San Francisco (AFP)

California on Wednesday ratified a law that will force car rental giants to requalify VTC drivers as employees, but Uber and Lyft, the two leaders in the sector, do not admit defeat.

"This law will help to solve the problem of the status of workers who are considered + sub-contractors + and not as employees, which prevents them from benefiting from basic social protections, such as the minimum wage or health insurance", said Gavin Newsom, Democratic governor, when signing the law.

This decision will be a blow to the flagship of the "gig economy", the economy of independent employees who work today without protection or guarantees.

"The next step is to facilitate the formation of trade unions that can negotiate better working conditions together (...) while preserving flexibility and innovation," added the governor of this progressive state where the seats of many technology giants.

"A huge thank you to all the workers, union members and activists who have spent hours mobilizing for this historic victory," tweeted a California federation of unions.

Lorena Gonzalez, the parliamentarian who drafted the law, hailed her ratification as a "massive victory" for the workers.

On the New York Stock Exchange, Lyft's stock fell by 4% and Uber's share lost 1%. These two stocks have performed poorly since their IPO in the spring, while both groups continue to record heavy losses quarter after quarter.

- "Pay more" -

The two US leaders of VTC oppose any change in status of their drivers, which would cost them more in social charges.

Drivers are divided between those who would like to enjoy the same security as employees and those who wish to work at the schedules of their choice without the constraints of a full-time job.

"If we become employees, they will lose a lot of drivers," said Vondre Adams, Uber driver in San Francisco for 6 months.

"Uber is not a career, but I earn $ 200 to $ 300 a day, I have the money right away, I do not want to get paid by the hour, and I do not to be able to do overtime, "said AFP driver, who also enjoys the health coverage of his wife.

"We think California is missing out on a real opportunity to show the way to the rest of the country," said a spokesman for Uber.

The company has been defending for months "a new progressive framework, which would have, for the first time, granted the self-employed minimum wage guarantees, access to social protection and the right to organize themselves", he added.

Lyft also believes that the reclassification of the drivers would be bad for them as well as for the customers of the service.

This requalification "could result in Lyft treating its employees like other companies do," said a spokesman.

"Users may have to pay more and wait longer, and some areas may not be serviced at all, which would be particularly devastating (...) in areas underserved by public transport or less densely populated," he said. he detailed.

- Popular vote -

The new law threatens the economic models of these two groups, who see the number of races jump as well as users, while their losses accumulate.

Uber recorded a record loss of more than $ 5 billion in the second quarter.

When the bill was passed by the California Senate last week, Uber warned that the new text would not automatically requalify its drivers as employees.

It will take a test "to determine if a worker is qualified as independent or employee" in the eyes of the law, defended Tony West, the legal director of Uber.

Uber and Lyft claim to have set aside $ 30 million each to hold a popular vote, as permitted by California law, to replace the law with social rights compromises they submitted to the governor.

"We are ready to put this issue to the citizens to preserve the freedom and access that drivers and passengers desire," Lyft said.

© 2019 AFP