Uber driver sues company over resistance to California 'gig' law

Lawsuit faults ride-hailing firm for saying it will 'defy this statute' and not recognise contractors as employees.

    Drivers in California and many other states, such as New York, have lobbied for better pay and benefits from ride-hailing companies [Drew Angerer/Getty Images/AFP]
    Drivers in California and many other states, such as New York, have lobbied for better pay and benefits from ride-hailing companies [Drew Angerer/Getty Images/AFP]

    A driver for Uber has sued the company in the United States for misclassifying its drivers as independent contractors, hours after legislators in the state of California voted to help thousands of those workers become - and enjoy the benefits of being - employees.

    The proposed class-action lawsuit filed on Wednesday night by Uber driver Angela McRay appears to be the first since California's legislature passed a landmark measure that could affect workers in many US industries, including those with ride-sharing companies such as Uber Technologies Inc.

    Governor Gavin Newsom supports the proposed law, which is known as Assembly Bill 5 (AB5) and which would take effect on January 1 - though it may undergo changes before it reaches his desk.

    McRay, a resident of Pittsburg, California, in the San Francisco Bay Area, said she has driven for Uber since November 2016 and faulted the company for having "publicly stated that it intends to defy this statute" by continuing to treat drivers as independent contractors.

    "This ongoing defiance of the law constitutes a willful violation of California law," the complaint said. McRay is seeking damages for Uber drivers in California, and an injunction requiring compliance.

    Uber Chief Legal Officer Tony West had said on Wednesday that the law did not automatically reclassify drivers as employees, but made it harder to call them independent workers. "We can pass the harder test to the satisfaction of arbitrators and courts," he said.

    An Uber spokesman on Thursday said: "Under AB5, the classification test would now be different in California, but that doesn't mean we won't pass the test".

    Ambiguous status

    The law has attracted national attention because of the size of California's workforce, which includes several hundred thousand contract workers.

    Labour groups and other supporters of the law have said it would help long-suffering contractors by entitling them to coverage under minimum wage and overtime laws, and afford greater access to health insurance and expense reimbursements.

    The law has been criticised by trade groups and "gig economy" companies dependent on contract workers because of the extra financial burdens.

    Assembly Bill 5 would codify a 2018 California Supreme Court decision that limited when employers could classify workers as independent contractors.

    Uber rival Lyft Inc and food delivery service DoorDash have pushed for separate legislation to boost driver pay and benefits while preserving their independent contractor status.

    Some analysts have suggested that the companies could find middle ground with the state, agreeing on a compromise that would establish a guaranteed minimum wage for contractors.

    In March, Uber agreed to pay $20m to settle a nearly six-year-old lawsuit by California and Massachusetts drivers over their classifications.

    SOURCE: Reuters news agency