Power

A judge ordered Uber and Lyft to convert drivers to employees, but it's not a done deal

The coronavirus pandemic may actually be an ideal time for the companies to reset their business, judge Ethan Schulman argued.

An Uber and Lyft driver in California

A San Francisco judge said Uber and Lyft drivers should be employees.

Photo: Frederic J. Brown/AFP via Getty Images

A San Francisco judge ordered Uber and Lyft to convert their drivers to employees after a "prolonged and brazen refusal to copy with California law."

"Defendants may not evade legislative mandates merely because their businesses are so large that they affect the lives of many thousands of people," wrote San Francisco Superior Court judge Ethan Schulman.

The catch: Schulman stayed the injunction so it won't go into effect for 10 days, giving the companies a window to appeal the ruling. Both are expected to file an appeal and ask for another, longer stay pending that outcome, meaning there could be another protracted legal fight and delay before drivers actually become employees.

Regardless, it's still a symbolic win for the state of California and labor advocates who argue the drivers should be classified as employees. In May, California state attorney general Xavier Becerra sued Uber and Lyft for worker misclassification. In the ruling, the judge sided with Becerra and delivered an injunction forcing Lyft and Uber to comply with A.B. 5, the gig economy law that would convert many independent contractors to employees.

Meanwhile, in addition to their appeals, Uber and Lyft are backing a proposition in the November election that would exempt their businesses from A.B. 5. That may be another monumental test for this contractors vs. employees debate. "Drivers do not want to be employees, full stop," Lyft said in a statement. "We'll immediately appeal this ruling and continue to fight for their independence. Ultimately, we believe this issue will be decided by California voters and that they will side with drivers."

"The vast majority of drivers want to work independently, and we've already made significant changes to our app to ensure that remains the case under California law," Uber said.

While some drivers are against A.B. 5, the judge said that driver surveys did not factor into his decision. "A.B. 5 may be unpopular among some of the Defendants' drivers, but a lawsuit is not a popularity contest," he wrote.

An Uber analysis previously showed that the law could raise rider prices between 20% to 40% in San Francisco and San Diego, and as much as 80% to 100% in other California cities like Palm Springs or Fresno.

Both businesses have also seen demand plunge during the pandemic, but the judge viewed it as an ideal time for both companies to reset their business plans. (Uber disagreed, arguing that state leaders "should be focused on creating work, not trying to shut down an entire industry during an economic depression.")

"Now, when Defendants' business is at an all-time low, may be the best time (or the least worst time) for Defendants to change their business practices to conform to California law without causing widespread adverse effects on their drivers," he wrote.

While nothing changes overnight, the ruling is the most significant decision Uber and Lyft have faced yet. Going forward for the two companies, it's a matter of appealing long enough to find out the outcome of the November ballot measure.

Enterprise

Why Google Cloud is providing security for AWS and Azure users too

“To just focus on Google Cloud, we wouldn't be serving our customers,” Google Cloud security chief Phil Venables told Protocol.

Google Cloud announced the newest addition to its menu of security offerings.

Photo: G/Unsplash

In August, Google Cloud pledged to invest $10 billion over five years in cybersecurity — a target that looks like it will be easily achieved, thanks to the $5.4 billion deal to acquire Mandiant and reported $500 million acquisition of Siemplify in the first few months of 2022 alone.

But the moves raise questions about Google Cloud’s main goal for its security operation. Does Google want to offer the most secure cloud platform in order to inspire more businesses to run on it — or build a major enterprise cybersecurity products and services business, in whatever environment it’s chosen?

Keep Reading Show less
Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at kalspach@procotol.com.

Sponsored Content

Foursquare data story: leveraging location data for site selection

We take a closer look at points of interest and foot traffic patterns to demonstrate how location data can be leveraged to inform better site selecti­on strategies.

Imagine: You’re the leader of a real estate team at a restaurant brand looking to open a new location in Manhattan. You have two options you’re evaluating: one site in SoHo, and another site in the Flatiron neighborhood. Which do you choose?

Keep Reading Show less
Workplace

The tools that make you pay for not getting stuff done

Some tools let you put your money on the line for productivity. Should you bite?

Commitment contracts are popular in a niche corner of the internet, and the tools have built up loyal followings of people who find the extra motivation effective.

Photoillustration: Anna Shvets/Pexels; Protocol

Danny Reeves, CEO and co-founder of Beeminder, is used to defending his product.

“When people first hear about it, they’re kind of appalled,” Reeves said. “Making money off of people’s failure is how they view it.”

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

Elon Musk has bots on his mind.

Photo: Christian Marquardt/Getty Images

Elon Musk says he needs proof that less than 5% of Twitter's users are bots — or the deal isn't going ahead.

Keep Reading Show less
Jamie Condliffe

Jamie Condliffe ( @jme_c) is the executive editor at Protocol, based in London. Prior to joining Protocol in 2019, he worked on the business desk at The New York Times, where he edited the DealBook newsletter and wrote Bits, the weekly tech newsletter. He has previously worked at MIT Technology Review, Gizmodo, and New Scientist, and has held lectureships at the University of Oxford and Imperial College London. He also holds a doctorate in engineering from the University of Oxford.

Policy

Nobody will help Big Tech prevent online terrorism but itself

There’s no will in Congress or the C-suites of social media giants for a new approach, but smaller platforms would have room to step up — if they decided to.

Timothy Kujawski of Buffalo lights candles at a makeshift memorial as people gather at the scene of a mass shooting at Tops Friendly Market at Jefferson Avenue and Riley Street on Sunday, May 15, 2022 in Buffalo, NY. The fatal shooting of 10 people at a grocery store in a historically Black neighborhood of Buffalo by a young white gunman is being investigated as a hate crime and an act of racially motivated violent extremism, according to federal officials.

Photo: Kent Nishimura / Los Angeles Times via Getty Images

The shooting in Buffalo, New York, that killed 10 people over the weekend has put the spotlight back on social media companies. Some of the attack was livestreamed, beginning on Amazon-owned Twitch, and the alleged shooter appears to have written about how his racist motivations arose from misinformation on smaller or fringe sites including 4chan.

In response, policymakers are directing their anger at tech platforms, with New York Governor Kathy Hochul calling for the companies to be “more vigilant in monitoring” and for “a legal responsibility to ensure that such hate cannot populate these sites.”

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Latest Stories
Bulletins