Uber and Lift will not destroy California drivers and riders at midnight after a state appeals court continues – for now – treating its drivers as self-employed, instead of employees.
The court’s order halted a brief but fierce game of chicken between the companies and the state of California, which sued them to enforce a new labor law, last fall. Uber and Lyft had threatened to leave the state over the law, Assembly Bill 5, which makes a stricter test to differentiate employers from employees. The companies said they did not have enough time to prepare for what would have been a monumental shift in their business model in the midst of a pandemic, although the law was passed last year.
For drivers and riders, the status quo is now set to continue until at least mid-October, when judges will hear the companies’ and state’s arguments in court. The appeals court also gave the companies a guarantee that they will comply with the law if they lose. Employers who are employees instead of contractors are entitled to minimum and overtime pay, paid sick leave, health benefits, and access to social insurance programs such as unemployment.
The decision of the higher appeal probably means that voters in California – instead of judges – will determine the outcome of the Golden State labor struggle. Uber, Lyft, Instacart, and DoorDash support a statewide voting measure, known as Proposition 22, to create a “third” category of employment, which would include a minimum wage, some car insurance and car maintenance costs, and a support point for health care. The companies have poured more than $ 110 million into a “Yes to 22” campaign.
If Proposition 22 fails, and companies do not dominate in their profession, Uber and Lyft would have to reconsider their business model in California, which is both their home state and host to some of their largest markets. Lyft has said in legal filings that compliance with AB 5 would mean “restructuring the company and changing its relationship with drivers by, for example, drastically reducing their flexibility and taking control of their time to manage them as employees.” Some drivers say they have the flexibility to work whenever and wherever they want to pull themselves to the platform.
The New York Times reported this week that both companies have considered a franchise model in the state, which allows them to avoid treating drivers as employees. Or the companies could leave the state for good. Both companies responded to questions about their plans if Proposition 22 failed.
In a statement, Uber spokesman Davis White said the company was “pleased that the Court recognized the important issues in this case, and that access to these critical services will not be denied while we continue to advocate for the possibility of drivers working with the freedom they want. “
Lyft spokeswoman Julie Wood said: “While we do not have to stop operations tonight, we must continue to fight for independence plus benefits for drivers.”
When the appeal was released, workers and organizers consulted with drivers’ advocacy groups Gig Workers Rising and We Drive Progress in front of Uber headquarters on Market Street in San Francisco – although Uber employees may be in the middle of nowhere. years of working from home. One organizer dressed in a baby outfit to represent the companies for riding hail as drivers rode the block in a pandemic-friendly caravan, limping in support. “This rally, this fight has always been about defeating Prop. 22, the last attempt by Uber and Lyft to write themselves out of the law,” said driver and organizer of the Rig organization Edan Alva in a statement. “We, the workers, remain focused on defeating Prop. 22.”
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