CA Gig Workers Split On Impact Of New Classification Law

California, ride sharing, law, independent contractors, employees, uber, lyft, gig economy

California Gov. Gavin Newsom signed into law a controversial bill that could reclassify ridesharing and other gig economy workers as employees instead of independent contractors, The Wall Street Journal reported on Saturday (Sept. 21).

Although the new law is intended to raise wages and add benefits like unemployment insurance, drivers of rideshare and food delivery companies aren’t so sure they will benefit.

About 70 percent of the 500-plus Uber and Lyft drivers surveyed this month said they were “extremely” or “very” satisfied with their experience on the platform, according to RBC Capital Markets

Many drivers indicated that their jobs with rideshare companies are only side gigs. Uber said 92 percent of its drivers work less than 40 hours per week and 45 percent drive fewer than 10 hours. Lyft says it has 325,000 drivers in California, while Uber says it has more than 200,000, the article said.

Drivers have been using online forums to debate the bill’s benefits over its threat to ruin the freedom of flexibility.

New York has already tackled the gig economy issue by passing a minimum wage law. The Taxi and Limousine Commission also voted in August to “extend a cap on for-hire vehicle licenses.” It was the first law in the U.S. to tackle low wages.

Enforcement of the new law isn’t clear, but Newsom said talks with Uber and Lyft will continue in January. A $21 per hour minimum wage was proposed by companies in earlier talks.

The landmark legislation AB5 passed the Senate on Wednesday (Sept. 11) and was soon after supported by the Assembly and signed into law by the governor. Both Uber and Lyft have stated they wanted to be exempt from the new law.

The law puts the burden of proof on the employer and requires that companies classifying workers as contractors prove it based on new criteria.

Uber, Lyft and DoorDash indicated they are planning to spend $90 million to bolster a ballot initiative that would make them exempt. Uber is going a step further and has pledged it will litigate misclassification claims from drivers.