Date Published: 2020-04-08 06:51:03+00:00
Date Published: 2020-08-25 05:44:51+00:00
Uber would likely shut down temporarily for several months if a court does not overturn a recent ruling requiring it to classify its drivers as full-time employees, CEO Dara Khosrowshahi said in an interview with Stephanie Ruhle on Wednesday on MSNBC.
“If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly,” Khosrowshahi said.
Uber and rival Lyft both have about a week left to appeal a preliminary injunction granted by a California judge on Monday that will prohibit the companies from continuing to classify their drivers as independent workers. Following the order will require Uber and Lyft to provide benefits and unemployment insurance for workers.
California’s attorney general and three city attorneys brought the lawsuit against the companies under the state’s new law, Assembly Bill 5, that aims to provide benefits to gig workers core to a company’s business by classifying them as employees. In his decision granting the preliminary injunction, the judge rejected the notion that drivers should be considered outside the course of the companies’ businesses, calling the logic “a classic example of circular reasoning.”
Uber and Lyft both said they would appeal the ruling during the 10-day period before it goes into effect.
Rather than classify drivers as employees, Khosrowshahi has advocated for what he calls a “third way” that would maintain drivers’ independence while allowing companies to provide some protections without risking being viewed as full-time employers. In a New York Times op-ed ahead of the court ruling, Khosrowshahi said gig companies such as Uber could pay into a fund that workers could dip into for paid time off or health-care benefits based on the number of hours they work.
Khosrowshahi said on Wednesday that his Plan B if Uber can’t win on appeal would be to temporarily pause service in California. While he said Uber would later resume service in the state, it would likely be more centered in cities, which could mean limited availability in less concentrated areas such as suburbs.
Uber’s critics note that there is nothing stopping Uber from continuing to provide drivers with the flexibility to set their own schedules under AB5. But the company rejects this notion, arguing that no company in California or elsewhere lets employees set their own hours.
“We’re absolutely going to be outspent by astronomical proportions,” Vanessa Bain, co-founder of Gig Workers Collective, told Swisher and Galloway prior to Khosrowshahi’s interview. “We don’t have the capital, we don’t have the resources to be able to spend anywhere near what these companies are spending to get Prop 22 passed.”
Swisher proposed adding a driver representative to Uber’s board to help driver better hold the company accountable. Khosrowshahi seemed to suggest it was possible, citing German companies that have an employee representative on their boards, which he called “cool.” But such a thing would only be possible “in a different world,” he said.
“I do think we have the system that’s optimized... it’s called capitalism,” Khosrowshahi said. “It’s not called labor-ism. It’s not called socialism. It’s capitalism and it’s a system that’s built to maximize shareholder value and capital.
And if that’s the only input, then you’re going to keep getting the same results going forward that you got going backward. So these kinds of systemic changes, you know, I’m game for it. I don’t want yesterday’s capitalism 20 years ago to be the same 20 years from now.”
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