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Uber is confident that a California bill codifying stricter requirements for classifying workers as independent contractors, which is on its way to become law, won't force the firm to reclassify its drivers in the state.
What they're saying: One part of California's new legal test defining contract employment looks at whether a worker's work is "outside the company's usual course of business." Uber general counsel Tony West told reporters Wednesday that Uber believes its main business is building a technology marketplace, not transporting passengers, a familiar refrain from ride-hailing companies over the years.
Why it matters: That means Uber will stay put unless and until it loses a challenge in court and is forced to reclassify drivers. Uber believes it would pass the legal test, which is similar to ones already in place in three other states where Uber operates, West said.
Yes, but: Uber, along with rival Lyft and food delivery company DoorDash, is planning to fight the bill with a state ballot measure that would effectively create a separate employment category.
- It's doing so to preempt the lawsuits over its classification of drivers as contractors that will inevitably be filed. Uber has already faced a number of those across the U.S. and in California.
- Recent amendments to the bill also give certain city attorneys the ability to file injunctions against employers to enforce the new law.
- The companies also worked to turn their drivers and customers into advocates against the bill as it made its way through the state Senate.
Similarly to Lyft, Uber warns that should it "fail the test" via a legal challenge and be forced to reclassify its drivers, the circumstances of their work would change.
- "Certainly the flexibility of drivers would be limited, shifts would be a feature of what it means to interact with the platform... they would not be able to be dual-app" (work for both Uber and Lyft), said West during a call with reporters.
- While nothing in the law dictates that Uber and Lyft would have to mandate those changes, it wouldn't be surprising to see the companies seek to impose stricter work requirements to offset the additional costs and potential smaller corps of drivers.