Lift car.
Photo: Justin Sullivan / Getty Images
For months, the state of California and two leading ride-healing companies, Lyft and Uber, have been embroiled in a bitter legal battle. The problem at the heart of the conflict: Lyft and Uber do not want to follow the recent legislation on pro-workers in California that requires them to hire their drivers – some of whom work well over 40 hours a week – as employees who are entitled to benefits. The companies have consistently argued that their drivers, who are currently classified as independent contractors, should not be considered as employees. However, many drivers disagree. “Next month, I’m turning 60,” one driver told Motherboard. “I want to pay sick days, health insurance, and overtime, but they want to take that away.”
This week, the situation came to a head because a court-mandated deadline for Lyft and Uber to reclassify their employees was fast approaching. On August 20, a day before the deadline, Lyft announced that it would suspend operations in California, and Uber signaled that it would follow suit. That same day, a California appeals court granted the companies an emergency stay to continue with business as usual, and prevented a closure – for now.
What’s going on? Are Uber and Lyft finally stopping operations in California? Here’s what we know.
California is one of the most pro-labor states in the country. Last September, it passed Parliament Bill 5, a landmark labor law that gets on the declaration of workers as independent contractors. Mint classification is rampant, and often benefits employers: By misclassifying employees as self-employed, companies can get away with underpaying workers and deny them benefits such as overtime pay, paid sick leave, and unemployment insurance.
Even before California passed AB5 last fall, both ride-sharing companies argued that drivers should not be considered employees. According to Washington Peal, the companies have argued that the legislation does not apply to them, and that complying with the law would harm their companies are not one of these gains. (Both companies claim to be technology platforms, not transportation companies, which means their drivers do not contribute to the core of their business.) But per Wired, labor experts agree that among AB5 drivers qualify as employees, which Uber and Lyft require for their basic protections to provide for work, including health and unemployment insurance, minimum wage, paid sick days, and overtime pay.
Lyft and Uber have also insisted that their drivers do not want worker status, but drivers tell a different story. “We wake up and say ‘hey, it’s time we get our rights,'” said Hector Castellanos, an Uber and Lyft driver who has demonstrated in full-time support, Motherboard told earlier this month. “I had an accident in 2017 and could not run for 8 months, but did not receive any benefits from Uber or Lyft. But as employees, we do not have to wait for access to those benefits. ”
The situation began to escalate in May, when the state of California and three major cities – San Francisco, Los Angeles and San Diego – prosecuted Uber and Lyft for violating the law. In June, California Attorney General Xavier Becerra Becerra submitted a request for a lecture; then, earlier this month, a California judge gave Uber and Lyft a August 21 deadline to classify their employees. Carefully, the companies did not agree, and instead threatened to stop operations.
Threat to shut down is not a new tactic for Lyft and Uber, and it’s one that has worked in the company’s favor in the past: In the spring of 2016, both companies served in Austin, Texas. stopped, after voters approved a voting measure requiring fingerprint-based background checks on drivers, prompting the companies that drive rides to protest concerns that the legislation would lengthen the process of registering new drivers. Customers were overwhelmed, and, about a year later, Texas lawmakers filed a bill that removed the fingerprinting facility – after which both companies returned to the city.
On August 20, just one day before the California deadline – and after Lyft announced that it would suspend operations at midnight – a state stopped an appeal to the court, preventing a shutdown. In short, the 11-hour order loses companies more time to complete their profession. Now, the CEOs of Lyft and Uber have until September 4 to submit affidavits showing that they have developed a plan to comply with AB5, in case both their appeal and a current voting measure (more on that below) fail. Oral arguments are scheduled for October 13.
Like many employees of gig economy, drivers for companies with driving have suffered financially due to a reduction in work pressure amid the pandemic. With current estimates, ride bookings have fallen a whopping 75 percent in recent months. In addition, Wired reports that because Uber and Lyft do not consider drivers’ employees – and as a result do not pay into unemployment insurance programs – they often do not have the quality to find employment.
“We have millions of people who choose – not force – but who choose to fire ordinary people in the midst of a pandemic because they choose not to follow the law,” said Cherri Murphy, an Oakland resident who worked for Lyft. rides, the Washington said Peal. ‘This is no surprise to anyone; they have had a longer time to resolve this. The only people who put themselves against the wall were Lyft and Uber. ”
This legal battle also comes amid a relentless, sweltering heatwave that has sparked widespread uncontrolled wildfires in the Golden State that have shown no sign of abating, displacing tens of thousands of residents. As of Friday morning, blisters had burned more than 660,000 acres.
To further protect business interests, Lyft and Uber mobilized around a November election measure called Proposition 22, which would exempt app-based ride-sharing and food delivery services from AB5. Per Motherboard, Lyft and Uber have spent a collective $ 90 million on their campaign to pass the measure – which, if passed, could reduce drivers’ incomes to $ 5.64 per hour, according to an estimate by UC Berkeley Labor Center. The minimum wage in California is $ 12 an hour.
