Ride-hailing company Uber Technologies Inc (NYSE: UBER) is teaming up with Postmates in a last-minute effort to challenge a new California law concerning gig workers set to kick in Wednesday.
California law will mandate ride-hailing or food delivery companies treat drivers as employees as part of a new law which will take effect in the new year. Just days before the law change, Uber and Postmates joined two drivers who filed a lawsuit in federal court against California's attorney general Xavier Becerra and the state of California.
The lawsuit argues California's new law violates constitutional guarantees of equal protection and due process, according to The Wall Street Journal.
The author of the new law, Lorena Gonzalez, was quoted by WSJ as saying the "one clear thing we know" is Uber will "do anything to try to exempt themselves" from laws meant to make the public safer and ensure employees are "self-sufficient."
Why It's Important
Uber and Postmates are joined by a handful of other entities who rely on freelance or gig workers and are taking legal action. For example, the California Trucking Association argued in its own lawsuit in November that new federal law relating to commerce and transportation implies California's new law doesn't apply to its business.
An Uber spokesman told WSJ the company won't comment beyond the lawsuit while Postmates said it hopes to be invited to participate in labor talks with California's government to create a better system for gig workers.
Uber's stock traded around $29.68 per share at time of publication.