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Rideshare firms win right to ignore minimum wage, overtime, worker compensation laws in US

Uber Canada’s head office in Toronto. Photo: Taxi News

 Uber Technologies shares are expected to head higher this week after a United States court allowed it and other ride-sharing and deliver app companies like Lyft, DoorDash and Grubhub to treat their workers as independent contractors rather than employees, reports Oliver Haill of financial site Proactive.

Despite many worker groups opposing the measure for denying them nearly all employee rights, including sick leave, a Californian district court of appeal ruled that the labour proposal known as Proposition 22 was largely constitutional, Haill wrote on March 13th.  This overturned a decision by another California court last year that the initiative violated the state’s constitution.

“The ride-share companies are now exempted from standards that apply to all other employers, allowing them to ignore certain minimum wage, overtime and worker compensation laws,” noted Haill.

Gig economy companies such as Uber and Lyft contributed more than US$220 million dollars  to the campaign to get voters to pass Proposition 22.

The California court opinion said that the legal proposal “does not intrude on the Legislature’s workers’ compensation authority or violate the single-subject rule.”

In a statement, Uber’s legal chief Tony West said: “Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22. Across the state, drivers and couriers have said they are happy with Prop 22, which affords them new benefits while preserving the unique flexibility of app-based work,” Haill noted.

In Ontario, Premier Doug Ford and Labour Minister Monte McNaughton introduced legislation in 2022 which essentially created a “third category” of workers who are not employees or independent contractors. Workers in these categories are not paid for wait time, down time, or time spent between clients.