California persists and signs. Several months after the passing of the bill AB-5, that aims to transform the decision of the supreme Court of California in law to better protect workers and independent, which was ratified in September, the State was again seen as the drivers of VTC, working with platforms such as Uber or Lyft should be considered as employees of these groups, and not independent.
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In a document dated 9 June, and which covers a range of topics, the California Public Utilities Commission, responsible for regulating several sectors such as “private companies of electricity, natural gas, telecommunications, water, railroad, rail transit, and passenger transportation”, it takes a position. She confirms that “for the moment, the drivers of transport companies should be considered as employees”, not independent, and that their employer must take this decision into account, granting them all the benefits related to this status.
To justify this decision, the California Public Utilities Commission relies on the law AB-5. Carried by the elected democrat Lorena Gonzalez, it proposes that the court use a test called the “ABC” to determine if a self-employed worker must be regarded as an employee of the company making use of its services. According to this law, an independent must (A) be free from the control of the company, in his contract as in effect, (B) perform work that is not essential to the activity of the company, and (C) to exercise usually a profession or independent activity, of the same nature as the work performed. If these three conditions are not met, the worker may request to be considered an employee of the company and enjoy the benefits associated with this status.
Supported by the authorities in california, this text did not result in a requalification automatic and massive in the State. “For the moment, the law is applied, but the application for reclassification must first be initiated by the driver, and then the judge decides depending on the situation, if it is a relationship of wage-labor or not”, it was explained in the entourage of Uber. In other words, the change is far from obvious.
repeated opposition of the giants of the VTC to change
The opposition of the titans of the VTC to this act AB-5 is known for a long time. It must be said that its consequences are numerous : Barclays bank has calculated that a requalification of the statutes in California would cost to Uber and Lyft about 3625 dollars extra per driver, or $ 508 million per year for Uber, and a little less than $ 300 million for Lyft.
the king of The VTC also noted the serious consequences of a requalification of mass on the job : “if the regulator california requires corporations to carpool to change their business model, our ability to provide reliable and economic, will be compromised, which will have a significant negative impact on a source of employment essential for Californians,” responded Uber this Thursday. In a study cited by the company on NBC News, it is written that the reclassification by employee would result in a massive reduction in the number of drivers VTC in California, with the key being the removal of “hundreds of thousands of jobs.” For its part, Lyft has simply considered that the findings of the institution of california were “wrong”.
These firms are leading a fight against a possible redevelopment, which would endanger the heart of their economic model. In December, Uber partnered with the start-up Postmates and two individuals, Lydia Olson, and Miguel Perez, launching a legal action against the State of California to declare AB5 “invalid”. Also, Uber, Lyft and the driver home DoorDash are partners in a lobbying effort supporting a proposed law, the “Protect the App-based Drivers & Services Act”, which must be submitted to the vote of Californians in November 2020. It is presented as a response to AB5. It “protects the flexibility of workers, improves the quality of the work at the request by establishing new safeguards historical revenues and benefits and protects the public safety and consumer choice”. A text that aims, therefore, to avoid reclassification as employees, while ensuring to strengthen the rights of self-employed workers in exchange.
But the vise tightens around the companies of the sharing economy. In may, the attorney general of California has sued Uber and its american competitor Lyft, accusing them of looking into their drivers as independent workers and not employees. At the beginning of June, the regulator of california has formally reminded all of the companies involved – including platforms VTC – their obligation to provide their employees with “a certificate of worker’s compensation issued by an authorized insurer or a certificate of consent to self-insurance” by July 1, under the laws of the State. Otherwise, it may “suspend, cancel or withdraw” the licensing of these companies.
financial markets are closely monitoring the evolution of this legal battle : the action Lyft lost more than 5.7% and the Uber dropped more than 7% on Thursday at noon, New York time.
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