Califonia’s attorney general, along with city attorneys from San Diego, San Francisco, and other cities filed a lawsuit against Uber and Lyft for allegedly classifying “drivers as independent contractors in violation of a state law that makes them employees.”
Assembly Bill 5 (AB5), like any law, sounds like good intentions but has horrible consequences on the “gig” economy. It demands that private businesses classify “workers as employees instead of contractors if they control how workers perform tasks or if the work is a routine part of a company’s business.”
A company can get around the requirements if it passes the ABC test, which determines if a worker is a contractor or employee.
Uber and Lyft have countered any allegations against them because “their drivers have independence and decide when to work.” But the lawsuit insists the “companies exert enough control over drivers to make them employees:”
“Uber and Lyft are traditional employers of these misclassified employees. They hire and fire them. They control which drivers have access to which possible assignments,” the lawsuit says. “Uber and Lyft are transportation companies in the business of selling rides to customers, and their drivers are the employees who provide the rides they sell.”
California Attorney General Xavier Becerra defended his choice because the “innovation” behind Uber and Lyft “doesn’t require these companies to mistreat their workers.”
I guess Becerra thinks those who sign up as Uber and Lyft drivers do not know what they’re getting themselves into? I guess not:
The state, which seeks up to millions of dollars in civil penalties and to force the companies by court order to reclassify drivers and restore what it called unpaid wages, also said Uber and Lyft haven’t contributed state payroll taxes used to fund general health welfare programs. The lawsuit was filed with the city attorneys of San Francisco, where Uber and Lyft are based, and Los Angeles and San Diego.
A Lyft spokeswoman stated the company is “looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable health care and other benefits is more important than ever.”
The Uber spokesman provided a harsher statement: “At a time when California’s economy is in crisis with four million people out of work, we need to make it easier, not harder, for people to quickly start earning.”
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