• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Skip to navigation
Close Ad

The Spoon

Daily news and analysis about the food tech revolution

  • Home
  • Podcasts
  • Events
  • Newsletter
  • Connect
    • Custom Events
    • Slack
    • RSS
    • Send us a Tip
  • Advertise
  • Consulting
  • About
The Spoon
  • Home
  • Podcasts
  • Newsletter
  • Events
  • Advertise
  • About

Uber and Postmates File a Lawsuit Claiming AB 5 Is Unconstitutional

by Jennifer Marston
December 31, 2019December 31, 2019Filed under:
  • Business of Food
  • Delivery & Commerce
  • Featured
  • Restaurant Tech
  • Click to share on Twitter (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to email this to a friend (Opens in new window)

With California’s Assembly Bill 5 (AB 5) law set to go into effect on January 1, Uber and Postmates have filed a complaint alleging that the new law, which will make it harder for gig economy companies to classify workers as independent contractors, violates constitutional rights.

The complaint, filed Monday in a U.S. District Court, argues that AB 5 violates multiple clauses in the U.S. and California constitutions, including equal protection. The suit points to the “laundry list” of occupations exempted from AB 5, which includes travel agents, grant writers, construction workers, and salespeople, and argues that AB 5 is designed to stifle gig-economy companies and their workers.

“[AB 5] irreparably harms network companies and app-based independent service providers by denying their constitutional rights to be treated the same as others to whom they are similarly situated,” the lawsuit says.

The complaint alleges that AB 5 also violates due process clauses of the Fourteenth Amendment, the Ninth Amendment, and the contracts clause of Article I. It asks for a preliminary injunction against AB 5 while the lawsuit is considered.

AB 5, which expands on a California Supreme Court decision from 2018 known as Dynamex, was signed into law in September by California governor Gavin Newsom. Under the new law, workers are considered employees of a business unless the employer can show they meet certain criteria that would classify them as independent contractors.

The new law would require gig-economy companies like Uber, Postmates, and other food delivery services to give drivers and couriers health insurance, paid time off, and other perks not typically only given to full-time employees.

It would also undercut the entire model on which these companies are built — a model many already call unsustainable for the long term. By some accounts, third-party services will make up 70 percent of all restaurant delivery orders by 2022. But these companies have yet to turn a profit. If AB 5 causes a ripple effect across other states who would sign similar laws into place, it could further erode the possibility of profitability ever happening.

DoorDash, Uber, and Lyft have pledged $90 million to get a 2020 ballot measure passed that would counteract AB 5.


Related

Get the Spoon in your inbox

Just enter your email and we’ll take care of the rest:

Find us on some of these other platforms:

  • Apple Podcasts
  • Spotify
Tagged:
  • AB-5
  • gig worker bill
  • Postmates
  • third-party delivery
  • Uber

Post navigation

Previous Post Two Trends to Watch Out for in 2020: Pop-Ups and Equity Crowdfunding
Next Post Newsletter: From Plant-based Meat to Ghost Kitchens, the Food Tech Trends that Were and Will Be

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Get The Spoon in Your Inbox

The Spoon Podcast Network!

Feed your mind! Subscribe to one of our podcasts!

Impulse Announces Its Battery-Integrated Cooktop Becomes First Certified to Applicable UL Safety Standards
Tasting Cultivated Seafood in London’s East-end
After Leaving Starbucks, Mesh Gelman Swore Off The Coffee Biz. Now He Wants To Reinvent Cold Brew Coffee
Brian Canlis on Leaving an Iconic Restaurant Behind to Start Over in Nashville With Will Guidara
Food Waste Gadgets Can’t Get VC Love, But Kickstarter Backers Are All In

Footer

  • About
  • Sponsor the Spoon
  • The Spoon Events
  • Spoon Plus

© 2016–2025 The Spoon. All rights reserved.

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube
loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.