California vs. Ride-share Companies

In September, California approved a bill with the power to reshape the state’s gig economy. Under the new law, companies are required to treat contract workers as employees if they contribute to the company’s core business, among other factors. That means providing them benefits like paid overtime and health insurance.

The new law threatened app-based companies that rely on independent labor, and the state sued Uber and Lyft in May for violating it.

“The perspective of the state is that gig work has become wildly popular, even though it does not have legal recognition in California,” said Kate Conger, who covers technology at The Times, “and the right thing to do is pull those jobs back into a traditional employment model.”

This month, a judge gave the ride-hailing companies until Thursday to comply; the companies appealed the ruling and said they may suspend their services in the state. Before the coronavirus pandemic, California accounted for 16 percent of Lyft’s total rides and 9 percent of Uber’s, The Wall Street Journal reports. The shutdown would be another hit to the businesses, which have seen a nosedive in rides since the virus hit.