Uber Technologies Inc. (NYSE:UBER), Lyft Inc. (NASDAQ:LYFT) and DoorDash have announced that they will spend $90 million to fight a bill that will strengthen employment protection for their drivers. The three companies have each contributed $30 million to block a bill that wants them to recognize drivers as employees.
California legislature bill to change the status of tax hailing drivers
California Legislature is almost passing a bill that will require taxi-hailing companies to recognize drivers as employees rather than contractors. An endorsement from the California Governor Gavin Newsom during Labour Day means the time for talk just lapsed.
The companies indicate that changing the legal status of the drivers is a threat to their business. The company has indicated that they will spend the $90 million on a ballot initiative to be exempted from the proposed law.
The bill proposes the ride-hailing companies to treat drivers as employees. This means that the companies will pay them legal minimum wage and they will be entitled to health benefits. The bill sponsored by Assemblywoman Lorena Gonzalez has terrified the companies which fear that the move will hurt businesses.
Gonzalez said that the move by the companies to spend $90 million to fight the law was disingenuous. She said that the companies should instead use the money to improve the lives of the drivers who enable their businesses to run.
Ballot initiative offers more benefits to drivers
The companies have defended their ballot initiative by indicating that it would offer drivers more benefits. They have indicated that drivers will get $21 per each hour booked and they will retain their contact status. The companies indicated that the proposed ballot initiative will safeguard the driver’s ability to create their schedule. On the other hand, the companies will provide health benefits, minimum wage standards as well as collective bargaining rights.
The taxi drivers have regularly complained that the companies sometimes deduct their earnings without reasons. Equally, when they have been kicked off the apps they do not have any recourse.
