California Attorney General Xavier Becerra and city attorneys from San Diego, San Francisco and Los Angeles sued Uber and Lyft in May for violating California's new law, Assembly Bill 5 (AB5). This law was intended to force gig economy companies to classify their workers as employees and therefore force them to offer benefits such as health insurance to those workers.
Both companies plan to file appeals in the 10-day window granted in the ruling. However, if this decision portends future legal losses for Uber and Lyft, the rideshare giants could be in a load of trouble. Demand for ride-hailing services is already down due to the ongoing COVID-19 pandemic. The lawsuit alone could result in hundreds of millions of dollars in civil penalties aside from a requirement to pay restitution to drivers affected by the alleged misclassification. Furthermore, other states looking to enact similar measures to AB5 may see this as an opportunity to adopt their own gig economy restrictions.
Uber and Lyft will also be back in court in California as California's Labor Commissioner filed filed lawsuits alleging that the companies engaged in wage theft by misclassifying drivers as independent contractors. The lawsuits seek to recover wages allegedly owed to drivers that those drivers would have earned had they been considered employees.
https://www.thedrive.com/news/35584/california-judge-rules-uber-and-lyft-must-classify-drivers-as-employees
Both companies plan to file appeals in the 10-day window granted in the ruling. However, if this decision portends future legal losses for Uber and Lyft, the rideshare giants could be in a load of trouble. Demand for ride-hailing services is already down due to the ongoing COVID-19 pandemic. The lawsuit alone could result in hundreds of millions of dollars in civil penalties aside from a requirement to pay restitution to drivers affected by the alleged misclassification. Furthermore, other states looking to enact similar measures to AB5 may see this as an opportunity to adopt their own gig economy restrictions.
Uber and Lyft will also be back in court in California as California's Labor Commissioner filed filed lawsuits alleging that the companies engaged in wage theft by misclassifying drivers as independent contractors. The lawsuits seek to recover wages allegedly owed to drivers that those drivers would have earned had they been considered employees.
https://www.thedrive.com/news/35584/california-judge-rules-uber-and-lyft-must-classify-drivers-as-employees
About bloody time....
ReplyDelete