Uber and Lyft get a reprieve from the appellate court to continue treating their employees as independent contractors, for now. As the Friday deadline was approaching for the two mega-firms to reclassify their drivers as employees, their executives announced that they would halt ridesharing services in California.
The courts should have called their bluff. But instead, the court gave them 10 extra days to reclassify their drivers as employees.
Both companies, since their inception, have been taking advantage of those who drive 50-plus hours for them and earn less than $10 an hour after factoring car insurance, gas, and car wear and tear and depreciation. The drivers have no sick days, no employer healthcare, or other employee benefits.
On top of providing no employee benefits, the two companies, with billions of dollars in revenue, avoid paying unemployment insurance, payroll taxes, and more. For its 2019 fiscal year, Uber reported $14.2 billion in revenue.
Uber spokesperson Noah Edwardsen praised the court decisions. He stated that “We are glad that the Court of Appeals recognized 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.” Mr. Edwardsen should embrace that great freed and live off $10 an hour before taxes.
Gig-worker Bill or the Assembly Bill 5 (AB5)
California Governor Gavin Newsom signed the “gig worker” bill or the Assembly Bill 5 (AB5) into law last September, and it went into effect January 1, 2020.
Under AB5, companies must prove workers are free from company control and perform work outside the usual course of the company’s business to classify workers as independent contractors rather than employees. Uber and Lyft drivers are far from being free from company control. All drivers must accept the terms of the companies’ standard form services agreement.
Uber and Lyft’s executives are handsomely compensated, but they tell rideshare drivers that making less than $10 an hour before taxes is freedom. For example, according to Business Insider, Uber paid its top five executives, $143 million in total compensations in 2018.
