A splash of notifications lit up the phones of Lyft and Uber users in California earlier this week.
“Save Rideshare in California!” read one from Lyft.
“Service update: Ridesharing in CA may be disabled,” Uber wrote.
The floor of warnings is the result of California’s attempt to bring companies to gig economies in line with state labor law – a clash that could come to a head this week. By Friday, the millions of Californians using Uber and Lyft to ride hills could force themselves to use other modes of transportation. If and when the companies restart services here, it could be in a dramatically different form.
In early August, a judge in San Francisco’s Superior Court ordered companies to classify their drivers as employees rather than independent contractors, and build in a 10-day window for companies to appeal the motion. With that window closed Thursday night, Uber and Lyft are threatening to shut down afternoon services, saying they can not transition their business models fast enough.
The judge, Ethan Schulman, dismissed the first appeal of both companies last week. Uber and Lyft have filed lawsuits for immediate residence in a California court, where they are expected to rule Wednesday. The court could appeal and stay on Schulman’s order for some time, or refuse to issue a ruling, which would mean Thursday’s expiration date would remain in place.
The court battle began with a lawsuit brought by State Atty. Gen. Xavier Becerra argued in May that due to misclassification of drivers as independent contractors, companies were deprived of employee protection and benefits, such as a minimum wage and unemployment insurance.
The move was part of the state’s effort to force companies to comply with the Landmark Employment Act Assembly 5, which set stricter standards for companies to treat workers as self-employed rather than as employees. Essentially designed to provide employment benefits to gig workers, the law went into effect on January 1, but companies such as Uber, Lyft, Doordash and Postmaten have vehemently opposed compliance.
Uber and Lyft have indicated that shutdowns could continue through the November election, when voters in California will decide on a voting initiative that would largely undermine AB 5 by cutting out a third category of work for drivers. The companies have spent millions on the initiative and an advertising campaign to support it.
Critics have said the companies have had substantial time to figure out how to proceed with their operations, given AB 5 was approved about a year ago, and are using the threat of closing their service in California to provide a favorable outcome. used for Prop. 22, bench on scare tactics to persuade voters to support the initiative.
“Uber and Lyft are threatening to kill jobs in California. I believe the companies are trying to force us into a decision to give them what they want and that is Prop. 22, which is to deny us the basic worker protection and benefits we have earned, “said Cherri Murphy, a driver for riding company for about three years. An Oakland resident, Murphy is also an organizer with working groups Gig Workers United and Rideshare Drivers United, who have struggled to win protections for drivers.
Uber shrugged back at this assessment, saying many drivers would rather remain independent contractors. “The vast majority of drivers want to work independently, and we have already made significant changes to our app to ensure that the case remains under California law. “If more than 3 million Californians are out of work, our elected leaders should be focused on job creation, not trying to shut down an entire sector during an economic depression,” Uber spokesman Davis White said in a statement.
Lyft spokesman CJ Macklin declined to comment on the record, but pointed to an excerpt from Lyft’s call last week. Co-founder John Zimmer said on the call that if efforts to appeal the intelligence were unsuccessful, the company would be forced to halt operations in California.
“Fortunately, voters in California can make their voices heard by voting yes to Prop 22 in November,” Zimmer said, and if passed, the measure would “protect the independence and flexibility of drivers while providing historic new benefits and protections.” . “
Uber and Lyft are tight-lipped about what the future holds for when they are forced to comply with AB 5.
The companies are quietly investigating the licensing of their brands to independently operated franchises that operate car fleets in the state. Such a model would place more layers between the companies and the drivers, giving them more space to prevent the drivers from being claimed as employees. Uber is already working on this model in Germany and Spain.
When asked about these talks, which were first reported by the New York Times, Lyft fought back. “We have considered alternative models, and the one that would work best for drivers is what we support in the mood: they remain independent and can work whenever they want, while also getting extra health benefits and a guarantee of earnings. , “spokeswoman Julie Woods said in a statement.
Labor lawyer Shannon Liss-Riordan, who has litigated against Uber over the years on behalf of drivers, said there is nothing about employee status that would prevent companies from giving their employees flexibility at work.
“Uber’s strategy has long been to cancel legal obligations,” said Liss-Riordan. “Bad for me to understand why a company has to quit to comply with the law.”
Uber has no plans to halt operations for its Uber Eats delivery service because Becerra’s lawsuit does not specify drivers for that platform, the company said. Uber’s delivery orders more than doubled in the second quarter, with Americans relying on deliveries to prevent exposure to coronavirus during the pandemic. At the same time, ice skating trips have taken a major hit, 75% down from last year.
San Francisco’s district attorney sued DoorDash food delivery app in June, claiming employee statements. Uber said it expects a similar battle on this front.
