Things Aren't Looking Good for Uber in California

Illustration for article titled Things Arent Looking Good for Uber in California
Photo: SAJJAD HUSSAIN (Getty)

California has been the legal beachhead of labor’s fight against gig work platforms, and unsurprisingly, Uber, Postmates, and other similar companies have done everything in their power to challenge having to reclassify their contract workforces as employees. But a ruling today in the state’s Central District Court suggests they may be headed for failure.

Advertisement

What makes California such a battleground—beyond being the home state of so many of these companies—is the passage of AB5. The law sets in stone a much stricter definition for what constitutes an independent contractor as opposed to an employee, which would put Uber and its ilk on the hook for basic job protections like overtime pay and healthcare. After passing the state legislature last September, AB5 came into effect on January 1. Uber and Postmates almost immediately filed a request for an injunction.

Today, Judge Dolly Gee, who is presiding over the case (Lydia Olson, et al. v. State of California, et al) denied the motion.

Advertisement

While the ruling has no immediate impact on gig workers for better or ill, “the denial of the injunction confirms what we have long known: the arguments that Uber & Postmates are making to avoid having to comply with basic employment laws are not likely to be successful,” Veena Dubal, an associate professor of law at the University of California, Hastings, wrote to Gizmodo.

In her denial, Judge Gee details why the injunction is unnecessary, citing that AB5 does not specifically target gig work companies in particular, nor does it prevent contractors from doing whatever kind of work they want to do. Most convincingly, Judge Gee upends Uber’s have-it-both-ways strategy of arguing (publicly) that the new standard under AB5 would not be applicable to its drivers while (privately, in court) claiming such a law impairs their existing contracts with those drivers.

“Judge Gee clearly saw the potentially devastating impact blocking enforcement of AB 5 would have on Rideshare drivers and app-based workers all across California,” Chris Chandler, driver-organizer with grassroots group Rideshare Drivers United (RDU), wrote to Gizmodo. “This is a sign of affirmation from the Court, that RDU is on the right side of history when it comes to AB 5 and Uber needs to step up and start following the law.”

The California Labor Federation, a coalition of more than 1,200 unions, agreed: “We applaud today’s decision to deny Uber and Postmates’ legal ploy to continue evading California law under AB 5. We call on these gig companies to follow the law immediately by recognizing its drivers as employees and providing those drivers with the basic protections they’ve long been denied,” the organization said in a statement sent to Gizmodo.

Advertisement

The ruling portends a difficult fight for gig work companies, not just legally, but in their efforts to drum up support from their own non-employees. These companies have attempted to draw a false correlation between contractor status and work flexibility, with the hopes the loss of such flexibility might convince app-based workers in California to oppose AB5. But hidden within today’s ruling, Judge Gee states that “evidence submitted by Plaintiffs indicates that according to academic studies, ‘a majority of workers do not value scheduling flexibility’ and only a ‘substantial share’—by inference, less than a majority—‘are willing to give up a large share of their earnings to avoid employer discretion in setting hours.’” Gee added that “of the 395,000 or more drivers for Uber and/or Postmates, a majority may favor—or at least be neutral to—the application of AB 5 to their worker classification.”

Uber, naturally, is taking things rather hard. “State legislators had the opportunity to expand benefits for hundreds of thousands of independent workers in California, a step Uber has been advocating for and one that other states already have taken. Instead, they passed AB5 using a biased and overtly political process that ignored the voices of the workers most affected by the law and granted preferential treatment to an arbitrary group of industries,” an Uber spokesperson wrote. “We are joining a growing group of companies and individuals suing to ensure that all workers are equally protected under the law and can freely choose the way they want to work.” 

Advertisement

Uber, Lyft, Postmates, and others have thus far helped fund affiliate groups, the I’m Independent and Protect App-Based Drivers and Services coalitions. Beyond organizing counter-protests and paying for media pushback, the companies intend to challenge AB5 via a state ballot measure this November, which they hope will repeal the law entirely.

Postmates called the ruling a “disappointment” and stressed that they have the option to appeal. In a breathless statement, the company added: “As witnessed by truckers, freelance journalists, and countless other occupations, AB5 is undercutting workers across the economy, and Postmates remains committed to the modernization of worker classification and worker protections and sees our ballot conversation with voters, our legal conversation with drivers, and our continued outreach to all stakeholders as critical pieces to an enduring pro-worker, pro-innovation solution that preserves the flexibility and autonomy of California workers while adding meaningful benefits.”

Advertisement

“It’s wrong to have thousands of drivers on the streets every day who can’t afford to see a doctor, or put food on the table,” Shona Clarkson, a Gig Workers Rising organizer, wrote. “We’re calling on our enforcement agencies to force Uber to obey the law. Drivers won’t stop organizing until they get living wages, benefits and a voice at work.”

Senior reporter. Tech + labor /// bgmwrites@gmail.com Keybase: keybase.io/bryangm Securedrop: http://gmg7jl25ony5g7ws.onion/

Share This Story

Get our newsletter

DISCUSSION

i feel like this all could have been avoided if uber and lyft and postmates and the rest simply charged the customer and paid the contractor just a little bit more for their services instead of undercutting the competition in an effort to gain market share.

my historic rideshare expenses +30-50% is still far better than any traditional experience.