The court barred Uber and Lyft from classifying drivers as contractors in California

News

The court barred Uber and Lyft from classifying drivers as contractors in California

13.08.2020 News

Uber has already tried to give drivers more autonomy so that they are considered contractors rather than employees.

A California court has issued a preliminary order ordering Uber and Lyft to immediately retrain drivers from contractors to company employees.
The order will take effect in 10 days. As independent contractors, Uber and Lyft drivers do not receive insurance, maternity leave, sick pay and overtime, and other social guarantees.

“The vast majority of drivers want to work independently, and we have made significant changes in our application to meet the California law,” – he explained.

“We will immediately appeal this decision and continue to fight for the independence of drivers”, – said Lyft.

In September 2019, California passed the AB5 Act – it equates employees of Uber, Lyft and other similar services to employees. Driver retraining cost Uber more than $ 500 million in additional costs per year and $ 290 million per year for Lyft, analysts estimate. In January 2020, Uber in California stopped showing the price of the trip in advance, instead passengers saw the price range.

In addition, the company stopped fining drivers for refusing to travel. Then allowed them to set the price of the trip. So the company tried to give more autonomy to drivers, so that under AB5 they were considered contractors, not employees.

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