Judge Throws Out Bid By Uber, Postmates To Halt Gig Worker Law

A judge has rejected the request from Uber and Postmates to put a stop to a new California law that would place new restrictions on gig economy workers, according to Reuters. The rule, passed last year, places more specific restrictions on who can be classified as a contractor.

Los Angeles Judge Dolly Gee said the bill’s benefits to the public outweighed any inconveniences to companies like Uber or others like it that rely heavily on gig economy and part-time labor. In a 24-page decision, Gee said that although the companies had proven they might indeed suffer harm as a result of the law, the benefits — such as providing for the rights of citizens to have a living wage and benefits — were more important to uphold.

The lawsuit from Uber and Postmates is still in effect, though, and Gee did not make any decision on the merits of the case. She simply refused to outright dismiss the law as a whole.

Postmates said it understood that Gee’s decision was procedural, and would continue to pursue the lawsuit. The company believes it has merits on its own, and added that it would consider an appeal and other legal options.

Uber said it was looking over the judge’s opinion, and would make a decision on its next moves. The popular ridesharing company believes the California law is “biased” and “overly political,” favoring only certain industries with preferential treatment. In the lawsuit from last year, Uber said the law tended to single out technologically based platforms like its own, calling the bill unfair.

The California law took effect Jan. 1 of this year. Companies in violation of the law will face criminal penalties, though that hasn’t happened to date, as of this week.

Alongside Uber and Postmates, the bill targets gig economy companies such as Lyft, DoorDash and others — which utilize California’s massive base of contract workers, rather than employ them full-time, for deliveries and other similar things. Uber, Lyft and DoorDash have amassed $90 million for an initiative to exempt them from the law at the next state election this year.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.