adapt and adhere to stricter regulations or risk being hit with lawsuits and penalties. For employees, this ruling signals a turning point for their rights in the gig economy which has, thus far, often subjected them to low wages and few benefits.

Still, many questions remain as we move forward in this new chapter of employment law and the gig economy. How will companies adapt their business models to accommodate employee classification? Will these changes impact the affordability and convenience of ride-sharing apps, among others? Will the potential increase in costs be passed on to consumers?

Only time will tell how this gig-worker appeal and legal battle will shape the future of the gig economy and the rights of the workers who fuel it. And you can rest assured that I will be here every step of the way as it unfolds.

Related Article: California’s AB 5 Potential Uber/Lyft Shutdown and Tips for Properly Classifying Workers

Thought Leader & Legal Commentator on Uber Losing its California Gig-Worker Appeal

Changes to employment law have a huge influence on the work environment and culture that employers and employees must operate within. Understanding these recent shifts is not a luxury. It is essential for businesses to have a firm grasp of these law changes to avoid liability, lawsuits, and costly mistakes, and it is crucial for employees to understand their rights. As a thought leader and legal commentator on breaking employment law updates and situations similar to Uber losing its California gig-worker appeal, as well as all aspects of employment law, I am uniquely positioned and qualified to provide expert insight and analysis on all employment law issues. These issues can be complex, so you need a seasoned legal professional to shed light on them. My passion is being a beacon in uncertain times of transition that provides that light. 

Legal Commentary on Breaking Employment Law News

I am a former employment and labor law attorney turned mediator, ADR, and conflict resolution specialist who believes it is crucial to stay current with groundbreaking changes to employment law for employees and employers alike. My passion is educating the general public on recent developments in employment law and the workplace trends that impact them as a thought leader and legal commentator. As such, I am uniquely qualified to discuss recent cases and all aspects of employment law. My more than 20 years of experience as a media legal analyst and contributor have led to my own radio show on Tavis Smiley’s KBLA Talk 1580, “Legal Lens with Angela Reddock.” I also am a regular speaker and blogger on employment law and issues related to the workplace.




Also, learn more about my book – The Workplace Transformed: 7 Crucial Lessons from the Global Pandemic – here – https://angelareddock-wright.com/book/.

For media inquiries, please reach out to josh@kwsmdigital.com.

For more information regarding mediation and dispute resolution resources for both employees and employers, connect with let’s connect on LinkedIn for new updates or contact me here. You may also follow me on Instagram.

This communication is not legal advice. It is educational only. For legal advice, consult with an experienced employment law attorney in your state or city.

Leave a Reply

Your email address will not be published. Required fields are marked *