“It is time for Uber and Lyft to fulfill their responsibilities and the people who make them successful: their workers,” Becerra said in a statement about the mandate the state intends to present. “Misclassifying your workers as ‘consultants’ or ‘independent contractors’ simply means you want your workers or taxpayers to pay the bill for your employer obligations … We are seeking a court order to compel Uber and Lyft to play by the rules. “
“We believe the courts should let voters decide,” Lyft spokeswoman Julie Wood said in a statement provided to CNN Business. “Trying to force drivers to relinquish their independence 100 days before the election threatens to leave one million more people out of work at the worst possible time.”
Wood said the company plans to oppose the push to reclassify workers.
“The vast majority of drivers want to work independently, and we have already made significant changes to our application to ensure that it continues to be so under California law,” an Uber spokesman said in a statement. “When more than 3 million Californians are out of work, our elected leaders should focus on creating jobs, not trying to shut down an entire industry.”
AB-5 has long been viewed as a possible existential threat to many concert economy companies such as Uber and Lyft, which developed their businesses largely by treating their workers as independent contractors rather than employees. In addition to not receiving basic worker protections, drivers also pay their own expenses, including gasoline and vehicle maintenance.
Each of the Uber and Lyft shares ended Wednesday with a drop of more than 7%, while the Dow and S&P 500 fell approximately 2.5%.
A legal filing on the preliminary injunction requests a hearing on July 23.