As California becomes one of the first states to take over Big Tech in the ongoing battle over the employment status of Uber and Lyft drivers, the scofflaw ride-hailing companies are now working their political contacts to prevent them from complying with a law that has been on the books for almost a year.
Earlier Thursday, an appeals judge granted an emergency stay, lifting the bans against Uber Technologies Inc. UBER,
and Lyft Inc. LIFT,
LIFT,
which mandates them to comply with California law, known as AB-5, which companies that drive them must classify their drivers as employees instead of independent contractors. The companies had threatened to close operations in the state instead of complying with the ruling. They now have a rapid time frame for their appeal, which, in an unusual application by appellate judge PJ Pollack, is now being consolidated. Both Uber and Lyft must agree to the fast-track procedures until August 25 and then submit their opening letters by September 4.
The two companies, but Uber even more so, have taken an act-first-and-seek forgiveness-later approach when it comes to complying with international and local regulations. Now both are using all the political power they have accumulated over the past few years to buy more time into this battle, in the hope that a voting measure in the upcoming November elections, known as Proposition 22, will reverse AB-5.
Businesses are spending millions of dollars fighting a law that will increase their operating costs if they are forced to pay benefits to their drivers. Their threats to close their operations in the state caused enough concern to gain support in some quarters.
Late Wednesday, the mayors of San Jose and San Diego issued a joint statement, saying they were seriously concerned that nearly 1 million gig-economy workers in California would lose their jobs if Uber and Lyft closed their operations in the Golden State. They also played the pandemic card, saying many of those drivers help dog bags and transport patients seeking medical care. In their statement, they called for the higher appeal to stay the order against the companies.
“The vast majority of drivers want to remain self-employed and look for solutions that protect their independence while also providing additional benefits,” said San Diego Mayor Kevin Faulconer and San Jose Mayor Sam Licardo. the party line of the companies.
In addition, Uber and Lyft – along with DoorDash – have spent at least $ 30 million each so far on Prop. 22, which would free them from AB-5. That while the state has enacted a new law that provides more protection for workers, the companies involved have done everything possible to keep their share of performance as low and as high as possible. Instead of preparing for a major change, and making changes in their operations to comply with the new law, they persistently opposed it.
However, the judge of the appeal requested that the CEOs of both companies submit an affidavit, also by September 4, “confirming that it [the company] has developed implementation plans under which, if this court confirms the provisional order and Proposition 22 on the November 2020 vote fails. “
California is leading the way in these battles against Big Tech, from this fight with Uber and Lyft to the California Consumer Protection Act (CCPA) which is FB of Facebook Inc.,
next nightmare, to a law requiring women on business management. And just last week, a new bill passed that would require racial diversity on boards by the State House Committee on Banking and Financial Institutions.
Whether these efforts to govern in tech giants will be successful or not is too early to say, but it is clear that the rest of the US is looking at them. The Uber and Lyft showdown is a major battle in the war against the dominance of Big Tech.
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