Dara Khosrowshahi, CEO of Uber Technologies Inc., speaks during an interview in Tokyo, Japan, on Wednesday, July 3, 2019.
Akio | Bloomberg | Getty Images
A California judge on Monday issued a preliminary injunction demanding that Uber and Lyft stop classifying their drivers as independent contractors pending further action by the court. The order will be valid after 10 days, as companies request a short stay during the appellate review process.
California Attorney General Xavier Becerra requested the information as part of a lawsuit he filed in May with city attorneys from San Francisco, Los Angeles and San Diego. The suit, filed in San Francisco Superior Court, alleged Uber and Lyft violated the state’s new law, known as Assembly Bill 5 (AB5), which was created as a way to classify gig workers as complete. employees and provide benefits to their employers. Uber and Lyft were among a group of tech companies that had previously opposed the bill, claiming that their workers enjoyed the flexibility of creating their own schemes as contractors.
California officials sought a call for the alleged declaration and restitution for workers and civil fines worth up to hundreds of millions of dollars.
Shares of Uber were 0.8% below expanded trading Monday and Lyft shares were down 1.7%.
Representatives of the agency Uber, Lyft and Becerra did not immediately respond to requests for comment.
Uber CEO Dara Khosrowshahi called for a ‘third way’ to classify workers in a letter to President Donald Trump in March as the first round of coronavirus measures was negotiated. He argued that there should be a way for workers to gain protections without sacrificing the flexibility of contract work.
In the ruling, Judge Ethan Schulman acknowledged the value of flexibility offered by Uber and Lyft, writing, “The court does not take light from defenders”, showing that a preliminary injunction could also have a negative effect on some of its drivers, from who many desire the flexibility to continue working as they have in the past, and may have promises that make it difficult or impossible for them to become full-time employees. “
But Schulman wrote that Uber and Lyft’s concerns that the intelligence would have “far-reaching effects” were only exacerbated by defenders and long-standing refusal of defenders to comply with California law. are that they affect the lives of many thousands of people. “
Schulman wrote that any impact of the order on Uber and Lyft’s companies would be likely due to the fact that both have said that the “vast majority of their drivers work on a casual or sporadic basis” and the reality that the coronavirus pandemic “has drastically reduced the demand for defensive services.”
“Now, when defenders’ ridership is at an all-time low, it may be the best time (if not the worst) time for defenders to change their business practice to comply with California law without causing widespread negative effects. on their drivers, “Schulman wrote.
Uber and Lyft sought to delay the ruling until there was a ruling on AB5’s constitutional challenge from AB5 or until voters waited in line for a vote to sponsor them to break the law. The court rejected those requests.
However, the ruling does not end the legal battles for Uber and Lyft. Last week, the California Labor Commissioner filed lawsuits against companies that claim loan theft because of statements. The commission is trying to recover wages they believe were owed to drivers currently classified as contractors. The complaints were filed in the Superior Court of Alameda County.
This story unfolds. Check back for updates.
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