California’s gig economy battle could come to a head today with Uber and Lyft pulling vehicles from the road if a state court rules against them, a watershed moment that could ripple across the country
California last year enacted a law that would effectively require companies like Uber to treat drivers as full-time employees entitled to benefits and wage guarantees.
Meanwhile, state and national Republicans are hoping to make the California experiment an anchor around the necks of Democrats, pointing to layoffs that have occurred because of the state's new mandate. The companies are appealing to economic sensibilities during a pandemic-driven recession, emphasizing how many drivers need flexible work to survive. They are also emphasizing the loss of convenience to riders who have grown accustomed to ready access to trips less expensive than cab rides.
Numerous industries were affected, but the reclassification dictate could directly upend the business models of companies like Uber and Lyft, which rely on fleets of independent contractor drivers who set their own hours.
The companies' plans for a California hiatus have attracted ample skepticism. In his ruling, Schulman wrote that Uber and Lyft could have been preparing for this moment since the Dynamex decision, saying the prices of compliance are “costs that Defendants should have begun incurring more than two years ago.” He rejected the notion that gig companies deserved a reprieve until voters act.
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