California is possibly on the verge of making gig firms treat separate contractors as workers, but Uber does not think the possible law will alter its business. In an upgrade, Tony West (legal chief) maintained that AB5 (Assembly Bill 5) might allow the firm carry on to categorize drivers as dealers if and when it turns out to be law. Uber would not be excused from AB5, the firm stated—instead, it hopes to pass the test that decided drivers’ status, keeping them as dealers.
For a firm to treat its employees as contractors, it has to show that they are free from the management of the appointing entity, normally engage in an “independently set up” business same as the work they conduct, and conduct work outside the normal range of that entity’s business. It is that third requirement that is the most controversial. West claimed that the work by drivers is outside of Uber’s normal business, which is to supposedly serve as a “tech firm” for digital places—it is to offer the tools drivers employ to gather fare, not to offer the transportation itself. He highlighted various rulings that he stated might support that interpretation.
On a related note, the battle for whether drivers must be considered as workers and hence be entitled for perks carries on. The newest battleground is California, where a bill for worker classification is presently being argued by lawmakers. Lyft and Uber claims that segregating their drivers as workers and not separate dealers might endanger their ventures, and have threatened to invest a total of $60 Million on a ballot action to excuse them from the bill.
The firms know that a drawn out ballot battle will lead to financial strain and headaches for the legislators, and they claim that they will not push the ballot action if they can agree with the unions and governor.
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