Northern California Record

Tuesday, February 25, 2020

Stanford Law professor: Uber, Postmates in ‘crosshairs’ of gig economy law, lack evidence


By Rich Peters | Jan 15, 2020

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LOS ANGELES – Uber and Postmates together filed a lawsuit against the state of California over its gig economy law Assembly Bill 5, calling the new bill “unconstitutional,” but some experts don’t see the ride-hailing giant and goods courier prevailing.

“I think that complaint is really predicated upon a number of theories – at least one of which made up out of complete thin air – and that is that they have … workers who indicate that they’d be injured by reclassification and that they would lose the flexibility that they have, but there’s no showing that they will lose their flexibility,” Stanford Law School professor William B. Gould IV told the Northern California Record. “And I know they’re only saying this to the public and to the workers, but in court of law you have to have evidence and on this issue they have none.”

The suit, filed Dec. 30 in the U.S. District Court for the Central District of California, is just one of several similar complaints that have been filed over the past months by companies, industries and associations pushing for exemption from the bill, which took effect on Jan. 1.

“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,” opens the complaint. “AB 5 is an irrational and unconstitutional statute designed to target and stifle workers and companies in the on-demand economy.”

In this particular lawsuit, the companies allege that the new bill specifically targets “modern app-based” ride and delivery companies while exempting others, violating equal protections.

“Uber is joining a growing number of industries (e.g. truckers, freelance journalists) to legally challenge the biased legislative process that produced AB 5,” said Uber in a statement sent to the Northern California Record. “The process was totally arbitrary, carving out a seemingly random set of industries while the bill’s proponents were explicit about their intention to unfairly target app-based companies such as Uber.

“Multiple credible outside observers have publicly noted that Uber, Postmates and other gig economy companies were ‘targeted’ by AB 5, which we believe violates our access to equal protection under the law,” according to the statement.

Other industries are fighting the bill, including truck drivers and journalists.

“AB 5 is a blunt instrument, which is why lawmakers exempted 24 industries, seemingly at random, from its requirements,” said Postmates in a statement to the Northern California Record. “Despite violating equal protection laws under the U.S. Constitution, killing hundreds of jobs in journalism, and jeopardizing on-demand work opportunities, now is not the time to give up or stop talking. Californians deserve a thoughtful, collaborative process to address the 21st century workforce. Not another false choice.”

But Gould does not necessarily see Uber, Postmates or any other ride-hailing, app-based companies having the same success as the rest of the industries fighting the bill.

“They’re clearly in the crosshairs of the legislature, that’s why they’re complaining," Gould said. "So the exemptions don’t seem to be particularly relevant to them and I wonder whether a court will say that they have standing to complain. 

“You never know what a particular judge is going to do in a given situation, but I don’t see them going very far with this,” Gould said.

Ride-hailing companies will be following along closely to the other similar lawsuits against the bill – specifically the case of the independent truckers – hoping to be able to follow their lead in successfully exempting themselves from the highly contested bill.

“This lawsuit is an effort to preserve on-demand work opportunities while urging lawmakers, organized labor, and Gov. (Gavin) Newsom to return to the table,” said Postmates. “We need to pursue every possible avenue to make progress, and our comprehensive approach to realizing a modern, gig safety net demands being working partners, not sparring partners, with organized labor; continuing to engage the Legislature; talking to voters about a new safety net for on-demand workers; and heeding the governor’s call to find a better way.”

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