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Home / NewTech / The deal with Uber, Lyft could be impacted by the California Gig Worker bill

The deal with Uber, Lyft could be impacted by the California Gig Worker bill



  Uber Driver Ride Sharing Protest Unions7788

Ride hail drivers protest in favor of Californian AB 5.


James Martin / CNET

Big changes are under way for the gig industry. The California Senate passed a groundbreaking bill Tuesday evening that might cause Uber, Lyft, DoorDash, Postmates, and other gig economy companies to reclassify their workers as employees . Governor Gavin Newsom has announced to sign the law.

The future law, AB 5, could incriminate Uber, Lyft and other companies in this sector whose companies depend on bringing hundreds of thousands of independent contractors on board. Work is far cheaper than that of workers. The facility also benefits businesses by shifting many of the costs, such as the provision and maintenance of vehicles, to contractors, who also have to pay for their own health care and are not entitled to any benefits, such as sick pay or overtime pay.

Uber and Lyft both said their businesses could break down if they had to reclassify their drivers as employees. Treating contractors as employees would bring a number of new costs to companies, none of which is profitable. Uber had two layoffs over the past 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.

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 restrict Airbnb's business and 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 state of Washington and Oregon have considered legislation similar to AB 5.

Michael Droke, Dorsey & Whitney's Partner for Employment and Employment, says AB 5 will likely encourage other states to act.

While few workers are employed in California, other states are likely to enact similar laws, "said Michael Droke, a lawyer for employment and employment at Dorsey & Whitney AB 5 will appeal to any independent worker in California.

Support for AB Among the hail drivers in California, number 5 was obvious: Thousands of riders across the state gathered to increase support for AB 5 as it made its way through the legislature, protesting off Uber's headquarters in San Francisco and organized a caravan from Los Angeles Many met with lawmakers to enforce the bill.

"AB 5 is just the beginning," says Edan Alva, a hailstorm driver who says the momentum for change is increasing. "Only Because someone really needs them to work does not mean their rights as a worker are being violated everywhere should. "

Uber and Lyft said the majority of their drivers do not want to be workers, a status that would change the relationship between the companies and the w Orker." The companies said they would if they could not reach agreement on AB 5 to introduce the problem to Californian voters by supporting an electoral initiative that would exempt them from the law in November 2020. Together with DoorDash, Uber and Lyft have announced plans to spend $ 30 million each on promoting the initiative. [19659006"WearefullypreparedtobringthismattertoCaliforniavoterstoupholdthefreedomandaccessofdriversanddriverstheywantandneed"saidAdrianDurbinaLyftspokesmaninane-mail-Mailshippedstatement

Originally released on September 11.
Update, 14:07: Adds a lawyer comment.


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