Uber and Postmates sue to block new California labor law

Ride-share company Uber and on-demand meal delivery service Postmates sued Monday to block a broad new California law aimed at giving wage and benefit protections to some groups of workers who are currently considered independent contractors. The lawsuit, filed in U.S. court in Los Angeles, argues that the law set to take effect Wednesday violates federal and state constitutional guarantees of equal protection and due process.

Uber said it will try to link the lawsuit to another legal challenge filed in mid-December by associations representing freelance writers and photographers. The California Trucking Association filed the first challenge to the law in November on behalf of independent truckers.

“This has thrown my life and the lives of more than a hundred thousand drivers into uncertainty,” ride-share driver Lydia Olson wrote in a Facebook post cited by Uber.

Postmates driver Miguel Perez called on-demand work “a blessing” in a Medium post published by Postmates. He said he used to drive a truck for 14 hours at a time, often overnight.

“Sometimes, when I was behind the wheel, with an endless shift stretching out ahead of me like the open road, I daydreamed about a different kind of job —  a job where I could choose when, where and how much I worked and still make enough money to feed my family,” he wrote.

The lawsuit contends that the law exempts some industries but includes ride-share and delivery companies without a rational basis for distinguishing between them. It alleges that the law also infringes on workers’ rights to choose how they make a living and could void their existing contracts.

“This lawsuit is an effort to preserve on-demand work opportunities while urging lawmakers, organized labor, and Governor Newsom to return to the table,” Postmates said in a statement Monday. “We need to pursue every possible avenue to make progress, and our comprehensive approach to realizing a modern, gig safety net demands being working partners, not sparring partners, with organized labor; continuing to engage the Legislature; talking to voters about a new safety net for on-demand workers; and heeding the Governor’s call to find a better way.

Democratic Assemblywoman Lorena Gonzalez of San Diego countered that she wrote the law to extend employee rights to more than a million California workers who lack benefits, including a minimum wage, mileage reimbursements, paid sick leave, medical coverage and disability pay for on-the-job injuries.

She noted that Uber had previously sought an exemption when lawmakers were crafting the law, then said it would defend its existing labor model from legal challenges. It joined Lyft and DoorDash in a vow to each spend $30 million to overturn the law at the ballot box in 2020 if they don’t win concessions from lawmakers next year.

“The one clear thing we know about Uber is they will do anything to try to exempt themselves from state regulations that make us all safer and their driver employees self-sufficient,” Gonzalez said in a statement. “In the meantime, Uber chief executives will continue to become billionaires while too many of their drivers are forced to sleep in their cars.”

In a September interview with CBS News transportation correspondent Kris Van Cleave, Uber CEO Dara Khosrowshahi said, “We think that AB5 will be decided in the courts and we don’t think that AB5 is gonna establish that our drivers are full-time employees, we are a marketplace for our drivers.”

“That said, we do think the societal expectations have changed, and we do think that our drivers, the number one reason they wanna drive with us is flexibility and we think we can retain that flexibility but also give drivers minimum at ease comfort, we can give them health care benefits etc. and we can give them a voice in where their service goes,” Khosrowshahi added. “We have offered that in dialogue with legislature and we’re hoping we can get to a win-win solution.”