Since the top of the year the gig economy has been thrown into a state of disarray, at least in the US state of California.
The California Assembly Bill also known as AB5 sought to stop the incorrect classification of contract workers in the state.
In August, California Superior Court Judge Ethan Schulman ruled that Uber and Lyft must classify drivers as employees, a preliminary injunction that Uber and Lyft appealed.
That appeal has been successful according to a report from TechCrunch.
This means that Uber and Lyft can continue to classify its drivers as contract workers, while its appeal to overturn the ruling made by Schulman is considered.
“We are glad that the Court of Appeals recognized the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want,” an Uber spokesperson said.
Had this appeal not been granted, Uber and Lyft would have reportedly suspended operations in California.
This is because both Uber and Lyft are alive today because of the way the platforms function. That is to say that a person who needs a ride and a person giving a ride can meet. Reclassifying its drivers as employees would see the likes of Uber needing to hire 50 000 drivers overnight.
During Kara Swisher and Scott Galloway’s Pivot Schooled Podcast, Uber chief executive officer Dara Khosrowshahi lamented the prospect of hiring 50 000 drivers overnight.
“All of our model, everything that we have built is based on this platform that brings earners and brings people who want transportation or delivery together,” the Uber CEO said.
The fight to keep gig economy workers classified as contractors continues in November with the vote on Prop 22 that would classify those workers as independent contractors.
Whether that vote will be successful remains to be seen.[Image – CC 0 Pixabay]