In September the California Legislature passed a bill (AB5) changing the classification of drivers for such companies as Lyft and Uber to employee status rather than independent contractors https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5. Several other states are in line to follow suit and many fear that California’s legislation will eventually spread across the country and the gig economy. CA has over a half a million ridesharing drivers in Lyft and Uber indicating the significance of employment in the gig economy. The bill could result in regulations which could significantly modify the pay and conditions of employment of a contingent work force typical of today’s gig economy.
An August 2019 NLRB ruling, with a majority of Trump appointees and one lone democrat, dealt a blow to the legislation in CA, and other similar ones in the pipeline, by asserting that it is difficult to draw a distinction between employees and independent contractors and functionally making it legal to misclassify “employees” as “contractors.
The California bill has been controversial with the companies, as well as some of the drivers, contesting the notion of reclassification. Some drivers fear the loss of job flexibility in hours and working conditions; very few drivers work 40 hours weeks (<8%) and 45% work less than 10 hours (Herrera 2019). Many of the drivers rely on ridesharing gigs for all, or most, of their employment. Some drivers augment full time low paying jobs while others are unable to work full time, or regular schedules, for a variety of reasons. An additional fear concerns the likelihood that rising costs to the consumers could significantly impede the likelihood that students and lower wage customers could continue to utilize the service threatening the livelihood of the current drivers.
Lyft and Uber, along with Door Dash, intend to spend 90 million dollars on a CA counter bill which, if successful, would force the legislature to reach a compromise bill. One such prospect is instituting a 21 dollar minimum wage.
Resistance Sources: Rideshare Drivers United https://drivers-united.org/, is a union representing 5000 drivers in Southern California active in countering the opposition to AB5. This group utilizes software to organize workers who have no local gathering place.
His website https://www.gigeconomydata.org/ provides data on gig workers and can clarify issues facing such workers.
Photo by Dan Gold