In California, a lower court ruled that rideshare companies like Uber and Lyft would need to make their drivers employees. With this new classification, workers would receive minimum wage as well as benefits like paid sick leave and health insurance.
According to an article from The Washington Post, in California’s 1st District Court of Appeal, the companies stated this ruling would harm their companies, possibly resulting in longer wait times for rides and more expensive rides. They also said it would completely change their companies.
By showing that the new law would change their businesses in a way that they couldn’t recover from, which could also include needing to leave certain markets as well.
During this process, Uber and Lyft have been grouped together for the most part. However, Uber is now seeking to separate themselves and show that they’re operating differently than Lyft. Uber states that they’ve allowed drivers to have independence when it comes to setting prices and allowing riders to specifically request drivers. Because of these differences, Uber wants their case separate from Lyft.
Lyft responded with questioning if the new law, Assembly Bill 5, was directed at Uber and Lyft in the first place, and also wanted to examine if the bill should apply to all companies.
The judges questioning the companies brought up the matter of whether or not Uber and Lyft are complying with the law.
They also raised questions about the companies not needing to provide their workers with minimum wage, even though Uber and Lyft claim there hasn’t been proof of drivers making less than minimum wage. The drivers do not earn when they’re waiting for a ride, even though this makes up about a third of their time when they’re working.
Uber and Lyft also claim many workers do not want the classification as employees and that workers like being able to have flexibility more than the guarantees of employment.
One attorney argued that while some workers may align with this, doing so is illegal in California.
This decision is being hard fought and could potentially set a precedent for other states. The changes it could make to these companies in California alone could affect the workers and those who use these services.
Companies like Uber and Lyft seem insistent on doing whatever they can to prevent the changes set down by Assembly Bill 5 from affecting their companies.
The Rideshare Law Group will continue to follow this development and update you. If you have any questions about an accident involving Uber or Lyft, get in touch with us today.