US: Uber considers ways around California’s AB5

When California state legislators passed the controversial AB5 law for gig workers, Uber took action to revise its app with a stealthy plan dubbed “Project Luigi,” The Washington Post reported on Monday (Jan. 6). 

The bill was signed by Governor Gavin Newsom in September, and went into effect on Jan. 1. It essentially redefines Uber drivers and gig economy workers from independent contractors to full-fledged employees. 

Uber Spokesman Noah Edwardsen told reports that the company is “making a number of changes to the Uber marketplace, which tens of thousands of California drivers use to find flexible work.” He added that the company is “confident” that drivers have the right classification, and revising the Uber app “will further strengthen drivers’ independence, and preserve their ability to work when, where and how they want.”

To tackle AB5, Thuan Pham, Uber’s chief technology officer, gathered volunteers from legal, marketing, technology and operations for Project Luigi, a “critical project around AB5,” according to an October email seen by The Washington Post. 

Internal documents and sources familiar with Uber indicated that Project Luigi sought to revamp the app with new features, such as seeing estimated trip fares in advance, and declining riders without a penalty. Uber hopes these changes will help to convince lawmakers that its drivers are self-employed independent contractors.

“Obviously, Uber wants to make the case that drivers are operating on their own because, without that, they have no argument on their worker classification,” said Bradley Tusk, an Uber investor and former political strategist for the firm. He added that the ridesharing company wants “a back-up plan,” and is likely “worried about losing.”

Under AB5, gig-based companies are required to treat their workers as employees, unless they can prove that their contractors are truly independent. It also outlines wage floors, benefits and workers’ protections. 

Though the new law is intended to raise wages and add benefits like unemployment insurance, drivers of ridesharing and food delivery companies aren’t so sure they will benefit. About 70 percent of the 500-plus Uber and Lyft drivers surveyed in September said they were “extremely” or “very” satisfied with their experiences on the platform.