Uber

Uber and Lyft Lobby California Appeals Court to Keep Drivers as Contractors

(AP Photo/Richard Vogel, File)

SAN FRANCISCO (CN) — Arguing before a state appeals court Tuesday, Uber and Lyft lawyers predicted fewer rides for consumers, lower earnings for drivers and a spike in drunk-driving accidents if they are forced to classify California drivers as employees instead of contractors.

“I don’t want the court to think that if the injunction is affirmed, that these people will continue to have these earning opportunities because they won’t,” Lyft attorney Rohit Singla said.

Uber and Lyft want California’s First Appellate District to overturn a lower court’s Aug. 10 preliminary injunction requiring them to start classifying drivers as employees. The injunction was stayed pending appeal on Aug. 20.

Joined by the cities of Los Angeles, San Francisco and San Diego, California Attorney General Xavier Becerra sued Uber and Lyft in May, accusing them of violating Assembly Bill 5 by misclassifying drivers as independent contractors and denying them employment benefits, such as minimum wage, overtime and unemployment insurance. AB 5 went into effect this past January.

If forced to comply with the law, Uber and Lyft say they could no longer let drivers choose their own working hours. Government lawyers say nothing in AB 5 prevents the tech giants from offering flexible schedules.

During a two-hour telephonic hearing before a three-judge panel, Singla said classifying drivers as employees would drastically change his client’s business model and make scheduling flexibility impossible.

He compared Lyft drivers to the state of California 235,000-person workforce of government employees.

“Do they have employees that can work whenever they want, stop working for a month or two,” Singla asked. “No employer can do that, have employees working as long as they want whenever they want.”

Both Uber and Lyft insist they are not “hiring entities” subject to the labor law but rather providers

Continue Reading

Uber and Lyft faced tough questions from California judges as they seek to keep classifying drivers as contractors



Dara Khosrowshahi, Logan Green are posing for a picture: Uber CEO Dara Khosrowshahi and Lyft CEO Logan Green Laura Buckman/Reuters; Carlo Allegri/Reuters


© Provided by Business Insider
Uber CEO Dara Khosrowshahi and Lyft CEO Logan Green Laura Buckman/Reuters; Carlo Allegri/Reuters

  • A California appeals court heard arguments on Tuesday from Uber and Lyft as they appeal a recent ruling that would force the companies to reclassify drivers as employees.
  • A lower court determined in August that Uber and Lyft drivers are employees, not contractors, under the state’s gig work law, AB-5, but delayed enforcing the ruling while the companies appeal it.
  • Uber, Lyft, and other gig companies have fought AB-5 aggressively, pouring more than $180 million into a ballot measure aimed at California voters that would permanently exempt them from the law.
  • The companies argue reclassifying drivers as employees will reduce their flexibility, while proponents of AB-5 say Uber and Lyft’s business models rely on underpaying drivers and skirting labor laws. 
  • Visit Business Insider’s homepage for more stories.

A California appeals court heard oral arguments Tuesday from Uber, Lyft, and the state over whether a lower court reached the right conclusion in August when it ruled that the companies’ drivers are employees under the state’s gig work law, AB-5.

Loading...

Load Error

Judges from California’s first district Court of Appeal pressed lawyers for Uber and Lyft over drivers’ wages and autonomy, and questioned the companies’ arguments that AB-5 would require them to reduce drivers’ flexibility, according to The Washington Post and The New York Times reporter Kate Conger.

The judges also asked a lawyer for the state about potential harms to Uber and Lyft and drivers’ preferences around their employment status, according to reports.

The landmark case could fundamentally alter the contractor-based business model that Uber and Lyft have relied on, and the companies are aggressively fighting the law in court and via a ballot measure that California voters will decide on in

Continue Reading

Uber Seeks Staff Support for Proposal on Drivers as Contractors

Uber app

Photographer: David Paul Morris/Bloomberg

Ride-hailing giant Uber Technologies Inc. outlined ways staff can support a state measure that would designate drivers as contractors rather than full-time employees, seeking additional backing for a controversial initiative that labor unions and at least one in-house engineer have publicly opposed.

In a companywide email Friday obtained by Bloomberg, Uber’s head of global public policy Justin Kintz said data “show a tight race” to pass California’s Proposition 22, a measure written and funded by Uber, Lyft Inc. and other gig companies that would replace an earlier law designed to treat drivers as employees. Kintz’s email, which includes links to talking points from the Yes on 22 campaign, also suggests ways employees can get involved, including joining a texting bank, and links to a sample email staffers can send to family and friends. Uber will have a special Town Hall-type meeting Oct. 15 to discuss the ballot initiative, featuring several drivers who support it, the email said.

Kintz’s missive highlights the urgency of Uber’s campaign to garner support just weeks before the election for a measure that opponents say will deny drivers crucial benefits. Uber engineer Kurt Nelson came out against the proposition on tech blog TechCrunch this week to flag what he considers overlooked aspects of the measure and encourage workers to do their own research.

Uber’s encouragement of activism contrasts with the mood at some other Silicon Valley companies, including cryptocurrency startup Coinbase Inc., which has banned politicking. Calling it a distraction, Chief Executive Brian Armstrong outlined the prohibition last week and followed up with a severance package offer to any employee who disagreed. About 5% of employees took the package and resigned. Alphabet Inc.’s Google last year posted internal rules that discourage employees from debating politics, telling workers not

Continue Reading

The $185 million campaign to keep Uber and Lyft drivers as contractors in California

At first, Uber and Lyft driver Michael Richert was undecided about how he would vote on Proposition 22, a California ballot initiative sponsored by gig economy giants Uber, Lyft, DoorDash, Instacart and Uber-owned Postmates that comes up for a vote in November.

Then, he found out how much they were spending to get it passed: over $185 million, according to California Secretary of State records. Richert said he was “blown away” by the amount, and started looking into what’s really at stake for him and other drivers.

The amount of financing behind the ballot measure — the most expensive proposition in the state’s history according to Ballotpedia — underscores how important its passage is to the future of the businesses.

The companies have built up massive fleets of workers over the years by treating them as independent contractors, who are paid on a gig-by-gig basis. But a new law which went into effect this year in California, threw a wrench into the model.

So, gig companies are fighting back with Proposition 22, the App-Based Drivers as Contractors and Labor Policies Initiative. If it passes, ride-hail and delivery drivers would continue to be treated as independent contractors with some benefit concessions granted by the proposition. If it doesn’t pass, these workers would likely be considered employees who are entitled to a minimum wage, overtime pay, workers’ compensation, unemployment insurance and paid sick leave.

Richert, who is based in Southern California, said that, while he hasn’t driven since the onset of the pandemic for fear of contracting the coronavirus, he frequently checks the apps when there’s messaging about the importance of passing Proposition 22, or Prop 22 as it’s commonly called. When he flips on the television, he sees ads sponsored by the campaign touting the flexibility of the job, a perk

Continue Reading