Uber Finds Legal Loophole To Ignore New California Ridesharing Law

Uber announced on Wednesday that it will ignore new California legislation which requires companies to reclassify contract workers as employees – a measure which may affect up to one million residents who work as contractors. 

The San Francisco-based company’s chief legal officer, Tony West, said in a news conference that its drivers’ work is “outside the usual course of Uber’s business,” which is serving as a technology platform for several types of marketplaces. 

Uber counsel Tony West had pointed to legal rulings in making this argument. “In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of” marketplaces.

— Faiz Siddiqui (@faizsays) September 11, 2019

According to West, the company is prepared to fight this – as the company is “no stranger to legal battles.” 

In other words: 

Uber’s lawyers have a clever legal theory known as ‘the rule of law doesn’t apply to us and fuck you.’ https://t.co/cYXjgsVORl

— Matt Stoller (@matthewstoller) September 11, 2019

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California’s passage of Assembly Bill 5 earlier Wednesday requires companies treat workers as employees, not contractors, if they control how the workers’ tasks are performed and/or if their job falls within part of an employer’s regular business. Governor Gavin Newsom has endorsed the bill and is expected to sign it. 

The bill has implications for app-based services such as Uber, Lyft and DoorDash, which have built themselves into large businesses with independent and inexpensive workers who do not receive the benefits or minimum pay guaranteed to employees. California has at least one million people who work as contractors and who may be affected by the measure. Apart from ride-hailing and food-delivery drivers, those include nail salon workers, janitors, construction workers and others.

Under the bill, companies must consider a three-prong test when classifying a worker. That includes weighing how much a company directs the worker’s tasks and how much of the work is part of the company’s main business. –NYT

“Just because the test is hard doesn’t mean that we will not be able to pass it” says West. 

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