Uber under pressure from drivers and prosecutors in California
California’s top prosecutor has taken his most aggressive step yet in his attempt to force Uber and other gig economy companies to treat their workers as employees.
State Atty. Gen. Xavier Becerra, backed by city attorneys in San Francisco, Los Angeles and San Diego, on Wednesday filed a request for a preliminary injunction in their lawsuit against the gig companies.
If granted, it would mean the companies must reclassify their workers in a matter of weeks.
The motion will be discussed at a hearing set for Aug. 6.
The request came as about 50 Uber drivers in San Francisco blocked the street outside the home of the company’s chief executive, Dara Khosrowshahi, demanding employee benefits and better provisions for protective equipment during the COVID-19 pandemic.
“I’ve got a 90-year-old mother and a wife who has cancer,” said Vernon, a 73-year-old driver, who attended the protest and would only give his first name. “I need money.”
Drivers said the impact of COVID-19 had pushed them to the financial brink, unable to meet rent or mortgage obligations. Organizers said recent pledges by Khosrowshahi to support the Black Lives Matters movement were disingenuous, given that so many of the company’s drivers, many of them from minority backgrounds, were not being treated “with dignity and respect.”
“I’ve come here to protest an injustice,” said Alex, 56, who also would only give his first name. “This company has become[very] rich on the hands of workers.”
The dramatic drop in ride-hailing due to coronavirus lockdowns has brought the issue of gig workers’ rights to the forefront of Californian politics, where most of the largest companies are based.
A new law, California Assembly Bill 5, or AB 5, came into force at the beginning of the year. It codified a Supreme Court ruling that set out criteria for treating workers as employees rather than independent contractors. The law is now being used to take the gig economy companies to court.
Uber warned that an injunction would immediately put more than 150,000 of its drivers in California out of work, and would result in price increases of 25% and 111%, with less densely populated areas most affected.
“The vast majority of drivers want to work independently,” the company said in a statement Wednesday.
“We’ve already made significant changes to our app to ensure that remains the case under California law. When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry.”
Lyft, Uber’s biggest competitor in the U.S., said: “If the courts were to grant the attorney general’s request, it would have a devastating effect on millions of Californians at the worst possible time.”
It added: “We believe the courts should let the voters decide.”
Uber, Lyft and a handful of similar companies have thrown more than $100 million behind a proposed a new ballot measure, to be voted on in November, that would in effect make workers for app-based services exempt from AB 5. The coalition maintains that their alternative measure would provide workers some protections, such as a minimum earnings level.
© The Financial Times Ltd. 2020. All rights reserved. FT and Financial Times are trademarks of the Financial Times Ltd. Not to be redistributed, copied or modified in any way.