AB5 and UBER

Uber_logo_2018This past summer the State Supreme Court drummed in again to Uber & Lyft that ride-share companies like themselves must be in compliance of CA State Law AB 5, meaning that they must classify their drivers as employees.

Uber and Lyft are the largest ride-share companies that use app-platform technologies to conduct business. In fact, as noted by the San Francisco Chronicle, Uber is proceeding to buy Postmates, a food delivery app that is similar to DoorDash and GrubHub for over $2 billion in stocks.

Some experts note that Uber and such companies have been able to operate and be very profitable in what some refer to as a “gray area.”

Uber contends that because the relationship with workers is that of an independent contractor or vendor, (who typically work part time) they are not obligated to classify them as employees.

Litigation against Uber and Lyft (among others) have multiplied due to the fact that all operating costs are on the driver-worker and Uber/Lyft takes 20 to 25 percent of the drivers fare-earnings.

Placing the hardships of Coronavirus aside, countless drivers were putting in full time hours and still were not classified or treated as employees.

As Uber’s net revenue is over $10 billion, in lawmakers eyes this is unfair and exploitation.

U.S. District Court Central District of California, Judge Dolly Gee presided over the Federal case, brought against Uber.  She maintained that the ride-share companies must comply to AB5. But she did give Lyft/Uber time to amend their complaint by Oct. 9.

Reps speaking on behalf of Lyft said that they view the AB5 State law as “irrational…and unconstitutional.” Lyft plans to amend and appeal.

Meanwhile, the issue between companies like Uber and Lyft meeting compliance for California State labor law AB5 will be on this November ballot for California voters to decide via Prop 22.

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