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Uber, Lyft lose call on California driver status

2020-10-23T02:39:52.145Z

A California appeals court ruled Thursday that Uber and Lyft did violate state law to force them to re-qualify their drivers as employees, but the two companies are on hold until voters have voted on their alternative proposal on November 3. This hearing is part of a legal standoff between the two chauffeur-driven car reservation platforms (VTC) and California, which seeks to apply the “AB5” law



A California appeals court ruled Thursday that Uber and Lyft did violate state law to force them to re-qualify their drivers as employees, but the two companies are on hold until voters have voted on their alternative proposal on November 3.

This hearing is part of a legal standoff between the two chauffeur-driven car reservation platforms (VTC) and California, which seeks to apply the “AB5” law on the status of self-employed workers, which came into force in January.

Read also: Lyft cuts 17% of its workforce to deal with the coronavirus

This intimate text for companies in the "gig economy" (task-based economy) to consider their self-employed workers as employees, which Lyft and Uber categorically refuse.

In August, the most populous and wealthiest state in the United States had secured the court ordering the two companies to reclassify drivers as employees by a deadline.

This date was then postponed, the time to resolve the ongoing legal battle, crucial for the model of the "gig economy".

Referendum on November 3

On October 13, Uber's lawyer, Theodore Boutrous, again argued that the company was

"not a recruiting entity"

or

"a transport company"

but a

"multidimensional platform that connects passengers and drivers. "

Matthew Goldberg, who defends the state of California and the cities of San Francisco, Los Angeles and San Diego, retorted that the drivers were being wronged because they currently cannot claim many social protections, such as the minimum wage, reimbursement of professional expenses or family leave.

The appeals court ruled in favor of California on Thursday, but the ruling does not take effect immediately.

The parties are awaiting the outcome of a referendum, scheduled for November 3 at the same time as the US presidential election.

Uber and Lyft spent tens of millions of dollars to organize the poll and call on the citizens of the state to support their “Proposition 22,” a compromise that would guarantee flexibility and certain benefits to self-employed drivers.

Both companies can also appeal to a superior court.

Source: lefigaro

All business articles on 2020-10-23

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