A PYMNTS Company

US: Uber, Lyft challenge California gig worker law

 |  October 30, 2019

Uber, Lyft and DoorDash are backing a ballot initiative to exempt themselves from California’s landmark law that re-classifies gig economy workers as employees, the companies announced in a press release on Tuesday (Oct. 29).

The ballot measure, Protect App-Based Drivers & Services Act, includes a guarantee that drivers would make 20 percent above minimum wage and get 30 cents per mile. It also proposes an ACA-comparable healthcare subsidy and accident insurance.

“I do rideshare because the flexibility is phenomenal and it allows me to be there for my family while making extra money to supplement my retirement income from the Navy,” Lyft driver Llewellyn Holloway said in the release. “I’m supporting the ballot initiative because it’s going to allow me to keep my flexibility, and that’s the most important thing to me. For all the people who think we’re better off as employees, they’re wrong, they’re dead wrong.”

Critics, however, counter that the promise of earning more than minimum wage doesn’t cover the time drivers spend between trips.

“Their wage floor suggests if If I’m a cashier, I’m only paid while there’s a customer in my line, not when I’m waiting for the next customer,” California Assemblywoman Lorena Gonzalez, who introduced the state legislation, told CNN. Further, she said the proposed mileage reimbursement is about half of the IRS rate of 58 cents per mile.

The group will need to amass more than half a million signatures to get the initiative on the statewide ballot in November 2020. The new law known as AB-5 is set to go into effect on Jan. 1, 2020.

“This measure is another brazen attempt by some of the richest corporations in California to avoid playing by the same rule as all other law-abiding companies,” the California Labor Federation said in a statement. “California unions will join drivers who want fair wages, better treatment and flexibility to defeat this corporate ploy.”

Uber, Lyft and DoorDash said they are planning to spend $90 million to bolster this ballot initiative. Uber is going a step further and has pledged it will litigate misclassification claims from drivers.

Full Content: PYMNTS

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.