Thursday, 20 August 2020 19:19

A CA Judge Ruled Uber and Lyft Must Classify Drivers as Employees. What Does That Mean for DoorDash and Instacart?

Written by H. Claire Brown, The Counter


It’s been seven months since California’s Assembly Bill 5---the law that was intended to force companies to reclassify gig workers as employees---went into effect.

But instead of triggering a sea change in the way tech companies treat their workers, the legislation has been largely ignored by the biggest players in the industry. 


That may be about to change. 


The result of a 2018 state Supreme Court ruling, AB5 established a test to determine whether a worker should be classified as an independent contractor or as an employee.


Employees enjoy a host of benefits not available to contractors, including health insurance, minimum wage, the right to form a union and sick pay.


Companies like Uber, Lyft and DoorDash have long classified their workforce as independent contractors, a policy which saves them a lot of money but deprives workers of the most basic benefits. When the law first went into effect Jan. 1, the platforms simply refused to comply, claiming drivers and delivery couriers were not central to their business. 


But on Aug. 10, a Superior Court judge put a stop to that claim in a decision that will require Uber and Lyft to reclassify their workers as employees within 10 days. The companies have both said they plan to appeal the ruling.


Uber went a step further Aug. 12, threatening to shut down service in the state of California until November, when voters will decide on a ballot initiative backed by Uber, Lyft and DoorDash to exempt ride-sharing apps from AB5. 


Despite all the bluster, it appears the ride-sharing companies may finally have to reclassify their workers---in California, at least.


“In the judge’s view, and in my view also, they are unlikely to succeed on appeal,” said William Gould, professor emeritus at Stanford Law School and former chairman of the National Labor Relations Board

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