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Uber and Lyft in California have until July 1 to register drivers
Lhe new California AB5 state law marks a significant development in the battle for worker rights.
Separately, in a letter it sent to transportation companies, the agency said they must discharge drivers as employees before July 1, the date established in AB5, or otherwise expose themselves to fines or even that the agency cancels, revokes or suspends its operations.
“For now, TNC drivers (Transport Vehicles with Driver) are assumed to be employees and the commission must ensure that the TNC comply with the requirements applicable to employees of an entity subject to the commission’s jurisdiction.” Genevieve Shiroma, director of the California Public Utilities Commission, said in the statement.
The order, which was designed to establish the scope of future problems, used the acronym for transportation network companies, which is what the commission calls transportation operators (TNC).
Shiroma noted that the issue is controversial:
- A lawsuit by the state and three cities that want to force companies to reclassify drivers.
- Upcoming ballot measure sponsored by Uber, Lyft and other transportation companies (which have invested 90 million for the campaign) to exempt their drivers from AB5.
- Lawsuits from drivers seeking reclassification as employees.
- Lawsuit by Uber and Postmates who want to stop the application of AB5 against them.
“The presence of these demands and voting measures does not mean that the commission can renounce its regulatory responsibility over transnational companies,” he wrote.
“As a matter of California constitutional law, the commission is tasked with enforcing the laws applicable to entities subject to its jurisdiction until such time as a higher court, the legislature, or the public through their right to vote, determine otherwise. ‘
Uber and Lyft backed off and said the November vote offers a better approach.
Lyft spokeswoman Julie Wood indicated in an email data from a study the companies commissioned that showed that only 10% to 20% of drivers would want to be classified as employees.
“The presumption of the commission is erroneous; drivers are correctly classified as self-employed and overwhelmingly want to be – 71% in the latest independent survey, even after the impacts of COVID.
It also said that the application of the AB5 law would force it to change its business model.
“If California regulators force companies to change their business model, it could potentially jeopardize our ability to provide reliable and affordable services along with threatening access to this essential job that Californians depend on.”
On the other hand, some of the organizations that defend the rights of workers applauded the order.
“We have long been putting up with Uber and Lyft classifying drivers as self-employed, exploiting them and we intend to prove it in court.”
Said Meiling Bedard, spokesman for City Attorney Dennis Herrera, who joined California Attorney General Xavier Becerra and attorneys for the city of Los Angeles and San Diego in suing the trucking companies last month.
“As the California Public Service Commission takes the position that Uber and Lyft drivers are employees, they join a long list of government and regulatory entities that have consistently and correctly reached that same conclusion ».
Background
In an order on Dec. 19, Robert Mason, an administrative law judge for the commission, asked Uber and Lyft for detailed answers about why they believe their drivers should not be employees.
Most of the 18-page response brief detailed other issues, such as sexual harassment issues, sexual assault claims, confidentiality issues, and autonomous vehicles.
The only practical change due to the reclassification of the disputed order is that companies must provide drivers with social insurance coverage, whether self-employed or employed.
Social insurance is no small thing. For high-risk professions like drivers, it can be highly expensive.
The ballot measure backed by Uber, Lyft and others says the companies would provide a form of workplace accident insurance similar to that of employees.
In a June 2 letter to travel companies, Doug Ito, director of the CPUC’s consumer protection and compliance division, reminded them of the July 1 deadline set by AB5 for companies to give high drivers as workers to be considered employees under the law.
The letter established the consequences for not complying, noting that the PUC is authorized “to cancel, revoke or suspend the operating authority of a carrier, and to fine a carrier, for not complying with the state transportation law.”
Uber and Lyft in California have until July 1 to register drivers
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