Although this issue is currently under review by the court system, California law currently states that Lyft and Uber must classify their drivers as employees rather than independent contractors.The employee versus independent contractor distinction is important because an employer can only be held liable for its employees’ perpetrations of sexual assault (not those committed by its independent contractors).
The classification of rideshare drivers as employees is due to a recent assembly bill that was passed by California legislators. Assembly Bill 5 (AB 5) makes it harder for employers to classify workers as independent contractors as opposed to employees. Under the new California law, businesses must consider workers as employees unless they meet a three-part test. To exempt a worker from classification as an employee, a business must demonstrate that: 1) the hiree is free from the control and direction of the hiring business; 2) the hiree is performing work outside the normal course of the hiring business; and 3) the hiree customarily works independently in the same trade or occupation as the work they are doing for the hiring business.