In a ruling Monday, the 17th of August 2020, a California superior court judge, Ethan Schulman, said Lyft and Uber should reclassify their workers as employees and not independent contractors. This California’s gig economy law makes it harder for these companies to hire workers as contractors. The ruling even comes during difficult times where we are facing the pandemic and business is down as people remain indoors, trying to stay safe by maintaining social distance.
The ruling means that the drivers should be given the same benefits and protection as other employees in those ride-hailing companies. The drivers will get health insurance, workers’ compensation, and paid sick and family leave. The judge said that the two companies have refused to comply with the law known as AB5 that was passed last year. To determine whether you’re an employee or an independent worker, the government uses the ABC test where the default status of a worker is as an employee unless they can meet the specified guidelines. The companies are hoping that another judge may rule on their side in their appeal.
Even though the drivers will enjoy those employee benefits, to some, being independent as your own boss is much better. The drivers get to work when they want and how they want. They can dress how they want to, go on vacation whenever they feel like, or turn down work at their convenience. In short, they had much more control over themselves. Uber and Lyft are now advocating for the drivers’ independence.
Over the coronavirus pandemic period, a lot has changed in the economy. Businesses have closed and some are forced to lay off workers to keep themselves running. According to Forbes, in February this year, Uber announced that it will lay off 35,000 workers due to the decreased number of rides. Uber is now making more money delivering food through Uber Eats than it is from ride-hailing. In April this year, Lyft also tightened its belt by laying off 17% of its workers. MarketWatch reports that California holds more than 10% of each company’s gross bookings. Both companies have their fingers crossed as they await the ruling after their appeal.
What do you think of California’s ruling against Uber and Lyft? Let us know down in the comments.
This article originally published on GREY Journal.