Time’s Up on Uber-Lyft ‘Evil,’ California’s Top Cop Tells Court
California Resists Delay for Uber-Lyft Driver Pay Mandate
(Bloomberg) -- California doubled down on its demand that Uber Technologies Inc. and Lyft Inc. make immediate, wrenching changes to their business models in their home state by converting their drivers from independent contractors to employees with benefits.
California Attorney General Xavier Becerra asked a state appeals court Wednesday to ignore the companies’ pleas to extend a pause on a lower court’s order requiring the dramatic shift. A stay of the decision is set to expire midnight Thursday. If the appeals court agrees with Becerra or takes no action, Uber and Lyft have said the order will force them to suspend ride-share operations in their home state starting Friday.
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San Francisco Superior Court Judge Ethan Schulman said in his Aug. 10 order that Uber and Lyft are “not entitled to an indefinite postponement of their day of reckoning.” The judge ruled the companies are violating Assembly Bill 5, or A.B. 5, the year-old California law requiring them to provide their hundreds of thousands of drivers in the state with benefits including health insurance and overtime that could cost billions of dollars.
“A.B. 5 calls out the evil of employee misclassification by its name,” Becerra said in Wednesday’s filing. Pointing to years of litigation drivers have fought against Uber and Lyft to gain the benefits of employees, he said the “record is replete with harms” to the state and the companies were well aware of the fate they now face.
Uber and Lyft argue Schulman’s injunction order is so sweeping that they are legally guaranteed a pause by the appeals court. “The court should halt this looming crisis, and stay the injunction while Uber pursues its appeal in this court,” the company said in a court filing.
Both companies are bankrolling a ballot measure set for a statewide vote in November that would give app-based transportation and delivery companies a reprieve from A.B. 5. Proposition 22 exempts the companies from paying for full benefits that employees currently get under California law, such as unemployment insurance and complete workers compensation, while requiring them to pay 120% of minimum wage, health care contributions and medical and disability coverage, among others.
The appeals court case is California v. Uber Technologies Inc. and Lyft Inc., A160706, California Court of Appeals (San Francisco).
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