California struck a blow against Uber
Lyft and Uber claim AB-5 could cripple the ride sharing and delivery industry, and cause rates to go up. However, according to Superior Court Judge Ethan of Schulman of San Francisco, both companies should have begun incurring the costs needed for the restructuring of their business models over two years ago when the California Supreme Court decided unanimously in the Dynamex
Of course, Uber and Lyft aren't taking this lying down. Both have a week left to appeal and are putting their effort into doing so, while also reminding voters to vote "yes" for Proposition 22 in November, which would override AB-5 and make app-based transportation and delivery companies exempt from considering their drivers as employees. While a vote "yes" would support keeping their drivers as independent contractors, it would also adopt labor and wage policies specific to app-based drivers and companies. A vote "no" would simply allow AB-5 to decide whether app-based drivers are classified as employees.
There seems to be a bit of a divide on which would be better for both the workers and the company, but both companies have been struggling in the pandemic. Lyft has reported a Q2 revenue of $339 million, which is a 61% drop compared to last year. Active ridership has also dipped 60% due to the coronavirus pandemic, resulting in an overall loss in Lyft's second quarter this year compared to last, mainly due to drivers conducting fewer trips. Net losses amounted to approximately $437 million, compared to $644 million in the same quarter as last year. Uber has also felt the hit from the virus as less people are traveling, and, while they are suffering a little, they haven't dropped as low as Lyft. Uber has their takeout and grocery delivery to fall back on, unlike Lyft.