Judge blocks Uber, Lyft from classifying drivers as contractors in California

Daniel Fowler
August 11, 2020

The campaign for Proposition 22, a proposed ballot initiative sponsored by Uber and Lyft that would allow rideshare drivers to work as independent contractors, decried the ruling.

Ride-hailing companies Uber and Lyft must classify their drivers as employees rather than freelancers, a judge in California has ruled.

Lyft's lawyer argued at an August 6 hearing that the injunction sought by Becerra would wreak havoc on the companies' services and cause "massive harm" to drivers and riders.The city of San Francisco, where both ride-hailing companies are based, joined Becerra's suit and argued drivers have suffered for years as Uber and Lyft had have grown into giants by violating state labor law.

The UK courts ruled in favour of the drivers in 2016 and Uber lost a subsequent appeal in 2018.

"Ultimately, we believe this issue will be decided by California voters and that they will side with drivers", Lyft spokesperson Julie Wood said.

"Uber's argument is a classic example of circular reasoning", he wrote, "because it regards itself as a technology company and considers only tech workers to be its 'employees, ' anybody else is outside the ordinary course of its business, and therefore is not an employee".

The case has seen two former Uber drivers, Yaseen Aslam and James Farrar, claim that by classing drivers as contractors the firm denies them basic rights. Those benefits include a minimum wage, health insurance, paid rest periods, compensation for overtime work, and reimbursement for the cost of driving while working. "Sacramento politicians and special interests keep pushing these disastrous laws and lawsuits that would take away the ability of app-based drivers to choose when and how they work, even though by a 4:1 margin drivers want and need to work independently". But he paused the injunction for 10 days so the companies can appeal his decision.

"It bears emphasis that these harms are not mere abstractions; they represent real harms to real working people", Schulman wrote.

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Jamie Heywood, Uber's regional general manager for Northern and Eastern Europe, said: 'Drivers can determine if, when and where they drive, but can also access free AXA insurance to cover sickness or injury, as well as maternity and paternity payments'.

Both companies cited an independent but unscientific driver survey that found more than 70 per cent of 734 respondents identifying themselves as drivers said they did not want to be classified as employees.

'When over three 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, ' an Uber spokesman said.

Uber and Lyft have suffered substantial losses during the pandemic as rides have almost evaporated, with Uber's bookings declining 75 per cent in the period from April through June.

"Our state and workers shouldn't have to foot the bill when big businesses try to skip out on their responsibilities", California Attorney General Xavier Becerra told The Hill.

After the new state law, known as AB5, was passed, Becerra and city officials in Los Angeles, San Diego and San Francisco sued Uber and Lyft to force the companies to comply.

'This is our final showdown with Uber but the stakes could not be higher, ' Mr Aslam.

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