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Tech & Science Uber Loses Early Challenge to California Gig-Worker Law

01:30  11 february  2020
01:30  11 february  2020 Source:   msn.com

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Investors are watching the California dispute closely, as companies subject to the law would be required to provide higher pay and other benefits such as medical insurance - likely upending the gig-economy business model. Uber Loses Early Challenge to California Gig - Worker Law .

California Attorney General Xavier Becerra argued the constitutional challenge to the law by Uber and Postmates will fail because the state legislature has a prerogative to stop the gig economy’s exploitation of workers . An Uber spokesman and a lawyer for California declined to comment after

a group of people walking down the street: A passenger waits for an Uber Technologies Inc. vehicle at the LAX-it centralized pickup area at Los Angeles International Airport (LAX) in Los Angeles, California, U.S., on Tuesday, Oct. 29, 2019. On Tuesday, Los Angeles International Airport's ban on Uber, Lyft, and taxi curbside pickup went into effect while the airport ramps up work on its modernization program.© Bloomberg A passenger waits for an Uber Technologies Inc. vehicle at the LAX-it centralized pickup area at Los Angeles International Airport (LAX) in Los Angeles, California, U.S., on Tuesday, Oct. 29, 2019. On Tuesday, Los Angeles International Airport's ban on Uber, Lyft, and taxi curbside pickup went into effect while the airport ramps up work on its modernization program.

Uber Technologies Inc. failed to persuade a judge to shield its drivers from California’s gig-worker protection law while the company challenges the landmark measure in court.

A federal judge in Los Angles rejected a request by Uber and Postmates Inc. to temporarily block enforcement of Assembly Bill 5, which aims to convert gig-economy workers from independent contractors to employees with benefits. Uber and Postmates didn’t ask the judge to shield other companies from the law.

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The California Trucking Association filed the first challenge to the law in November on behalf of independent truckers. The latest challenge includes two independent workers who wrote about their concerns with the new law . “This has thrown my life and the lives of more than a hundred thousand

Uber attorneys argued earlier this year that the law doesn’t apply to the company because drivers’ work falls “outside the usual course of Uber ’s business,” which they Labor activists have agitated in favor of the law , saying that it provides drivers and other gig workers with a living wage and benefits.

U.S. District Judge Dolly M. Gee had signaled during a Feb. 7 hearing that she would deny the preliminary injunction sought by Uber and Postmates.

Gee concluded in an order posted Monday that the public interest weighs “in favor of permitting the state to enforce this legislation,” while acknowledging the companies’ claim that it poses “irreparable harm” for them.

In the next phase of the case the companies will try to convince the Gee that A.B. 5 violates guarantees of equal protection under the federal and state constitutions. But Gee said in her ruling it’s unlikely that Uber and Postmates will prevail on the merits of their claims.

California Attorney General Xavier Becerra argued the constitutional claims will fail because the state legislature has a prerogative to stop the gig economy’s exploitation of workers.

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Uber and Postmates have filed a lawsuit in an attempt to block California ’s AB5 gig - worker law Groups representing freelance journalists, who will also be affected by the law , filed a lawsuit earlier The California Trucking Association is also challenging AB5 in a lawsuit. In another effort to stymie

Uber said it was reviewing the judge's opinion and considering whether to pursue an appeal. The company in a statement called the California law The bill strikes at the heart of the " gig economy" business model of technology platforms like Uber , Postmates, Lyft (NASDAQ:LYFT) , DoorDash and

Uber didn’t immediately respond to a request for comment on the ruling.

As multiple court battles play out, gig companies are working on other fronts to rein in the law. Uber, Lyft, Postmates, Instacart and DoorDash have pledged $110 million for a ballot measure to change A.B. 5.

Signed by California Governor Gavin Newsom in September, A.B. 5 says workers can generally only be considered contractors if they perform duties outside the usual course of a company’s business. Uber filed its suit Dec. 30, two days before A.B. 5 took effect.

The case is Olson v. State of California, 2:19-cv-10956, U.S. District Court, Central District of California (Los Angeles).

(Updates with judge’s reasoning in fourth paragraph.)


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