A California court has ruled in favor of Uber, in a case brought before it by the ride-hailing company’s drivers. The court on Wednesday denied an application for a temporary restraining order by the state’s Uber drivers, saying the allegation could not be established.
The drivers had last week filed a suit against Uber over what they described as “political Coercion” by the ride-hailing company. Uber has been campaigning for prop. 22, a ballot initiative it intends to use, alongside other ride-hailing companies in California, to fight the AB-5 law that mandates all ridesharing companies to reclassify their drivers as employees.
Against this backdrop, Uber has launched an intense campaign to coerce voters to support the prop.22 initiative. Drivers have however, become the most targeted by the campaign as they alleged intense pressure from the California-based company to vote in support of the initiative, which they said it violates their political rights.
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The drivers last week sued Uber over in-app messages regarding the prop. 22, saying the pressure from the ride-hailing company violates California law protecting their political rights.
The court has ruled that the application for a temporary restraining order cannot be upheld because the drivers could not establish the alleged “political coercion” by the ride-hailing company.
“The application for a temporary restraining order is denied”, Richard Ulmer, Judge of Superior Court of California for San Francisco County, said in his order.
The ruling has taken a measure of Uber’s troubles away, allowing the app-based company to focus on more pressing issues, which includes the gig worker ballot billed for Nov.3.
So far, the companies have pumped $185 million into the ballot initiative, the most expensive proposition in the history of California. For the companies, it is a survival fight. Putting the ridesharing business off the gig model will mean that the companies will have to pay drivers according to the state’s minimum wage, and apply other rules that will spike running cost.
While Uber, Lyft, DoorDash and Instarcat are yet to decide whether to appeal the ruling of last week, the concern of losing at the Supreme Court seems to be pushing the focus on prop. 22.
If the Prop. 22 passes, the ride-hailing companies will continue to treat their drivers as independent contractors, though there would be some concessions on benefits, which involves the minimum wage earnings guarantee based on “engaged time”, the time drivers spent on delivery or conveying a rider, not time spent waiting for gig.
However, the current situation has created a strain on the relationship between Uber and its drivers, who it is counting on to win the ballot on Nov 3.
Uber has been caught up in a very difficult situation in its parent state California, as it is its largest market in the US. The ridesharing company has been weighing its options ever since the AB-5 came into force in May, which includes using a franchise-like model to license its name to fleet operators in the state and avoid employing drivers directly.
The company said it would accept the outcome of the ballot as well as the court rulings, but warned that “rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state.”
In the trial court, the company has argued that drivers are not the core of its business; therefore, the AB-5 law doesn’t apply to them. But the court had dismissed the claim and had ruled against its gig economy that the state said it’s oppressive to drivers and goes against the law.