(Reuters) – Uber Technologies Inc. and Lyft Inc. are jointly spending nearly $ 100 million on a California polling initiative in November to repeal a state law that would force them to classify drivers as employees.  However, that sum looks less enormous than the potential costs of complying with the existing law, according to a Reuters analysis. although they drastically reduced the number of drivers on their platforms, a Reuters calculation showed.
Using a recently published Cornell University driver's study in Seattle as a basis, Reuters estimated that each full-time driver would cost the company an average of an additional $ 7,700. It includes approximately $ 4,560 in annual employer-based California and federal payroll taxes and approximately $ 3,1
Companies say they would need to raise prices significantly to offset at least some of these additional costs, which in turn would likely lead to a reduction in consumer demand, but dampen the impact of the extra costs to the bottom line. economy that would rank fifth in the world if the state were a sovereign nation. Other U.S. states have said they plan to follow California's lead and enforce similar laws.
A "yes" vote on California's Bill 22 gives Uber and Lyft what they are looking for, which is to repeal the state law enforcement team, known as AB5, which came into force in January. Uber and Lyft have insisted that the law does not apply to them, leading to a legal battle.
The dispute over the classification of workers highlights the political and business risks that Uber, Lyft, DoorDash and other companies have built on workers who are not classified as employees who are entitled to health coverage, unemployment insurance or other benefits.
According to the company-supported voting measure, so-called gig workers would receive certain benefits, including minimum wage, health care support and accident insurance, but remain independent contractors who are not entitled to significant employee benefits.