News & Politics

Uber Says It Will Shut Down in California if Forced to Classify Drivers as 'Full-Time Employees'

(AP Photo/Seth Wenig, File)

Uber says it will be forced to shut down operations for months if it loses a legal battle. The company is appealing a court decision that would define its drivers as full-time employees.

Assembly Bill 5, which passed last year, has forced Uber and other companies into this situation. The bill gave employee status to gig workers like Uber and Lyft drivers, requiring companies to pay overtime and paid time off, among other benefits. The state attorney general sued the companies and a federal judge granted an injunction forcing the companies to comply. The companies have until Monday to appeal.

The union-sponsored legislation would be the death knell for most of the gig economy that depends on independent contractors who are allowed to set their own hours and set their own rates.


Rather than classify drivers as employees, [Uber Technologies CEO Dara] Khosrowshahi has advocated for what he calls a “third way” that would maintain drivers’ independence while allowing companies to provide some protections without risking being viewed as full-time employers. In a New York Times op-ed ahead of the court ruling, Khosrowshahi said gig companies such as Uber could pay into a fund that workers could dip into for paid time off or health-care benefits based on the number of hours they work.

Khosrowshahi said on Wednesday that his Plan B if Uber can’t win on appeal would be to temporarily pause service in California. While he said Uber would later resume service in the state, it would likely be more centered in cities, which could mean limited availability in less concentrated areas such as suburbs.

It would also mean fewer drivers working fewer hours and being forced to charge a set rate for their services. The only difference between a taxi or limo service and Uber will be the name.

Khosrowshahi emphasized that pausing service in the state would leave thousands of drivers without the income they would typically earn from Uber. Still, ridership has been down during the pandemic anyway, which the judge said made the injunction come at what is perhaps “the least worst time” for Uber and Lyft to adjust their business models.

Becerra said in an interview on CNBC on Tuesday that he was unconcerned about the potential for Uber to leave the state as a result of the order.

“Any business model that relies on shortchanging workers in order to make it probably shouldn’t be anywhere, whether California or otherwise,” he said.

Who says Uber and Lyft “shortchange” workers? The unions say that because there’s no paid overtime or sick leave, or parental leave, or any other benefit given to the full-time employee of a company. There also aren’t any insane work rules, greedy union bosses, and corrupt union leaders. This is all about trying to force Uber, Lyft, and other gig companies to unionize their full-time employees.

As an independent contractor myself, I fear this law being applied on a national level. I choose not to work for a company — any company. Salem Media gives me the freedom to write pretty much what I want and how often I want. That’s a freedom few writers in the world enjoy.

I’ll never get rich writing for anyone. But I make a good living doing what I do and wouldn’t trade it for any other job. As long as Salem sticks to the contract I signed, so will I.

And I don’t need any damned government telling me otherwise.

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