No, not yet. As of September 2019, both companies are not required to carry Workers’ Compensation Insurance because they are still classifying their drivers’ as independent contractors, not employees.
Uber and Lyft are the top two Transportation Network Companies. TNC’s are part of the “gig economy”. The gig economy is made up a workforce that is uses temporary contracts, short-term arrangements, and where independent contracting is customary. Transportation Network Companies (TNC’s) have taken over most of the ridesharing in many markets. Subsequently, Uber and Lyft are in the center of the debate on whether TNC drivers are independent contractors or employees. The agreements that the TNC drivers sign plainly state that the drivers are independent contractors. But history has shown that California courts, and courts in general, tend to value the actual conduct of the parties than what is stated in any signed agreement between the parties.
In 2018, a unanimous decision by the California Supreme Court raised questions about how workers are classified. What followed was California Assembly Bill 5, which limits how workers are classified as independent contractors. It was introduced by Assemblywoman Lorena Gonzalez on December 3, 2018. The Assembly voted in favor of the bill in September of 2019 (56-15). The Senate also voted in favor of AB 5 shortly afterward (29-11). It then went back to the Assembly for concurrence to approve all the amendments. Governor Gavin Newsom signed the bill on September 18, 2019 and will become law January 1, 2020.
Uber and Lyft are expected to put up a fight and they have the money to do so. Lyft is a public company operating in 640 cities in the United States, 9 cities in Canada with an estimated worth of 29 billion dollars. Uber, the first ridesharing company, is also a public company operating in 80 countries with an estimated worth of 76 billion dollars.
Uber and Lyft have said they will keep the classification of their drivers as independent contractors on January 1 and are expected to pour tens of millions of dollars for a ballot initiative to keep it that way. Uber is circulating a petition that says changing their driver’s designation from an independent contractor to an employee could radically change the rideshare experience that we’ve come to depend on, e.g., the ability to connect the driver to the rider which would translate to longer wait times. Lyft issued a similar admonition in its petition. It states that if their drivers are classified as employees, the dependability of ridesharing in California could be disrupted, e.g., longer waits; and that hundreds of thousands of Lyft drivers in California could find themselves looking for other work.
If Uber and Lyft are eventually forced to classify their drivers as employees, their drivers will receive unemployment benefits, social security, minimum wage, overtime, sick leave, and workers’ compensation insurance. If this happens, when a driver is injured while working for either company, they will be able to file a workers’ compensation claim. If their claim is accepted, they may be entitled to medical care, temporary disability benefits during the healing phase of the injury, permanent disability benefits, medical mileage to and from doctors’ appointments, and a voucher for retraining if the injury prohibits them from continuing in their usual and customary occupation, and in California, a $5,000 return to work benefit.
Sacramento Workers’ Compensation Lawyer
Hope this answers some questions you may have about workers’ compensation insurance for Uber and Lyft drivers. For any additional questions please call The Law Office of Alice A. Strömbom at 916-444-7557 for your free consultation. We’re here for you.
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