New court ruling could force Uber, Lyft to convert drivers to employees

Enlarge / A Lyft driver in San Francisco, California. (credit: Kelly Sullivan/Getty Images for Lyft)

The California Supreme Court has ruled that it will now be harder for employers to formally classify their workers as independent contractors rather than employees.

The court's Monday opinion in Dynamex v. Superior Court of Los Angeles County could have a profound impact on many tech companies like Uber, Lyft, Instacart, and others that provide on-demand services. Dynamex is a courier and delivery company based in Kent, Washington.

The overwhelming majority of gig economy companies' workers are not employees, and so they do not get any health, retirement, unemployment, or other benefits that typically come with full-time employment. Uber, for example, uses the euphemism "driver partners" when referring to its non-employee drivers, who constitute the backbone of the company's service.

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