Gig Economy

California Attorney General Says Uber, Lyft's Tradeoff Between Flexibility And Benefits A 'False Choice'

The California judge who ruled that Uber and Lyft have to classify their workers as employees reportedly "saw straight through" the "bogus argument" that the companies' workers like being classified as independent contractors instead.

CNBC reported that California Attorney General Xavier Becerra, speaking on the “Squawk Alley” program on Tuesday (Aug. 11), agreed with the judge's decision, which mandated that Uber and Lyft had to reclassify their workers as employees, with benefits as required, within 10 days.

The argument from Uber and Lyft on why they classify their workers as independent contractors is that the employees enjoy the freedom of a nontraditional, gig economy work schedule. Becerra called that a "false choice."

“What worker doesn’t want to have access to paid sick leave?” Becerra said, according to CNBC. “What worker doesn’t want to have unemployment insurance at a time of COVID-19 crisis? What worker doesn’t want to know that they’ll get paid for overtime if they work 60 hours in a week or 12 hours in a day?”

He said workers "don't have to give up those rights and those benefits to have flexibility."

"There’s nothing in California law that requires a company to remove flexibility in order for these people to be classified as employees and get those rights," he said, CNBC reported.

The issue at hand was that, according to Becerra, Uber and Lyft had violated the rules of Assembly Bill 5 (AB5), which laid down new rules for gig economy companies on how they had to classify workers. Both companies have said they plan to appeal the judge's ruling.

Uber CEO Dara Khosrowshahi, however, argued in a New York Times editorial for something of a compromise, in which workers would get benefits but still be classified as independent contractors. Khosrowshahi said it would be a mistake to change the classification to employee, though, arguing it would remove some of the flexibility and make Uber slash its ridesharing program.

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