On Monday, Uber filed a lawsuit against the state of California, saying an upcoming zero-hours law was unconstitutional,media reported. The lawsuit is aimed at blocking AB 5, which could topple zero-hours economy companies such as Uber and Lyft. In addition, Postmates also appears in the plaintiff’s column. The law is unfair to employees and companies in the on-demand economy and threatens their flexibility, the complaint said.
In September, California became the first state to pass a law that would protect the rights of part-time workers, forcing Uber, Lyft, DoorDash, Postmates and other part-time economy companies to reclassify employees as workers. We know that many of the costs can be passed on to workers by using independent contractors.
Typically, part-time workers do not receive benefits such as health insurance, paid sick leave and overtime. Uber and Lyft drivers must pay for their cars, gasoline, vehicle maintenance and insurance. Many drivers say the system has led to exploitative behaviour.
In response to the latest rules, both Uber and Lyft said their businesses could collapse if they were asked to reclassify drivers as employees. It was learned that the two companies each contributed $30 million to a voting event to be held in November 2020, which would likely exempt them from legal action.