There has been a new order from a California judge that states Uber and Lyft need to classify their drivers as employees. The rideshare companies are against this because of the cost and insist the drivers want to keep the classification as independent contractors because it offers them more flexibility. On the other hand, this classification also prevents the access to benefits like health insurance and workers’ compensation.
While tensions, particularly in California, continue on in regard to rights and wages of rideshare drivers, Uber CEO Dara Khosrowshahi has published an opinion piece in the New York Times titled I Am the C.E.O. of Uber. Gig Workers Deserve Better.
The article, which was published on August 10, focuses on the idea of whether rideshare companies treat their drivers well. Khosrowshahi acknowledges that many critics, including those at the New York Times, believe companies like Uber have failed drivers by treating them like contractors. While Khosrowshahi does not believe his company is intentionally doing anything to avoid the cost of employee benefits, he does acknowledge that the current employment system is outdated and unfair.
On August 10, a California judge granted a preliminary injunction that requires Uber and Lyft to stop classifying their drivers as independent contractors. In the event the companies continue, they’re likely to face further action from the court.
The order will take effect after 10 days. This is because the companies requested a brief staying during the appeals process. If the injunction is upheld, the ruling could have significant implications for both rideshare companies—particularly in the way of revenue. Because Uber and Lyft classify their drivers as independent workers, they haven’t had to pay for the costly benefits associated with having a full-time staff.
As the state of California continues to fight for the rights and fair wages of rideshare drivers, a group of drivers staged a protest in Oakland yesterday, dubbing the event a “people’s hearing.”
A group of drivers from Gig Workers Rising, Rideshare Drivers United, and We Drive Progress rallied, demanding the employee status they are legally owed under the California state law that went into effect in January.
As California continues to fight with Uber and Lyft over the employment status of rideshare drivers, the labor commissioner has now filed a lawsuit against the two companies for alleged wage theft. According to the lawsuit, the companies have “willfully” misclassified drivers as independent contractors, which has deprived them of basic worker protections and wages.
According to the Los Angeles Times, the goal of the lawsuit is to seek to “stop the two companies from misclassifying their drivers and allow the Labor Commissioner to recover unpaid wages and other compensation that drivers are entitled to.” It argues that Uber and Lyft have failed to pay drivers minimum wage, overtime, compensation for rest periods and business expenses, and additional damages.