Judge finally rules that Uber and Lyft drivers are employees — but this is just the beginning
Strap in, this is a bumpy ride
What Uber and Lyft say
In response to the latest injunction, an Uberspokesperson said: “The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law.”
“When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression,” they added. But the thing is, if the drivers were employees they may have been eligible for financial support and insurance during the economic downturn, so that’s beside the point.
What’s more, Uber’s drivers don’t seem to earn enough to make it a viable job, anyway. Additionally, during the coronavirus induced recession, the companymade more than 6,000 people redundantin an attempt to cut loses and consolidate its offices.
In response to the ruling,The New York Times published an op-edfrom Uber’s CEO,Dara Khosrowshahi, this morning, which on the surface seems to contradict the company’s actions up to this point and support what the lawsuit is trying to accomplish.
Khosrowshahi seems keen to improve the working conditions for drivers but only on their terms, rather than being bound by legislation.Ironically, if Uber did defer to legislation when it comes to employee benefits, it would have a lot less flexibility with how it implements them for its drivers.
Veena Dubal, professor of law at the University of California and gig-economy researcher, has been critical of Khosrowshahi’s article. Dubal says that the Uber CEO conflates independent contractors with flexibility. Indeed, you don’t need to keep your workers as contractors in order to offer them freedom to do their job as they see fit.
Lyft largely echoed Uber’s sentiments. “Drivers do not want to be employees, full stop,”a spokesperson for the company said. “We’ll immediately appeal this ruling and continue to fight for their independence,” they added.
So where does this leave us?
There have been a lot of reports in recent months about Uber and Lyft, and their relationship with their contractors-come-employees. So let’s recap.
The companies arebeing sued in Massachusetts for the same misclassification of workersthat it’s facing in California. Regulators in New York recently gave the pair45 days to pay their drivers unemployment benefitsfollowing a drop in rider numbers due to coronavirus lockdowns.
On the other side of the Atlantic in the Netherlands, Uber is fighting allegations thatits algorithm unfairly favors certain driversand penalizes others. In the UK, it’s also being challenged in the Supreme Court over similar concerns that it faces in California —that it should treat its workers as employeesand meet basic standards, like offering minimum wage and paid holiday.
While there’s plenty of other ongoing cases, yesterday’s ruling has certainly drawn a line in the sand, and clarifies how the law interprets Uber and Lyft’s business models in the US. If the injunction holds up over the next 10 days, it could pave the way for other jurisdictions to follow suit and take California’s ruling as a form of precedent.
Ultimately though, it seems that it’s not going to be the courts that decide Uber and Lyft’s fate, it will be public voters.
The two companies, along with food delivery service Door Dash, have put more than $100 million into a campaign to keep gig-workers classified as independent contractors. The campaign, which will be decided by a ballot measure in November’s election, will be voted on by eligible Californian voters.
“Ultimately, we believe this issue will be decided by California voters and that they will side with drivers,” a Lyft spokesperson said.
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Story byMatthew Beedham
Matthew is the editor of SHIFT. He likes electric cars, and other things with wheels, wings, or hulls.Matthew is the editor of SHIFT. He likes electric cars, and other things with wheels, wings, or hulls.
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