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