Follow the potential shutdown in California for Uber and Lyft Drivers – Awaiting decision on Senate bill AB 5 classifying Gig workers as employees


When will Californian Uber, Lyft and Gig workers in general be classified as employees? Well after managing to delay the application of senate bill AB-5, both companies have postponed the costly policy forcing them to treat their drivers like employees instead of independent contractors. As of Thursday August 20th, (right down to the within hours of the deadline) the companies have won some reprieve from the state, enabling them to delay the requirement to classify drivers as employees. And the Trump campaign has signaled it is onside with the position ride-share companies are taking against the California bill. Now it looks increasing likely that bill AB 5 will be decided by voters rather than by courts. California voters will decide on a number of ballot measures on the general election date of Nov. 3, including the outcome of Proposition 22 which is supported by Uber, Lyft, Instacart and other companies active in the gig economy.

Platforms like Uber and Lyft represent just a fraction of California’s independent contractor workforce. In Los Angeles, contract workers exist across many industries including music & film, news media, information technology and beyond and law makers untangling which job roles apply and which don’t can be confusing. Here is how freelancers can be affected.

Classifying rideshare drivers as employees could set a dangerous legal precedent across America if other states pursue similar measures. Dangerous that is, to the profits of ride-hailing companies who depend on reducing costs and liabilities to ensure a nimble and flexible business model. From New York to Washington to Florida, state governments seeking measures popular with its citizens could have a profound impact on the business model that made Uber and Lyft so successful.

On August 19, Uber pushed an alert message to its drivers: “Ridesharing in CA may be suspended”. While this brings a lot of short term uncertainty, investors believe Uber and Lyft will “go to the mat” on this issue. Armies of lawyers and lobbyists will be engaged to triple up efforts to give ridesharing companies an exemption from Senate bill AB-5.

In general, Uber and Lyft are betting that public opinion will turn against lawmakers, and that pressure will build to allow the companies to operate in the state as they are today using a “contractor” model instead of payroll employee model. Customers will be inconvenienced and an unmeasured portion of drivers prefer to keep their flexibility and freedom to work when they want, how they want.Back in 2016 Uber suspended service in Austin Texas, angering both drivers and riders who depended on the service to support their livelihoods. A number of alternative services grew to provide a partial substitute, but when Uber and Lyft were allowed to return with unchanged business models, they quickly dominated the market again. Both companies along with other gig businesses, have poured $181 million dollars (as of September 8th) into a ballot measure campaign that would create a “third category” of employment, enabling them to continue classifying drivers as contractors rather than staff

Follow this ongoing blog to stay updated on the latest developments for California gig-workers (below):

September 12th 2020 news: Why Uber and Lyft are taking a page out of big tobacco’s playbook in labor law battle. – A recent investigative report reveals that the Prop 22 campaign and their supporters (with or without assistance of the gig companies themselves) have also leveraged another political tactic for which big tobacco is notorious: attacking and harassing critics, including academics and government officials.

September 9th 2020 news: Uber Analyst Expects California’s Prop 22 To Pass Based On Latest Polling A new poll published by Redfield and Wilton found 41% of California voters would vote “yes” for Prop 22 compared to 26% who would vote “no” and 34% who are undecided.

September 8th 2020 news:

LA Times: Uber and Lyft just made their campaign to keep exploiting workers the costliest in history

September 4th 2020 news:

CNN: After rides, California law could target food and grocery delivery services next

September 1st 2020 news:

Bloomberg: Uber Law Threatens the Gig Economy – A majority of drivers like working as independent contractors, so why force them to become employees?

JD Supra: Uber and Lyft to Stay in California … for Now – Consumers in California will still be able to utilize the rideshare services of Uber and Lyft, at least for the time being. The rideshare companies recently lost their attempt to delay a preliminary injunction that will compel them to reclassify their drivers as “employees.” In response to the order, the companies announced that they would leave their home state of California. The Court of Appeal recently granted a temporary stay in favor of the rideshare companies while the matter is under appeal, enabling them to continue to operate without having to immediately reclassify their drivers.

August 27th 2020 news:

The Telegraph: Uber is the litmus test of support for the market economy Will policymakers protect innovation, or sacrifice our economic welfare on the altar of traditional employment relationships?

August 25th 2020 news:

Fox News: Why Uber, Lyft’s future in California could be decided by voters

August 21th 2020 news: Trump campaign sides with Uber & Lyft in battle over future gig-workers

August 20th 2020 news: Uber, Lyft Win Delay on Converting Drivers to Employees Lyft is shutting down at midnight in California

WIRED MAGAZINE: It’s happened before, Uber stopped in Austin Texas and this is what happened…. Will it be the same in California?

MOTLEY FOOL: Uber and Lyft will consider turning drivers into franchisees to do an endrun around California bill AB-5

August 19th 2020 news:

Ridesharing in CA may be suspended: the company said in a push alert via its app.

From CNBC: Competitors to Uber and Lyft plan to grab marketshare if they shutdown

Uber CEO on youtube interview making the case of why drivers shouldn’t be considered like full time employee staff.

August 14th 2020 news:

August 13th 2020 news:

From the Verge: Uber and Lyft California appeal denied

August 12th 2020 news:

From the Verge: Uber may shut down in California if forced to classify drivers as employees, CEO says

Benzinga: California Trucking Remains Exempt From AB5 For Now

July 20th 2020 news:

March 5th 2020 news:

January 10th 2020 news:

December 31 2019 news:

September 12th, 2019 news:


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