Ride-share companies Uber and Lyft have sounded the alarm that they may be forced to stop operations in the state of California this week, over a state law aimed at them that forces reorganization and higher taxes on the firms in an attempt to squash the “gig economy.”
What are the details?
The fight is over Assembly Bill 5, legislation that passed last year in an effort to make firms convert gig workers into employees, requiring the companies to provide benefits (and contributions to state coffers) as they would for someone classified as an employee.
California sued Uber and Lyft to force compliance with the measure, and the judge overseeing the case signaled last week that the state’s Democratic lawmakers and governor will likely win.
That prompted both companies to warn that they would have to leave the state at least until the general election Nov. 3, when voters can decide on a ballot initiative that would provide ride-share workers an exemption — which the legislature has done several times after seeing how AB 5 began to destroy numerous industries like trucking when it went into effect earlier this year.
The final decision comes Friday, and if the state wins, Californians will be relegated back to hitchhiking or calling for the more expensive option of a cab — a move that critics say will cost citizens and gig workers alike.
San Jose Mayor Sam Liccardo (D) and San Diego Mayor Kevin Faulconer (R) released a joint statement Wednesday warning their fellow Californians that allowing ride-share firms to flee would hurt the pocketbooks of citizens — especially amid high unemployment from the COVID-19 pandemic.
Liccardo shared the plea on Twitter with the message, “As bipartisan mayors of CA’s 2/3 largest cities, we share serious concern for the exodus of ride-share companies statewide. This Friday, nearly 1M gig workers will lose their income in the Golden State–deepening the economic pain felt in our communities during this crisis.”
Gig workers have expressed mixed views on the issue publicly. KCAL-TV presented a segment declaring that Uber warned “it could suspect service in California by Thursday.”
The outlet interviewed two drivers with opposing positions.
The first was Jerome Gage — a gig worker for both Uber and Lyft — who expressed his frustration that the companies are not complying with AB 5, saying that “drivers are constantly having to work more, and more, and more, and more, and Uber and Lyft — they keep on paying us less and less and less and less.”
But Uber driver Rodolfo Valdivia feels otherwise, telling KCAL, “I feel like something’s being taken away from me. Like I’m being robbed of my right to be able to work at my own discretion.”