A federal judge on Monday denied Uber and Postmates a temporary reprieve from California’s controversial gig worker law, a setback for both companies as they scramble to deal with a measure that could upend their business models.
- Uber and Postmates asked for a temporary exemption from the law while they challenge the measure in court.
- U.S. District Judge Dolly Gee denied that request because, she said, the public interest in letting the law stand outweighs the potential harm it could do to the companies.
- AB 5, which was passed last year and went into effect on January 1, 2020, makes it harder for companies to classify their workers as “independent contractors,” meaning that Uber and Postmates would have to make all of their drivers full-time employees if they complied.
- The procedural decision is an early blow for gig companies who have been fighting tooth and nail to get around having to follow the law because it would change their business models and make them more expensive to operate, as shareholders press them to become profitable.
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