Uber and Lyft Lose Bid To Delay Orders Of Driver Reclassification in California
The California Superior Court ordered ride-hailing mobile applications, Uber and Lyft, to reclassify their drivers as regular employees in a preliminary injunction issued last Monday, August 10. According to Judge Ethan Schulman, Uber, and Lyft’s classification of their employees as independent contractors are against labor laws.
California Attorney General Xavier Becerra sued the companies based on the classification of the drivers as independent contractors in contravention of a labor statute that was ratified last January 2020. The Labor Commissioner of California stated that the business models of Uber and Lyft rest on misclassification of drivers as independent contractors. The statement published last August 5 also alleged that the employment scheme of Uber and Lyft fails to adhere to the labor standards as they are deprived of working benefits.
Drivers Prefer Regular Status
In response to this, Uber and Lyft said that they would leave the California state should they be forced to reclassify their employees. The companies’ spokespersons also said that the Superior Court ruling conflicts with what the drivers want. Uber and Lyft are given until August 20 to appeal the decision stated in the preliminary injunction.
However, if they fail to file an appeal within the reglementary period, the decision becomes final and executory. Contrary to the ride-hailing companies’ claims, the Mobile Workers Alliance was satisfied with the ruling. The drivers, who’ve purchased vehicles with their own investment, also echo the labor group’s sentiments. In fact, a large portion of Uber drivers state that using their own private vehicle allows them to remain as independent contractors.
Assembly Bill 5 Affects Drivers As Contractors
Assembly Bill 5 is a California state law that came into fruition because of the ruling in a labor case. in the landmark case of Dynamex Operations West, Inc. versus the Superior Court, ruled that most workers should be rendered as regular employees. Yet, hiring entity or corporations should overcome any claims contrary to the doctrine laid down in the case.
Once the law takes full effect, Uber and Lyft will be forced to provide their drivers with a set minimum wage, sick leave incentives, reimbursements, and overtime compensation. Other independent contractors like Postmates and Instacart have also spent over $110 million in support of Proposition 22, a 2020 ballot measure to keep California Drivers as contractors will providing the added benefits.