Dear MEL Topic Readers,
Uber and Lyft must reclassify drivers as employees, appeals court finds
These two San Francisco-based companies, Uber and Lyft, dominate the vehicle-for-hire market in the US. They are no doubt the leaders of gig-economy, a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. Combined, around half a million drivers are contracted to work as their drivers in California, though some of them are registered for both. Since these drivers are independent contractors, they work when and where they want but don’t get any benefits or insurance like employees do. This convenient business practice hadn’t been illegal until Assembly Bill 5 took effect January this year in the state of California, which requires businesses to treat their workers as employees rather than independent contractors unless they are totally free from company control. Now, a state’s appeals court upheld an earlier court decision to require Uber and Lyft to reclassify their contracted drivers as employees and provide them with benefits like minimum wage, overtime, paid sick leave, and unemployment insurance. That’s a significant blow to these fast-grown ride-hailing operators for their home ground and the largest market. They are now hoping to get a proposition passed to side-step the law at the coming referendum. But if it is not supported, what will happen next, appeal to the supreme court, follow the ruling, or give up the market? Also, what will happen to other states in the US and other countries?
Enjoy reading the article and think about the balance between freedom and protection.
https://edition.cnn.com/2020/10/23/tech/uber-lyft-california-appeal/index.html
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