Connect with us

Industry

Uber and Lyft Must Classify Their CA Drivers as Employees. Here’s How That Could Change Ride-Sharing Apps.

Published

on

  • A California judge ruled Monday that Uber and Lyft must classify their drivers as employees, not gig workers.
  • That decision, which will go into effect next week if it is not halted by an appeal, means that employees for ride-sharing companies will be eligible to receive benefits, including health insurance, paid time off, sick leave, and overtime.
  • Both Uber and Lyft have argued that the decision will cause ride costs to increase significantly and could result in mass layoffs. 
  • Uber CEO Dara Khosrowshahi has proposed a third model that would establish a benefits fund, but under it, drivers would still likely not be able to see full benefits guaranteed under an employee status.

Judge Rules in Favor of California

A California judge has ruled that drivers for Uber and Lyft in the state must be reclassified as employees rather than gig workers. 

Notably, that ruling means drivers will be afforded the same protections and benefits as the companies’ other full-time employees. For example, as full-time employees, drivers could be eligible for benefits like health insurance, overtime, paid sick leave, vacation time, and more. It’s also possible that Uber and Lyft would have to pay them personal vehicle mileage. 

Gig workers, also known as contract or independent workers, don’t see those benefits. 

The decision, which came from San Francisco Superior Court Judge Ethan Schulman on Monday, isn’t scheduled to take effect until next week. Uber and Lyft have also promised to appeal the ruling and block it from even going into effect.

For their part, both companies have argued that their businesses are in technology (meaning the apps themselves), not ride-sharing. They also claim that the majority of their drivers prefer being independent and deciding when they work, an aspect that likely would be harder to retain if drivers were treated as employees.

In his ruling, Schulman said both companies used “circular reasoning” by treating only their tech workers as employees, saying that reasoning “flies in the face of economic reality and common sense,”

“It bears emphasis that these harms are not mere abstractions; they represent real harms to real working people,” Schulman said regarding the current lack of benefits for drivers. “To state the obvious, drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business.”

Still, Schulman noted that for these companies, such a change in reclassification might “have an adverse effect on some of their drivers, many of whom desire the flexibility to continue working as they have in the past.”

California Sues Uber and Lyft

Last year, California passed Assembly Bill 5, a bill that requires companies to treat their workers as employees if those companies control how workers perform tasks or if their work is a routine part of the company’s business.

Specifically, AB5 was designed to target companies like Uber and Lyft. In fact, the state has argued that because these companies deal in ride-sharing, their drivers are essential to business. Therefore, they should be treated as employees. 

Still, after this law went into effect at the beginning of the year, Uber and Lyft refused to adhere to it. 

In May, California Attorney General Xavier Becerra filed a lawsuit against the companies for their refusal. Chiefly, that lawsuit seeks “restitution for workers, a permanent halt to the unlawful misclassification of drivers, and civil penalties that could reach hundreds of millions of dollars.” 

Both companies—along with DoorDash—have pumped $110 million into a campaign to exempt them from the law. Because of those efforts, in November, California voters will decide on a ballot measure that could keep ride-sharing companies from having to convert their drivers into employees.

Why Uber and Lyft Are Fighting This Ruling

Uber and Lyft had argued for Schulman’s ruling to be stayed until the November ballot, but Schulman denied that request.

“The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law,” Uber spokesperson Matt Kallman said following the decision. “When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression.”

Also Monday, Lyft released a similar statement saying that drivers don’t want to be employees, “full stop.” 

The debate around how to address these companies’ drivers is not a black and white argument. Many people drive for Uber or Lyft on the weekends for a little extra money. Some retired individuals also drive on for these companies on the side. 

But for many drivers, this may be their only job. For example, they may be currently unable to find another job. Such a situation is especially true as the United States continues to struggle with the COVID-19 pandemic, where a driver may have lost their main job and could now rely on Uber or Lyft as a main source of income.

“Today’s ruling affirms what California drivers have long known to be true: workers like me have rights and Uber and Lyft must respect those rights,” Lyft driver Mike Robinson said in a statement following Monday’s decision.

It’s also important to keep in mind that companies like Uber and Lyft were already struggling to turn a profit, and now, that’s even worse because of the coronavirus. Just between April and June, Uber’s bookings were reportedly nosedived 75%.

The prospect of having to change their business models could result in layoffs of drivers. It would likely also mean substantially higher costs for passengers. 

A Potential Third Option

In the end, the decision from Schulman likely won’t stop with California. In fact, it could be the beginning of massive changes to ride-sharing companies across the U.S. 

In a March letter to President Donald Trump, Uber CEO Dara Khosrowshahi advocated for a third model on how to classify drivers. Particularly, Khosrowshahi argued that workers should be offered another way to gain protections without sacrificing the flexibility of being a gig worker. 

Just hours before Schulman’s decision on Monday, Khosrowshahi outlined more details of that plan in an op-ed published by The New York Times.

“Our current employment system is outdated and unfair,” he said. “It forces every worker to choose between being an employee with more benefits but less flexibility or an independent contractor with more flexibility but almost no safety net.”

“It’s time to move beyond this false choice. As a start, all gig economy companies need to pay for benefits, should be more honest about the reality of the work, and must strengthen the rights and voice of workers.”

Khosrowshahi then proposed a model that would require gig companies “to establish benefits funds which give workers cash that they can use for the benefits they want, like health insurance or paid time off.”

“Independent workers in any state that passes this law could take money out for every hour of work they put in,” he added. “All gig companies would be required to participate, so that workers can build up benefits even if they switch between apps.”

Khosrowshahi claimed that if this had been the law nationwide, Uber would have contributed $655 million in benefits last year. To further his point, he used an example of a Colorado driver working an average of 35 hours a week last year. Under Khosrowshahi’s system, that driver would have racked up $1,350 in benefits for 2019. As Khosrowshahi noted, that’s enough to cover two-weeks time off or a median annual premium for health insurance.

But the key here is “or.” Unlike a full-time employee, this driver would need to make a decision on how to spend that accrued benefit money as they would likely not be able to choose both options.

See what others are saying: (The Verge) (NPR) (Reuters)

Industry

Twitter CEO Jack Dorsey Says Trump Ban Was the “Right Decision” But Sets “Dangerous” Precedent

Published

on

  • While defending Twitter’s decision to permanently ban President Donald Trump, CEO Jack Dorsey noted the “dangerous” precedent such a move set.
  • “Having to take these actions fragment the public conversation,” Dorsey said in a lengthy Twitter thread on Wednesday. “They divide us. They limit the potential for clarification, redemption, and learning.”
  • Dorsey’s message came the same day Twitter fully reinstated Rep. Lauren Boebert’s (R-Co.) account, hours after locking it for violating Twitter rules. A Twitter spokesperson later described the lock as an “incorrect enforcement action.”

Dorsey Describes Trump Ban as a Double-Edged Sword

In a lengthy Twitter thread published Wednesday, CEO Jack Dorsey defended his platform’s decision to permanently ban President Donald Trump, while also noting the “dangerous” precedent such a unilateral move sets.

Twitter made the decision to ban Trump on Jan. 8, two days after pro-Trump insurrectionists stormed the U.S. Capitol complex in an assault that left multiple dead.

“I do not celebrate or feel pride in our having to ban [Trump] from Twitter, or how we got here,” Dorsey said in the first of 13 tweets. 

Nonetheless, Dorsey described Trump’s ban as “the right decision for Twitter.”

“Offline harm as a result of online speech is demonstrably real, and what drives our policy and enforcement above all,” he added.

“That said, having to ban an account has real and significant ramifications,” Dorsey continued.

“[It] sets a precedent I feel is dangerous: the power an individual or corporation has over a part of the global public conversation.”

Dorsey described most bans as a failure of Twitter to “promote healthy conversation,” though he noted that exceptions to such a mindset also exist. Among other failures, Dorsey said extreme actions like a ban can “fragment public conversation,” divide people, and limit “clarification, redemption, and learning.”

Dorsey: Trump Bans Were Not Coordinated

Dorsey continued his thread by addressing claims and criticism that Trump’s ban on Twitter violated free speech.

“A company making a business decision to moderate itself is different from a government removing access, yet can feel much the same,” he said.

Indeed, multiple legal experts have stated that Trump’s ban on social media does not amount to First Amendment violations, as the First Amendment only addresses government censorship. 

“If folks do not agree with our rules and enforcement, they can simply go to another internet service,” Dorsey added. However, Dorsey noted that such a concept has been challenged over the past week. 

Trump has now been banned or suspended from a number of platforms, including Facebook, Instagram, and YouTube. On Wednesday, Snapchat announced plans to terminate Trump’s account in the “interest of public safety.” Previously, Snapchat had only suspended his account, but as of Jan. 20, it will be permanently banned. 

Addressing criticism of the swift bans handed down by these platforms in the wake of the Capitol attack, Dorsey said he doesn’t believe Trump’s bans on social media were coordinated.

“More likely: companies came to their own conclusions or were emboldened by the actions of others,” he said.

Twitter Reverses Course of Locking Rep. Lauren Boebert’s Account

Dorsey’s thread regarding the fragile nature of regulating users’ privileges on the platform seemed to play out earlier the same day.

On Wednesday, newly-elected Rep. Lauren Boebert (R-Co.) posted a screenshot to Instagram showing that her Twitter account had been locked for six days. The screenshot stated that she had violated Twitter’s rules and would be unable to tweet, retweet, or like until her account was unlocked. 

Hours later, Twitter reversed course and fully reinstated her account. 

“In this instance, our teams took the incorrect enforcement action. The Tweet in question is now labeled in accordance with our Civic Integrity Policy. The Tweet will not be required to be removed and the account will not be temporarily locked,” a spokesperson for the platform told Insider.

It is unknown what tweet caused that initial ban, as Twitter refused to say. 

The latest tweet from Boebert’s account to be tagged with a fact check warning is from Sunday. In that tweet, she baselessly and falsely accuses the DNC of rigging the 2020 Election, a claim that largely inspired the Capitol attacks. 

See what others are saying: (Business Insider) (CNN) (Associated Press)

Continue Reading

Industry

Uber and Lyft Drivers Sue To Overturn California’s Prop 22

Published

on

  • A group of Uber and Lyft drivers filed a lawsuit Tuesday against California’s controversial Prop 22, a ballot measure that was approved by nearly 59% of state voters in the 2020 election. 
  • While Prop 22 does promise drivers wage guarantees and health insurance stipends, it also eliminated some protections as well as benefits like sick pay and workers’ compensation.
  • In their lawsuit, the drivers argue that Prop 22 “illegally” prevents them from being able to access the state’s workers’ compensation program. 

What’s in the Lawsuit?

In a lawsuit filed Tuesday, a group of Uber and Lyft drivers asked California’s Supreme Court to overturn the state’s controversial Prop 22 ballot measure.

The drivers behind the lawsuit, along with Service Employees International Union, allege that Prop 22 “illegally” bars them from being able to participate in the state’s workers’ compensation program. 

Additionally, they argue that the measure violates California’s constitution by“stripping” the state legislature of its ability to protect who unionize. 

“Every day, rideshare drivers like me struggle to make ends meet because companies like Uber and Lyft prioritize corporate profits over our wellbeing,” Plaintiff Saori Okawa said in a statement. 

Conversely, Uber driver and Prop 22 activist Jim Pyatt denounced the lawsuit, saying,“Voters across the political spectrum spoke loud and clear, passing Prop 22 in a landslide. Meritless lawsuits that seek to undermine the clear democratic will of the people do not stand up to scrutiny in the courts.”

California ballot measures have been occasionally repealed in the past; however, most of the time, they’ve only been repealed following subsequent ballot measures. If this lawsuit fails, such an initiative would likely be the last option for overturning Prop 22.

What is Prop 22?

Prop 22, which was approved by 59% of state voters in the 2020 Election, exempts app-based transportation and delivery companies from having to classify their drivers as employees. Rather, those drivers are listed as “independent contractors,” also known as gig workers. 

Notably, Prop 22 was supported by major industry players like DoorDash, Uber, Lyft, and Instacart, which launched a massive $200 million lobbying and advertising campaign.

While those companies did promise wage guarantees and health insurance stipends for drivers, Prop 22 also eliminated a number of protections and benefits drivers would have seen under an “employee” status, including sick pay and workers’ compensation. 

Because of that, many opponents have argued that the measure incentivizes companies to lay off their employees in favor of cheaper labor options.

Last week, it was reported that grocery stores like Albertsons, Vons, and Pavilions began laying off their delivery workers in favor of switching to ”third-party logistics providers.” According to Albertson’s, unionized delivery workers were not included in the layoffs. 

In recent coverage from KPBS, one San Diego Vons delivery worker detailed a situation in which he and delivery workers were called into a meeting with management. 

“I thought they were going to give us a bonus or a raise or something like that,” he said. 

Ultimately, that employee was told he would be losing his job in late February, even though he had been with the company for two-and-a-half years. 

“I didn’t want to tell them,” the employee said of his parents, one of whom is disabled. “I’m the breadwinner for the family.”

See what others are saying: (The Verge) (The Washington Post) (CNN)

Continue Reading

Industry

Daniel Silva Blames Cory La Barrie for His Own Death in New Legal Filing

Published

on

  • Popular Tattoo artist Daniel Silva said the death of YouTuber Cory La Barrie was due to La Barrie’s “own negligence,” in response to a wrongful death lawsuit from his family.
  • La Barrie died last May after Silva lost control of the sports car they were in, crashing into a street sign and tree. 
  • La Barrie’s family has accused Silva of negligence, saying his excessive speeding caused the crash. They also claim he was under the influence, though he was never formally charged with a DUI. 
  • According to TMZ, Silva filed documents saying La Barrie “assumed the risk of death when he jumped into Daniel’s car that fateful night back in May.”

Corey La Barrie’s Death

Popular tattoo artist Daniel Silva has blamed YouTuber Corey La Barrie for his own death in response to a wrongful death lawsuit from La Barrie’s family, according to TMZ.

The tabloid says he filed legal documents saying, “the car crash that led to Corey’s death was due to his own negligence, and he assumed the risk of death when he jumped into Daniel’s car that fateful night back in May.”

La Barrie died on May 10, his 25th birthday, after Silva was speeding and lost control of the sports car they were in, crashing into a street sign and tree.

Police say Silva tried to leave the scene but was stopped by witnesses. He was later arrested and charged with murder. Silva eventually reached an agreement with prosecutors to plead no contest to vehicular manslaughter with gross negligence.

In August, Silva was sentenced to 364 days in jail, with credit for 216 days served because of California sentencing guidelines, even though it had only been 108 days since the crash at the time.

He also earned five years of probation, 250 hours of community service, and a suspended prison sentence of four years, which would be imposed if he violates the terms of his probation.

Wrongful Death Suit

Silva still faces the family’s lawsuit, which they filed the same month their son died.

In it, La Barrie’s family has accused Silva of negligence, saying his excessive speeding caused the crash. They also claim he was driving under the influence.

It’s worth noting that people close to Silva have disputed that claim and he was never charged with a DUI. However, the first police statement about the crash labeled it aDUI Fatal Traffic Collision.” Witnesses have said the two were partying earlier that night, though

See what others are saying: (TMZ) (USA Today) (Variety)

Continue Reading