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Lyft president ‘extraordinarily assured’ firm will win authorized battle to categorise gig employees as contractors


Lyft President John Zimmer advised CNBC’s Jim Cramer on Monday he’s assured the ride-hailing firm will overcome the most recent authorized impediment that threatens its working mannequin.

The latest hurdle got here Friday, when a California judge ruled against a ballot measure accepted final yr by voters within the state often called Proposition 22. It exempted drivers for firms like Uber and Lyft, as properly food-delivery corporations, from California labor legislation that attempted to make sure they had been categorised as workers, not unbiased contractors.

The choose, Alameda County Superior Courtroom Decide Frank Roesch, wrote in his ruling that Proposition 22 violates California’s state structure as a result of “it limits the facility of a future Legislature to outline app-based drivers as employees topic to employees’ compensation legislation.” Consequently, Roesch contended, the whole poll measure can’t be enforced.

Shield App-Primarily based Drivers and Companies Coalition, which backs Preposition 22, advised Reuters it’s interesting Roesch’s choice.

“As this goes to greater courts, the attraction courtroom in California, we’re extraordinarily assured that the proposition will likely be upheld,” Zimmer, who additionally co-founded Lyft, stated in an interview Monday on “Mad Money.”

Lyft, Uber and different companies within the so-called gig economic system comparable to DoorDash spent millions of dollars in favor of the preliminary poll measure, which in November handed with nearly 59% of California voters supporting it.

The businesses had warned that classifying drivers as workers would result in greater working prices — comparable to needing to pay into unemployment insurance coverage — that may, in flip, be handed onto shoppers by way of value will increase for companies.

Lyft and Uber have struggled to constantly obtain profitability all through their histories, however each try to get there. Buyers are searching for progress on these objectives, which might be difficult by needing to regulate their enterprise fashions on driver classification.

Because of Roesch’s ruling Friday, although, Zimmer stated there will likely be “no change” to Lyft’s operations in California.

Requested by Cramer if Lyft anticipated to have progress on the attraction inside roughly six months, Zimmer responded: “It is laborious to foretell authorized processes totally, however we’re optimistic that inside that timeframe we’ll get a extra remaining decision.”

Lyft shares rose nearly 3% Monday, ending at $47.24 apiece. Uber additionally closed greater for the session, advancing 2.6% to $41 per share.