Uber and Lyft will no longer temporarily suspend their services in California following an emergency court injunction. Uber and Lyft were originally asked to reclassify their drivers as employees from being independent contractors due to Assembly Bill 5, better known as AB5.
AB5 puts strict limits on the role of independent contractors, so more people will have to be hired by companies as employees with benefits. An intended goal of AB5 is to ensure that workers join unions.
Reclassifying workers is incredibly difficult for rideshare and other driving-based services. Independent contractors are a key component to their business model and cannot afford to provide benefits to their thousands of workers. The law also put heavy restrictions on occupations like freelance writing, because it sets a cap at 35 article submissions a year before a writer has to become an employee of an organization. As a result, businesses may outsource to other states for their needs which could easily be fulfilled by independent contractors.
The law has sparked harsh criticism from not only major companies, but many students and individuals who use apps like Uber to supplement their income. If these services were to eventually shut down, despite the current court order, it would disproportionately impact lower income workers.
Assemblywoman Lorena Gonzalez proposed the bill in September 2019. Prior to serving in the State Assembly, Gonzalez was a union leader and labor activist. According to votesmart.org, she has taken over $200,000 in donations from public and private sector unions, making them the largest donors to her campaign.
For app-based drivers, Proposition 22 will be on the ballot this November of California. A “Yes” vote would allow drivers to continue working as independent contractors. As for everybody else that considers themselves to be part of the gig economy, there is a large push to repeal AB5. Due to the liberal supermajority in the California State Legislature, a repeal of the law would be unlikely. This draws extra concerns from workers and politicians alike, as the economy has taken a massive downturn due to the COVID-19 pandemic.
The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.