Lyft and Uber almost shut down in California last night

A legal battle between ride-hailing companies Lyft and Uber and their drivers led to the two companies almost pausing operations in California last night in the latest instance of gig economy workers taking on the platforms they work for.

Back in May, California’s attorney general Xavier Beccera filed a lawsuit against the classification of Lyft and Uber drivers as “independent contractors.” In particular, he noted that the coronavirus pandemic had made “the vulnerability” of these workers more apparent than ever.

A court ruling on the lawsuit issued earlier August ordered the companies to abide by California’s Assembly Bill 5 law which would force the companies to classify their drivers as employees, along with all the benefits that come with this classification such as minimum wage, healthcare and holiday pay. This order was expected to come in yesterday, on August 20.

Ahead of the order, both Lyft and Uber had said they would temporarily cease operations in the state, as they wouldn’t be able to comply with the new law. In an interview on the Pivot School podcast, Uber CEO Dara Khosrowshahi said: “We can’t go out and hire 50,000 people overnight. Everything that we have built is based on this platform that … brings people who want transportation or delivery together. You can’t flip that overnight.”

The shutdown didn’t go ahead following a last-minute reprieve by the California appeals court, allowing Uber and Lyft to continue to classify its drivers as contractors, not employees, until October 13, where arguments in the case will be heard.

“We are glad that the Court of Appeals recognised the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want,” an Uber spokesperson told the Standard.

This is the latest in a series of battles gig economy workers are fighting across the world. In the UK, the Supreme Court is considering a judgement that could force Uber to classify its drivers and couriers as employees. The judgement is expected in the Autumn, and if Uber loses, it could be forced to pay millions in compensation to impacted workers.

Demonstrators including Uber drivers, couriers and other outsource and contract workers march to call for more favourable employment rights for those engaged in ‘precarious work’ in central London on October 30, 2018 (DANIEL LEAL-OLIVAS/AFP via Getty Images)

It would completely change Uber’s business model in the UK but also have implications for other companies that rely on gig economy workers, such as Deliveroo.

At the time, Uber issued a statement saying: “The vast majority of drivers want to work independently, and over a number of years we’ve made significant changes to our app to offer more benefits with total flexibility. Drivers can determine if, when and where they drive, but can also access free AXA insurance to cover sickness or injury, as well as maternity and paternity payments.”

However, The App Drivers & Couriers Union (ADCU) which is campaigning on behalf of the drivers doesn’t see it that way. Union president and lead claimant Yaseen Aslam said: “If Uber wins, there will be an unseemly rush by greedy employers to collapse employment and we know it and Uber-ize the entire economy.”

This isn’t the only battle Uber is facing with its UK drivers. A group of drivers has launched a legal challenge against the company’s subsidiary in the Netherlands, over Uber’s use of profiling and algorithms, which can determine their earning potential and whether or not they are served jobs. The group is arguing that Uber is failing to comply with GDPR — which gives EU citizens data access rights over personal information held on them — and that the court orders Uber to enable them to port the personal data held by the platform to a data trust administered by a union.