This archive report was first published on 25 June 2020.
On January 1st, 2020, California's AB5 law took effect, requiring companies to reclassify workers as employees if they provide core services to their business.
However, ride-hailing companies Uber and Lyft have been accused of treating their drivers as independent contractors to deny them their privileges in the company.
These privileges include wage and hour laws, including the right to minimum wage, overtime, meal breaks, and reimbursement of business expenses, which are not eligible to contractors.
On May 5th, 2020, California Attorney General Xavier Becerra, along with city attorneys of Los Angeles, San Francisco, and San Diego, sued Uber and Lyft, arguing that their drivers were misclassified as independent contractors.
“Californians who drive for Uber and Lyft lack basic worker protections,” California Attorney General Xavier Becerra said in May.
Uber and Lyft have responded to the lawsuit, arguing that their drivers want to work independently and that the companies have already made significant changes to their app to ensure this remains the case under California law.
However, the companies are also funding a $90 million effort to pass a ballot initiative in November to counteract the effects of AB5.
