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Even If California Law Classifies Its Drivers As Employees, Uber Has Options
Uber, Lyft, and DoorDash’s forced arbitration clauses could weaken the effect of the proposed law
A California bill that is on the brink of becoming law threatens the business model of the gig economy. Called Assembly Bill 5 (AB 5), it would make workers for companies like Uber, Lyft, and DoorDash employees under state law, rather than independent contractors, as they are currently classified. That change would legally entitle them to a minimum wage, unemployment insurance, and other benefits.
It’s one thing to pass such a law, but it’s another thing to enforce it. Companies that dispatch workers using smartphone apps typically require those workers to handle disputes outside of court, and those same apps can easily be leveraged to push for exemptions from a law like AB 5.
Tony West, chief legal officer for Uber, told the New York Times late last month that if the bill becomes law, the company will litigate cases “just as we have done for the last decade.” In that case, it would be up to courts to ensure enforcement of the proposed law. The Ubers of the world, however, have effectively shut down one common pathway for challenging their employment practices in court.
