Logo of Phnom Penh Post newspaper Phnom Penh Post - Uber sues state over gig-economy labour law

Uber sues state over gig-economy labour law

Content image - Phnom Penh Post
Uber warned earlier this year that it would oppose any change of status for its drivers, which will cost the company extra in social security costs. Josh Edelson/AFP

Uber sues state over gig-economy labour law

Ride-hailing giant Uber and delivery company Postmates have filed a lawsuit against the state of California, claiming a new law that would treat gig-economy freelancers as employees is unconstitutional.

The legislation, known as Assembly Bill 5 and due to go into effect on Wednesday, would mean that – under certain conditions – independent contractors are classified as employees and granted the minimum salary and health insurance benefits that entails.

This would include drivers for both Uber and Postmates.

“Plaintiffs bring this lawsuit to protect their constitutional rights and defend their fundamental liberty to pursue their chosen work as independent service providers and technology companies in the on-demand economy,” said the lawsuit filed on Monday.

Uber warned earlier this year that it would oppose any change of status for its drivers, which will cost the company extra in social security costs.

In the suit, Uber and its co-plaintiffs argue the law targets independent service providers while exempting direct salespeople, travel agents, construction truck drivers and commercial fishermen.

“There is no rhyme or reason to these nonsensical exemptions,” it said.

Uber and its American rival Lyft have each put aside $30 million to organise a referendum, allowed under Californian law, to replace the legislation with a compromise on social rights that has been put before the state Governor.

Drivers are divided between those who want the same security as employees and those who want the flexibility of being able to choose the hours they work.

The gig economy has given drivers “opportunities to earn money when and where they want, with unprecedented independence and flexibility,” the lawsuit said.

California is one of Uber’s key markets, with around nine percent of its sales on ride and delivery platforms made in the state, CNBC said, citing the company’s head Dara Khosrowshahi.

The new law comes as the ride-hailing company is also facing legal clampdowns on its operations elsewhere.

A German court ruled earlier this month that Uber – which relies heavily on the use of vehicles from local car rental companies in the country – must have a rental car licence of its own to operate.

In November, London’s transport authority refused to renew the company’s operating licence because of safety and security concerns.

That came as a big blow to Uber, which has about 3.5 million customers and some 50,000 drivers in the British capital. It has said it will appeal the decision.

MOST VIEWED

  • Ministry orders all schools, public and private, to close for SEA Games

    From April 20 to May 18, all public and private educational institutions will be closed to maintain order and support Cambodia's hosting of the 32nd SEA Games and 12th ASEAN Para Games, said a directive from the Ministry of Education, Youth and Sport. Cambodia will host the

  • Newest horror film showcases unique Khmer culture, identity

    At first glance, the trailer to new horror sensation The Ritual: Black Nun looks like a western-produced feature film. As the story reveals itself to the viewers, it becomes clearer that this is a Khmer film, with a strong Cambodian identity and close links to

  • Almost 9K tourists see equinox sunrise at Angkor Wat

    Nearly 9,000 visitors – including 2,226 international tourists – gathered at Angkor Wat on March 21 to view the spring equinox sunrise, according to a senior official of the Siem Reap provinical tourism department. Ngov Seng Kak, director of the department, said a total of 8,726 people visited Angkor Wat to

  • Angkor Beer strengthens national pride with golden new look and fresher taste

    Angkor Beer – the "Gold of Angkor" – has a new look, one that is more stylish and carries a premium appeal, as well as a fresher taste and smoother flavour, making it the perfect choice for any gathering. Angkor Beer recently launched its new design, one

  • Water supply authority assures public shortages over early ‘24

    The Phnom Penh Water Supply Authority (PPWSA) asked for understanding from Phnom Penh residents in some communes where water pressure is weak. They assured residents that all supply issues will be resolved by early 2024, but have suggested that residents use water sparingly in the meantime.

  • Khmer ballet documentary debuts April 1

    A new documentary, The Perfect Motion, or Tep Hattha in Khmer, will premiere to the public on April 1. The documentary film follows two intertwined storylines: the creation of a show called Metamorphosis by the late Princess Norodom Buppha Devi (her very last production) and the