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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.

Microsoft wants to replace artists with AI

Better Zoom calls, simpler email attachments, smart iPhone cases and other patents from Big Tech.

Turning your stories into images.

Image: USPTO/Microsoft

Hello and welcome to 2021! The Big Tech patent roundup is back, after a short vacation and … all the things … that happened between the start of the year and now. It seems the tradition of tech companies filing weird and wonderful patents has carried into the new year; there are some real gems from the last few weeks. Microsoft is trying to outsource all creative endeavors to AI; Apple wants to make seat belts less annoying; and Amazon wants to cut down on some of the recyclable waste that its own success has inevitably created.

And remember: The big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Why gig companies should be scared of a Biden administration

A divided government wouldn't stop Biden from classifying gig workers as employees. Here's how it could happen.

Biden officials are likely to try to force companies like Uber and Lyft to pay their drivers federal minimum wage and empower gig workers to unionize.

Image: Dan Gold/Unsplash

Forget regulating Big Tech: Gig economy companies could face the industry's most aggressive government regulation during a Biden administration.

Tech lobbyists and labor experts told Protocol that gig companies are gearing up for an expensive, existential battle with the Biden administration. They know that an antagonistic Biden Labor Department has the ability to override state efforts to limit gig workers' rights, and experts described to Protocol how that could play out.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

Politics

You may not know these tech Democrats. Now you need to.

These are the people who will be at the frontlines of the tech industry's efforts to influence an entirely new Washington.

Airbnb's Chris Lehane, Amazon's Jay Carney, Apple's Lisa Jackson and Uber's Tony West are tech Democrats you need to know now that Joe Biden is president-elect.

Image: Pupkin8r /Protocol

Now that Joe Biden has been elected to the presidency, it's time to update your contacts.

We're entering a new phase in Washington, and that means there are new power players who merit attention. Over the coming months, tech Democrats with ties to Bidenworld will help shape the future of the industry, one friendly phone call at a time.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

People

The right-to-repair movement has even bigger plans for 2021

iFixit CEO Kyle Wiens comes on the Source Code Podcast to talk cars, iPhones, repairs and more.

A new car-repair ballot measure in Massachusetts could be the beginning of a slew of right-to-repair laws in the next year.

A lot of races in the 2020 election were close, but one important one wasn't: Question 1 in Massachusetts, which "allows car owners to access and share data generated by the operation of the vehicle with independent repair shops." It's basically right-to-repair legislation and it passed with just shy of 75% of the vote.

Kyle Wiens, the CEO of iFixit, has been at the front of the right-to-repair fight for years, working across industries to make it easier for people to fix their own stuff and for mechanics and repair professionals to keep working. He was thrilled to see Question 1 pass by such a wide margin and is hopeful that it's a sign of good things to come.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

People

How the 'Uber of trucking' is navigating a new world

Convoy founder and CEO Dan Lewis on the "aggressive reshuffling" of how freight moves around the country.

Convoy matches truckers and companies that need to ship their goods.

Photo: David Paul Morris/Bloomberg via Getty Images

The coronavirus pandemic has made life complicated for Uber — and for the "Uber of trucking," Convoy. Supply chains have crumbled and collapsed; demand has shifted dramatically (grocery stores need more food, restaurants less); and safety concerns have forced changes in the way that drivers and shippers work.

Convoy founder and CEO Dan Lewis says his company's understanding of the "shape of the network" is helping it navigate the storm — and helping shippers and truckers work as efficiently as possible in an unpredictable world.

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Kevin McAllister

Kevin McAllister ( @k__mcallister) is an associate editor at Protocol, leading the development of Braintrust. Prior to joining the team, he was a rankings data reporter at The Wall Street Journal, where he oversaw structured data projects for the Journal's strategy team.

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