Appeals Court Upholds Ruling On Classifying Lyft, Uber Drivers As Employees Amid Crucial Prop. 22 Vote

SAN FRANCISCO (CBS SF) -- A state appeals court ruled against Uber and Lyft on Thursday, upholding an injunction saying the ride-hailing giants must reclassify drivers as employees.

Thursday's unanimous court decision comes as voters are deciding on Proposition 22, a ballot measure that would allow the companies to continue classifying drivers as independent contractors.

"This decision makes it abundantly clear that Uber and Lyft have been breaking the law for years," San Francisco City Attorney Dennis Herrera said in a statement. "The only thing 'radical' and 'unprecedented' is the scope of Uber and Lyft's misconduct. This is a victory for the people of California and for every driver who has been denied fair wages, paid sick days, and other benefits by these companies."

San Francisco, along with the cities of Los Angeles, San Diego and the State of California, sued Uber and Lyft alleging violations against recently-enacted Assembly Bill 5, claiming they "exploited hundreds of thousands of California workers" by classifying drivers as independent contractors instead of employees.

The ride-hailing companies, along with DoorDash, have spent at least $180 million towards passing Proposition 22.

The court's ruling is set to take effect in 30 days, after the November elections.

Election Day is November 3.