Uber CEO: We’re looking at all our options if Prop 22 doesn’t pass

Uber CEO Dara Khosrowshahi.

James Martin/PJDM

Uber CEO Dara Khosrowshahi mentioned Tuesday that if the ride-hailing firm has to reclassify its drivers as workers in California, it will do its finest to regulate. And a type of changes might be exiting the state.

“We’re taking a look at all of our choices,” Khosrowshahi mentioned throughout the Wall Street Journal Tech Live convention on Tuesday. “We’re going to do our greatest to function in California.”

The CEO’s statements come as the company is battling California over the standing of its drivers and supply individuals. After the state handed the legislation AB5 final 12 months, which requires gig workers to be reclassified as employees, Uber, Lyft, DoorDash, Instacart and Postmates launched a $188 million ballot measure campaign to get exempted from the legislation. The poll measure, Proposition 22, might be determined by California voters on November 3. 

This battle between the gig financial system firms and state regulators is more likely to have nationwide implications. Different states, like Washington, Oregon, New York and New Jersey, are mulling related laws. For regulators, it boils right down to creating extra labor protections for gig staff. As impartial contractors, these staff do not have minimal wage, healthcare, sick go away and incapacity insurance coverage, even when they work full time.

Over the previous week, drivers against Proposition 22 have rallied in cities across California holding press conferences and automobile caravan protests. They are saying the poll measure will “lock” them into “sub-minimum wages” and it is essential that it does not move.

“We is not going to permit these billion greenback firms to purchase their very own legal guidelines,” Luz Laguna, a Los Angeles-based Uber driver and organizer with driver advocacy group Cellular Employees Alliance, mentioned in an announcement. “The voters we have talked to are standing with staff, not Silicon Valley executives.” 

This is not the primary time Uber has floated the concept of leaving California if made to reclassify drivers as workers. After the state issued an injunction in August requiring the businesses to reclassify their staff, Uber and Lyft mentioned they’d suspend operations in the state

The injunction stemmed from a lawsuit the state filed against Uber and Lyft in May, which mentioned the businesses had violated AB5 and “exploited lots of of 1000’s of California staff” by misclassifying drivers as impartial contractors. Simply hours earlier than the injunction went into impact, a choose issued a stay on the order till later this 12 months. 

On Tuesday, Khosrowshahi did not outright say that Uber would pull out of California if Proposition 22 failed, however as a substitute mentioned he is taking a look at all situations, together with suspending operations. 

Khosrowshahi mentioned that if the poll measure does not move and Uber stays, he expects trip costs to extend, particularly in rural areas. He added that driver earnings are the vast majority of Uber’s prices. Nonetheless, he mentioned he is hopeful Proposition 22 will win.

“We’re standing on the aspect of proper right here,” Khosrowshahi mentioned. “And normally the proper aspect wins.”

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Dara Kerr