Gig Economy

Gig Worker Law Change Will Head To California Voters In November

A new ballot initiative will attempt to fight AB 5.

A petition by Uber, Lyft and DoorDash to roll back a California law regarding gig economy workers has reached 1 million signatures and will head to voters at the ballot box this November, according to CNET.

The initiative is a response to California’s AB5, which restricts the types of workers that these companies could call independent contractors, changing the rules on who has to be classified as an employee instead.

The new ballot initiative was put together by a group of gig economy companies and is called the “Protect App-Based Drivers and Services Act.” Uber, Lyft and DoorDash have each chipped in $30 million. The initiative would create an alternative to AB5 which keeps employees classified as independent contractors but increases their worker protections. The added protections would include a minimum earnings guarantee, expense reimbursement, a healthcare subsidy and insurance to cover on-the-job injuries.

The earnings guarantee would make sure that contractors earn at least 120 percent of the minimum wage, and expenses would include 30 cents per mile for gas and wear-and-tear on vehicles. The companies claim these numbers come out to around $21 per hour, when drivers have a rider in the car.

The companies, including others like Postmates and Instacart, have been disagreeing with the state over whether the classification of gig economy workers should be as independent contractors or employees.

AB5 was passed last year and went into effect in January. The idea behind the law is to protect low-wage and freelance workers relying on these companies for income, and to try and ensure they had some type of benefits.

Uber and other similar entities argued that the bill was unfair, saying their industries had been targeted in a biased manner while other industries had been left untouched. Opponents of AB5 say they don’t want to reclassify independent contractors as employees because of the unwieldy and expensive costs of managing large teams of workers.

Economists claim the bid sounds better than it actually is, with the University of California at Berkeley Labor Center saying there would be other factors like waiting time, unpaid payroll taxes, and underpayment for driving expenses, that would still come out unfair for workers. For instance, drivers would only get paid for the time they have a rider in the car — and, about 70 percent of the time, many ride-hailing contractors are just waiting for a customer.

Uber has disputed those findings.

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