California ratifies law making drivers Uber and Lyft employees

The text aims to re-qualify the self-employed in the "uberised" economy as employees so that they are better protected and have a minimum wage.

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Demonstration in front of the Sacramento Capitol, California, to demand protections and guarantees for "uberized" workers, August 28. Rich Pedroncelli / AP

California ratified Wednesday, September 18, a law that should force the giants of the car reservation to requalify the drivers of VTC employees, so that they are better protected. Approved by the California Senate on September 10th, the text must come into effect on 1st January 2020. This decision will be a blow to the flag bearers of the gig economy, the economy of the independent employees who work today without protection or guarantees.

"This law will help solve the problem of the status of workers considered as subcontractors and not as employees, which prevents them from benefiting from basic social protections, such as the minimum wage or health insurance"Gavin Newsom, a Democratic governor, said at the signing of the law.

"The next step is to facilitate the formation of unions that can negotiate better working conditions together. (…) while preserving flexibility and innovation "added the governor of this progressive state, where the seats of many technology giants are installed.

"A huge thank you to all the workers, union members and activists who have spent hours mobilizing to achieve this historic victory", wrote on Twitter a California federation of unions. Lorena Gonzalez, the lawmaker who drafted the law, hailed her ratification as a "Massive victory" for the workers.

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Questioned economic model

The two US leaders of the VTC – Uber and Lyft – oppose any change in status of their drivers, which would cost them more in social charges. "We think California is missing out on a real opportunity to show the way to the rest of the country"replied a spokesman for Uber. The company has been defending for months "A new progressive framework, which would, for the first time, give minimum wage guarantees to self-employed workers, access to social protection and the right to organize among themselves", he added.

Lyft also believes that the reclassification of the drivers would be bad for them as well as for the customers of the service. This requalification "Could result in Lyft treating its employees the way other companies do", says a spokesman. "Users may have to pay more and wait longer, and some areas may not be serviced at all. It would be particularly devastating (…) in areas poorly served by public transport or less densely populatedhe detailed.

The new law threatens the economic models of these two groups, who see the number of races jump as well as users, while their losses accumulate. Uber recorded a record loss of more than $ 5 billion in the second quarter.

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When the bill was passed by the California Senate last week, Uber warned that the new text would not automatically requalify its drivers as employees. It will take a test "To determine whether a worker is qualified as self-employed or as an employee" in the eyes of the law, defended Tony West, the legal director of Uber.

Towards a popular vote

Uber and Lyft claim to have set aside $ 30 million each to hold a popular vote, as permitted by California law, to replace the law with social rights compromises they submitted to the governor. "We are ready to submit this issue to citizens to preserve the freedom and access that drivers and passengers desire"said Lyft.

Drivers are divided between those who would like to enjoy the same security as employees and those who wish to work at the schedules of their choice without the constraints of a full-time job. "If we become employees, they will lose a lot of drivers"says Vondre Adams, Uber driver in San Francisco for six months.

"Uber, it's not a career. But I earn 200 to 300 dollars a day, I have the money right away. I do not want to be paid by the hour, and not to be able to work overtime "explains to the Agence France-Presse this driver, who also enjoys the health coverage of his wife.

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