California persists and signs. Several months after the passage of Law AB-5, which aims to transform a decision of the Supreme Court of California into law to better protect the self-employed and which was ratified in September, the state again considered that the drivers of VTC collaborating with platforms like Uber or Lyft should be considered as employees of these groups, and not freelancers.
Read also: Will California bring down the uberization of the economy?
In a document dated June 9 and which covers several subjects, the California Public Utilities Commission, responsible for regulating several sectors such as "private companies of electricity, natural gas, telecommunications, water, railways, rail and passenger transport ”, takes position. It confirms that " for the time being, drivers of transport companies must be considered as employees ", not self-employed, and that their employer must take this decision into account, by granting them all the advantages linked to this status.
To justify this decision, the California Public Utilities Commission relies on law AB-5. Worn by the elected democrat Lorena Gonzalez, this one proposes to justice to use a test known as “ ABC ” to determine if a self-employed worker should be regarded as an employee of the company calling upon its services. According to this law, a self-employed person must (A) be free from the control of the company, in his contract as in fact, (B) carry out work which is not essential to the activity of the company, and (C) usually exercise a profession or an independent activity, of the same nature as the work performed. If these three conditions are not met, the worker can request to be considered as an employee of the company and benefit from the advantages associated with this status.
Supported by the California authorities, this text did not lead to automatic and massive requalification in the state. " For the moment, the law is applied, but the request for requalification must first be launched by the driver, then the judge decides according to the situations if it is an employment relationship or not ", was explained in the entourage of Uber. In other words, the change is far from being obvious.
The repeated opposition of giants of hybrid bikes to this change
The opposition of VTC titans to this AB-5 law has been known for a long time. It must be said that its consequences are numerous: the Barclays bank calculated that a reclassification of the statutes in California would cost Uber and Lyft approximately 3625 additional dollars per driver, that is to say 508 million dollars per year for Uber and a little less than 300 million dollars for Lyft.
The king of hybrid bikes also points out the heavy consequences that a mass requalification would have on employment: " if the Californian regulator obliges car-sharing companies to change their business model, our ability to provide reliable and economical services will be compromised, which will have significant negative consequences on an essential source of employment for Californians , reacted Uber this Thursday. In a study cited by the company on NBC News, it is notably written that the re-qualification in employee would involve a massive reduction in the number of VTC drivers in California, with in the key the elimination of " hundreds of thousands of jobs ". For his part, Lyft simply considered that the conclusions of the Californian institution were " wrong ".
These firms are fighting a possible re-qualification, which would endanger the heart of their economic model. In December, Uber partnered with the start-up Postmates and two individuals, Lydia Olson and Miguel Perez, to launch legal action against the state of California to declare AB5 " invalid ". Likewise, Uber, Lyft and the home delivery company DoorDash have joined forces in a lobbying action supporting a bill, the “ Protect App-based Drivers & Services Act ”, which must be voted on by Californians in November 2020. That -this is presented as a response to AB5. It " protects the flexibility of workers, improves the quality of work on demand by establishing new historic guarantees of income and benefits and protects public safety and consumer choice ". A text which therefore aims to avoid re-qualification as employees, while ensuring that the rights of the self-employed in exchange are strengthened.
But the noose is tightening around companies in the sharing economy. In May, the California attorney general sued Uber and its American competitor Lyft, accusing them of considering their drivers to be self-employed and not employees. In early June, the Californian regulator formally reminded all the companies concerned - including VTC platforms - of their obligation to provide their employees with “ a workers' compensation certificate issued by a licensed insurer or a certificate of consent to the 'self insurance ' by July 1, under state laws. Otherwise, the latter could " suspend, cancel or withdraw " the authorization to practice of these companies.
The financial markets are closely monitoring the development of this legal battle: the Lyft share lost more than 5.7% and that of Uber fell by more than 7% this Thursday at noon New York time.