California seeks court order against Uber and Lyft, saying the companies violate state labor law
California on Wednesday filed for a court order to require Uber and Lyft to stop classifying workers as independent contractors — a designation that Attorney General Xavier Becerra says illegally deprives drivers of workplace protections.
That motion builds on an earlier lawsuit in which Becerra and the city attorneys for San Francisco, Los Angeles and San Diego alleged that Uber and Lyft are skirting California’s landmark labor law, AB 5, which limits companies’ ability to use independent contractors and requires in most cases that they be treated as employees and provided benefits.
“Misclassifying your workers as ‘consultants’ or ‘independent contractors’ simply means you want your workers or taxpayers to foot the bill for obligations you have as an employer — whether it’s paying a legal wage or overtime, providing sick leave, or providing unemployment insurance,” Becerra said. “That’s not the way to do business in California. We’re seeking a court order to force Uber and Lyft to play by the rules.”
Uber and Lyft are arguing in a federal lawsuit that those rules violate the constitution. In addition to their legal challenge, the companies have poured $110 million into a November ballot measure that would exempt them from the gig worker law.
“We believe the courts should let the voters decide,” Lyft said in response to Wednesday’s filing. “Trying to force drivers to give up their independence 100 days before the election threatens to put a million more people out of work at the worst possible time ... Our ballot measure fixes the Legislature’s mistake, protects millions of Californians who rely on rideshare and on-demand delivery services, independent contractors and small businesses struggling to get through COVID.”
Becerra’s filing is “strong signal” that Uber and Lyft will do anything to boost profits, said President of SEIU California and SEIU Local 721 Bob Schoonover. He urged Californians to vote “no” on the November initiative.
The coalition behind the ballot measure argues that the proposition protects workers. Job losses due to AB 5 could number 900,000 and threaten an industry that has proven critical in the pandemic, Protect App-Based Drivers & Services said in a press release. Drivers overwhelming support the November initiative, the group said on Wednesday, citing a Ride Share Guy survey in which 71 percent of respondents indicated a preference for independent contracting.
On the same day, however, Uber and Lyft drivers caravanned outside Uber CEO Dara Khosrowshahi’s San Francisco home by the dozens to protest the ballot measure and call on the company to provide employee benefits and pay drivers a living wage.
Labor advocacy groups Gig Workers Rising and We Drive Progress organized the demonstration to highlight what they called rideshare companies’ continued exploitation of drivers, many of whom are people of color, and demand that Uber and Lyft drop their ballot measure.
Demonstrators also charged the companies with hypocrisy in the Black Lives Matter movement. Uber and Lyft are among dozens of corporations that have publicly committed to racial justice in recent weeks, but organizers say their words don’t align with their actions.
“What these companies are doing right now amounts to no less than trying to legislate labor theft — trying to pay people less than the value of work,” Gig Workers Rising organizer and Lyft driver Edan Alva told The Sacramento Bee, saying Uber and Lyft prey upon communities of color that are less likely to have the financial means to cover emergency expenses, including costs associated with COVID-19.
“(They) essentially use (people of color’s) economic desperation … to instead of elevate and support these people, to try and squeeze more and more revenue out of them to the point where it gets below minimum wage,” he said. “It’s outrageous, it’s predatory and it’s racist.”
Rideshare drivers nationally average $17.49-$19.73 per hour, according to a Ride Share Guy survey. Several protesters said routine repairs and unexpected costs quickly put drivers’ actual compensation below minimum wage.
Uber and Lyft’s refusal to comply with AB 5 hurts more than just drivers, said San Francisco Supervisor Gordon Mar. By classifying workers as independent contractors rather than employees, he said, the two companies avoided paying $413 million to the state’s unemployment insurance fund between 2014 and 2019, the year AB 5 went into effect.
This story was originally published June 24, 2020 at 4:17 PM.