The future law, AB 5, could have these gig-economy companies, whose companies need to get hundreds of thousands of independent contractors on board, whose workforce is far cheaper than their employees. The facility benefits businesses by shifting many costs to workers. For example, the drivers of Uber and Lyft deliver and service their own cars and pay for their own health care. The drivers also receive no benefits such as sickness benefit or overtime pay.
Uber and Lyft both said their businesses could break down if they had to reclassify their drivers as employees. The move would bring a series of new costs to businesses, both of which are having difficulty becoming profitable. Uber hadin the last six weeks to control his costs.
When Uber applied for listing as a listed company, he identified the risk in a filing with the US Securities and Exchange Commission. "Our business would be affected if the drivers were classified as employees rather than independent contractors," it said.
California creates the conditions
What happens in California rarely stays there. Due to its size, the Golden State often sets legal and regulatory standards for the country. The state is the most populous and economically strongest state, and this size means that companies around the world must meet their often stringent and unprecedented standards if they are to enter the lucrative market.
In addition to AB 5, the state has passed the California Consumer Protection Act, which sets standards for online information capture and will enter into force in January. State regulations and laws regarding fuel efficiency, emissions and air quality have affected automakers around the world. And the California Assembly has just passed a bill to pay college athletes for using their likeness.
San Francisco and Oakland passed the first laws in the US restricting the use of facial recognition technologies, and San Francisco was one of the first cities to restrictand registration of hosts in the city required.
AB 5 could serve as a first step towards more comprehensive monitoring of the gig economy. New York City ensures that drivers earn at least $ 17.22 per hour for each trip, and fleet size has been limited to avoid congestion. The US state of Washington and Oregon have considered similar legislation to AB5.
Michael Droke, Dorsey & Whitney's Partner for Employment and Employment, said AB 5 will likely encourage other states to act.
"While few workers are employed in California, other states are likely to pass similar laws," said Droke.
Support for AB 5 was evident among the hail drivers in California. Thousands of drivers across the state have joined forces to increase support for AB 5 when it found its way through the legislature. They protested at Uber's headquarters in San Francisco and organized a caravan from Los Angeles to Sacramento. Many have met with legislators to enforce the bill.
"AB 5 is just the beginning," said Edan Alva, a hail killer involved in organizing AB 5's Gig Workers Rising group. He says the momentum for change is building. "Just because someone really has to work does not mean that their rights as workers should be fully exploited."
Uber and Lyft said the majority of their drivers do not want to be employees, a status that would change the relationship between companies and workers.
The companies said that if they could not reach an agreement on AB 5, they would present the problem to Californian voters by supporting an electoral initiative in November 2020 that would exempt them from the law. Together with DoorDash, Uber and Lyft have announced plans to spend $ 30 million each to promote the initiative.
"We are fully prepared to present this matter to California voters to safeguard the freedom and access of drivers and drivers they want and need," said Adrian Durbin, a Lyft spokesman, in one e-mailed explanation.
Originally published on September 11th.
Update, 14:07: Adds a lawyer commentary.