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Uber Slammed -- From California to Canada

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Canada’s Supreme Court gave UberEats driver the green light for a class action lawsuit to recognize drivers as employees, and Uber has more trouble in California

Santa Clara, CAUber and Lyft are getting slammed, from California to Canada. In May, California sued the ride-hailing companies claiming they misclassified their drivers as independent contractors under the state’s new labor law, Bill AB5. North of the border, the Canadian Supreme Court has allowed Uber drivers to forge ahead with a class action lawsuit that will classify them as employers rather than independent contractors.

Ride-Hailing in Canada


In a ruling on June 26, the Supreme Court of Canada upheld a decision from the Ontario Court of Appeal that cleared the path for a class action lawsuit filed by a Toronto driver for UberEats, which delivers food from restaurants to customers at home—a service that likely did a brisk business during the pandemic. Plaintiff David Heller argues that Uber drivers are employees and they are entitled to protections under Ontario’s Employment Standards Act.

According to the Canadian Press, Heller earns about $400 to $600 a week before paying taxes and expenses. Using his own vehicle and working 40 to 50 hours a week, he can make approximately $21,000 and $31,000 annually. Heller says this works out to $10 to $12 an hour, while the minimum wage in Ontario is $14 an hour.

The California Public Utilities Commission and Uber/Lyft Drivers


In another blow to Uber, the California Public Utilities Commission (CPUC) has ruled that “TNC (transportation network companies) drivers are presumed to be employees and the Commission must ensure that TNCs comply with those requirements that are applicable to the employees of an entity subject to the Commission’s jurisdiction.”

“I understand that CPUC has regulatory insight over certain utilities and public safety, such as passenger carriers like limos,” says labor and employment lawyer Michael Warren with the McManis Faulkner law firm. Transportation network companies include Uber, Lyft, and any companies that drive on public roadways.

“The CPUC has said it understands that AB5 is a law, that Uber filed a lawsuit against the state of California and the initiative has been qualified for the November ballot. So everything is in a flux, but in the meantime we are obligated to deem drivers as employees. And they are employees until a higher court –the Supreme Court, appeal court or the people of California—say otherwise.”

Warren goes on. “And with employee classification comes Workers Compensation and other benefits. Obviously this puts more pressure on Uber and Lyft, and they will probably determine whether they can challenge the CPUC, and on what basis. The goal here, I think, is to get them to November.”  (Warren is referring to the national election day –below.)

Warren sees this ongoing battle as a “large political chess game with high stakes”.

Currently, consumers appear to approve of the status quo. “Whether they are swayed by arguments to the contrary remains to be seen, but there could be litigation afterwards to challenge it,” adds Warren. “Of course if the people vote ‘Yay” it will put Uber and Lyft in a better legal position. Uber and Lyft are banking on a high turnout on our national Election Day, but can they challenge CPUC and on what basis? “

Vote to Repeal AB5


Uber and Lyft are counting on winning the November initiative that would repeal AB5. And they are heavily investing. Uber is not only giving its drivers election day off , Uber Eats will be “feeding people in line to vote,” said Uber CEO Dara Khosrowshahi, “The feel-good, get-out-the-vote announcement came three days after Uber drivers paraded outside Khosrowshahi’s San Francisco home, admonishing him for throwing money at a major ballot initiative in California to exempt Uber from the state’s new AB5 law aimed at elevating the status of gig workers,” reported Politico.com.

The ballot initiative, known as the California App-Based Drivers Regulations Initiative, is on the ballot in California as an initiated state statute on November 3, 2020. It would consider app-based drivers to be independent contractors and enact several wage and labor policies that would affect app-based drivers and companies.

This means that the ballot measure would override AB5 on the question of whether app-based drivers are employees or independent contractors.

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