(Ap) – Ride-hailing company Uber Technologies Inc. and the services provider, Postmates Inc. asked a u.s. court to block California’s labor law on Wednesday, arguing that the bill violates the united states Constitution.
FILE PHOTO: the Uber logo is displayed in the branch office in Bogota, Colombia, on December 12, 2019. (REUTERS photo/Luisa Gonzalez/File Photo
In a lawsuit filed in Los Angeles federal court on Monday, the companies and the two app-based drivers have said that the law, which would make it more difficult to make it to the gig economy, companies have to make in order to come to terms with their workers as independent contractors instead of employees, it is an unreasonable, vague, and inconsistent.
The office of the California Attorney General’s Xavier Becerra said in a statement on Monday it was reviewing the complaint.
The bill, called AB5, faces a number of legal challenges.
The bill was signed by the Governor of California, Gavin Newsom in September, and it has a lot of national attention, due in large part to the size of California’s workforce and the state’s leadership role in the adoption of policies that are often adopted by other states as well.
Backers of the bill, including labor groups, have argued that the law should protect the rights of workers. The ranking of the contractors and the employees of the companies that would be subject to the laws that require higher wages and other benefits, such as health insurance.
The bill hits at the very heart of the “gig-economy” business models, technology platforms such as Uber, Postmates, Lyft Inc., DoorDash, and others that are closely related to those of the state’s 450,000 employees, not full-time employees, one to drive the volume of passengers or the delivery of the food to the app-based services.
Uber, Postmates, and other app-based companies, said the legislation is detrimental to the flexibility that is valued by employees, and fewer employees would be hired, they were considered to be employees.
The companies, at their Monday, the lawsuit is referred to as AB5 was a “thinly veiled attempt” to damage the economy of the companies. The Single-app, based on the employees violate the equal protection guaranteed by the constitution of the United States of america, and California, companies are allowed.
“It is an irreparable damage to the network of companies, and the app on the basis of other service providers, through the denial of their constitutional rights, are to be treated in the same manner as others in order to anyone who they have been similarly situated,” the lawsuit said.
The companies pointed out to the alleged arbitrary exemptions for a number of non-action, the employee groups, including salespeople, travel agents, building operators, and commercial fishermen.
The full impact of the bill remains unclear in the short term, but in the lawsuit, which cited a study saying the bill would increase the ride-hailing company Lyft’s operating costs by 20% and result in 300,000 fewer drivers in the usa.
Uber, Lyft, and a food delivery company and DoorDash have allocated $ 90 million for a planned November 2020 ballot initiative that would exempt it from the law.
Report by Tina Bellon in New York; Editing by Cynthia Osterman