Appeals Court Gives Reprieve To Uber, Lyft In California

Speaker 1: 00:00 Uber and Lyft have said they'll shut down in California tomorrow. Unless a judge lifts a ruling, requiring them to change their driver's status from independent contractor to employee. It's a standoff between the two rideshare companies and the state they've been battling over how ride sharing drivers should be compensated since a bill AB five went into effect in January challenging, a basic premise of the so-called gig economy. Sarah Libby, managing editor of voice of San Diego joins us now to explain how that might affect us. Welcome Sarah. Thank you for having me. So now, does this mean that people who normally rely on Uber and Lyft may have to find alternatives to them? Speaker 2: 00:39 It certainly seemed so there had been a little speculation as to whether the companies were bluffing, but at least Lyft for its part has said definitively that they do plan to shut down operations beginning Thursday night. And so, um, it's not clear whether Uber will follow suit, but you know, at least Lyft has said they're going for it. Speaker 1: 00:58 So now San Diego assemblywoman, Lorena Gonzalez was the author of the initial bill AB five that began this battle over whether the ride share companies should classify their drivers as independent contractors or employees. So briefly, how would her bill affect rideshare drivers pay and better? Speaker 2: 01:16 Yeah, so AB five laid out a three part test that was based on a Supreme court decision guiding when employers should consider a worker, an employee, and many people argue that Lyft and Uber and other gig companies don't meet that test. And so they would be forced to consider their workers, employees, which means that they would be entitled to benefits workers' compensation and unemployment insurance. One important thing to remember is that the bill also allows for part time employees. So it's not necessarily that they'd have to make drivers full time employees, but they would have to give them things like benefits. Speaker 1: 01:55 No, the companies have been fighting it out in court. How has it played out so far? Speaker 2: 01:58 Yeah, there have actually been a lot of lawsuits on top of the most recent one that's causing all of this drama. Some of the good companies have so sued to overturn the law. And on the flip side, prosecutors have sued the companies for violating the law and almost universally the courts have sided against the companies. And they've said that AB five is legal and that the companies appear to be violating it. Speaker 1: 02:24 No yesterday San Diego Amera, Kevin Faulkner asked a judge to lift the injunction that prompted the companies to say, they'll stop service. Even though they've known for a couple of years, that this was coming down the pike. So, so what is the mayor hoping to gain by that? Speaker 2: 02:38 His letter to the court is kind of walking a fine line. He framed it as, you know, wanting to prevent this big disruption caused by the right of share companies, suspending their services, um, and giving lawmakers and the companies time to come to a solution. The problem with that of course is the AB five is the solution that the lawmakers came up. So there is a similar lawsuit filed by the San Diego city attorney against Instacart, a grocery delivery app. That's kind of in the same situation where a judge ruled that this company is likely violating the law and should make its workers, employees, and not injunction has been put on hold while the case plays out in court. Um, which means Instacart can keep operating as usual. So it seems like the mayor just wants to see the same thing happen here, but Mara Speaker 1: 03:28 Elliot has actually filed a suit against the rideshare drivers too. Right. So in some ways it looks a little bit like the city of San Diego has got a divided front Speaker 2: 03:36 Thomas. Yeah, absolutely. So, uh, Mara Elliott, uh, is one of the prosecutors who filed this lawsuit against Uber and Lyft. And like I said, she also has, uh, filed suit against Instacart saying that they're violating the law and she's arguing that those companies aren't just harming their workers, but that they're also harming other businesses that are playing by the rules. And so both her and the mayor are arguing that they're the ones sticking up for businesses, but they clearly have much different interpretations of what that means. Speaker 1: 04:10 And assembly woman Gonzalez weighed in on Twitter about the mayor's request. What was her response? Speaker 2: 04:15 Yeah, she, I'm certainly not shy about wading in, on Twitter to things. Um, she said she was disappointed in the mayor's decision and she also questioned some of where he's getting the numbers that he put out. And so it doesn't seem like they're likely to see eye to eye on this issue anytime soon, Speaker 1: 04:34 No voters of course are going to have a chance to weigh in on all this in November with proposition 22, which is from the rideshare companies, what is the solution that it offers? So Speaker 2: 04:44 They want to be exempted from the requirements of AB five. And they've said that, you know, to compensate, they are willing to give their drivers some additional perks and benefits. Um, but certainly not to the extent the AB five would require as far as unemployment insurance and workers comp and the ability to, you know, set their hours and a lot of the flexibility, um, that they're seeking. Speaker 1: 05:14 So Sarah, if the ride share companies do stop operating tomorrow, what alternatives do consumers have these days? I mean, we don't see taxis around much more, do we? Yeah. Speaker 2: 05:23 Yeah. I mean, some companies, um, I'm sorry, some cities have actually formed nonprofits that have, you know, offered similar services under a different model. Um, and so perhaps that's a possibility in San Diego though. It wouldn't happen right away. And then on top of, you know, taxis, I suppose people would be forced to use public transit. Speaker 1: 05:47 We've been speaking with Sarah Libby, managing editor of voice of San Diego. Thanks so much for joining us, Sarah. Speaker 2: 05:53 Thanks again, I didn't breaking news. A state court has Speaker 3: 05:58 Granted an emergency stay that will prevent the shutdown of Uber and Lyft ride hail services that was set to begin at midnight across California.