Uber, Postmates File Suit To Block Gig Worker Bill Days Before It Takes Effect
WESTWOOD (CBSLA) — Hundreds of rideshare drivers continued to pick up anxious passengers from the LAX-it lot as the new year looms.
Come Wednesday, many of the drivers will go from being gig-economy workers to full employees.
"I think it is helpful, and so many of us are struggling," Henok Berhe, a rideshare driver, said. "And I think it's good news."
The new law, AB 5, takes effect Jan. 1 and would reclassify a slew of independent contractors like rideshare drivers, food-delivery workers and even those who work in the music industry. The law requires companies to provide minimum wage, overtime pay, sick leave and other benefits.
"Everybody should be able to have benefits and be able to be part of the system somehow," Jaime Barajas, a rideshare driver, said.
But Uber and Postmates are looking to put the brakes on the law, filing a lawsuit just two days before it is set to take effect.
"AB 5 is an irrational and unconstitutional statute designed to target and stifle workers and companies in the on-demand economy," the companies alleged in the suit.
Craig Byrnes, an employment attorney said companies oppose the law because it would increase labor costs and reduce worker flexibility.
"They're concerned about their profits," Byrnes said. "I understand that they ought to be concerned about their profits. That's what they're in business for, to make money, but I really don't see that there's a legal basis for any challenge."
Uber, Postmates and other rideshare companies launched a ballot initiative hoping voters will give the companies a break.
Teamsters Local 396 issued a statement in support of the law, saying that it protects workers from wage theft, however the recording industry warned that it could make it harder to make music in California since most studio engineers are contract workers.