Uber wins California lawsuit. The Court of Appeal ruled that the American company that operates the VTC driver platform will be able to continue to treat them as independents. The victory of the industry giant and other companies operating in this niche (for example, Lyft), as their economic model depends on this status.
The International Union of Service Workers intends to appeal. Thus, a case that already seems endless could go to the California Supreme Court if it agrees to look into it.
Bill ‘AB5’ v. ‘Proposition 22’
As a reminder, in 2019 the California Senate passed what is known as the “AB5” bill, which reclassified self-employed drivers as employees to allow them to enjoy Social Security and other rights permitted by this status.
In response, Uber, as well as Lyft, threatened to end their services in that state. At the same time, they have invested more than $220 million, and this is since August 2019 (i.e. even before the vote on the AB5 law) in a communication campaign in favor of “Proposition 22”, a measure that just allows companies to treat the platform of workers as self-employed, but with the provision of compensation and some social benefits. Both companies were satisfied, with 58.6% of California voters in favor of Proposition 22.
Court of Appeal finds Proposition 22 unconstitutional
In 2021, a group of critics, including the California State Council’s Service Workers International Union (SEIU), filed a lawsuit demanding that the proposal be cancelled. The judge who heard the case agreed with them, describing the proposal as unconstitutional given that it limits the caucus’s power to legislate in the future on the issue, which Uber contested in the process, taking the case to the Court to Appeal. The latter just won the case.
All three appeals court judges overturned the ruling, although according to the New York Times, one of them wanted to reject Proposition 22 outright for the same reason as the lower court judge. However, the authority ordered that the clause making it difficult for self-employed workers to organize should be separated from the rest of the proposal.
International Union of Service Workers wants to appeal
“Every voter in California should be concerned about the growing influence of corporations in our democracy and their ability to spend millions of dollars misleading voters and buying laws for themselves,” David Huerta, president of the Union of International Employees in California, said in a statement. The union intends to appeal the decision and go to the Supreme Court, which could take months to decide whether to hear the case or not.
Uber defends the “gig economy”, the pillar of its model, body and soul, even when it is criticized and attacked from all sides. If it resists fairly well in the United States, the company had to phase it out in the United Kingdom in 2021, having been forced to grant employee status to British VTC drivers with minimum wages and paid holidays.
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