In the months-long war of California versus gig economy companies, the state of California now requires Uber and Lyft to reclassify their drivers as employees of their companies.
In the month of May, Attorney General to California named Xavier Becerra sued Uber and Lyft for misclassifying drivers as independent contractors claiming that ideally, they are employees under the state’s AB5 law.
City Attorneys of San Francisco, LA, and San Diego were involved too.
Becerra announced Wednesday that he along with the group of city attorneys are filing a “preliminary injunction” against the companies to compel them into reclassifying drivers as employees.
“It’s time for Uber and Lyft to own up to their responsibilities and the people who make them successful: their workers, misclassifying your workers as ‘consultants’ or ‘independent contractors’ simply means you want your workers or taxpayers to foot the bill for obligations you have as an employer — whether it’s paying a legal wage or overtime, providing sick leave, or providing unemployment insurance. That’s not the way to do business in California.
We’re seeking a court order to force Uber and Lyft to play by the rules.” said the Attorney General regarding the injunction.
Numerous lawsuits have been registered against companies like Uber, Lyft, DoorDash to name a few, that can be dated back to 2013.
AB5 law, reinforced on January 1st, may expect companies to convert their “independent contractors” into employees. Legal experts maintain that it will become harder for companies to continue with the ways this way.
While the companies claim that the law poses a threat to their business forms.
A $90 million ballot initiative has been taken up by Uber, Lyft, and DoorDash with chipping in $30 million each. Instacart and Postmates are additional supporters.
“We believe the courts should let the voters decide,” Julie Wood, a Lyft spokeswoman responded.
If the ballot measure is passed, it can exempt drivers from certain benefits as an employee but still grant some compensations.
While an Uber spokesperson maintained that, “The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law,” they further mention how 76% of jobs will be at stake if drivers are reclassified as employees.
There is also a mixed response by drivers, while some prefer independency, thousands are pro-ABR as well.
These AB5 supporters were seen protesting outside the Uber CEO Dara Khosrowshahi’s house in San Francisco.
“This is yet another malicious legal action against drivers that underscores exactly why we’re pursuing the ballot measure,” said Stacey Wells, spokeswoman for the Uber-and-Lyft funded group.