AB5, the contentious California bill that would upend the gig economy model of Uber, Lyft and other tech companies in the U.S., has moved a step closer to becoming a law.
Editor’s Note: This bill will likely have knock-on effects for Australian users of these services.
First introduced into the U.S. State Assembly in January (and passing some months later, 53 to 11), AB5 would likely force gig companies to reclassify their workers as employees rather than independent contractors in the U.S. — something those companies have fought, and continue to fight, vigorously to resist.
Rideshare companies have propped up an interested group in the state — the I’m Independent Coalition — to try to convince drivers that being a contractor without the right to overtime pay, healthcare, or other benefits, is preferable.
Largely they attempt to equate non-employee status to working hour flexibility, which, as my colleague at Jalopnik Aaron Gordon points out, is utterly unfounded.
This coalition has taken heat for allegedly paying drivers to protest AB5, while the companies themselves have urged their workers to sign petitions against the bill.
Most recently, Uber, Lyft, and Doordash have committed to spending a combined $US90 ($134) million to oppose this legislation, while publicly offering a “compromise” to drivers in California of $US21 ($31) per hour while on a trip.
While that might at first sound generous, when you run the maths, it works out to around minimum wage.
Drivers themselves have been no less vigorous in their defence of AB5. Gig Workers Rising and the Mobile Workers Alliance organised a multi-day “caravan” which, among other actions, blockaded the street outside Uber Headquarters for over an hour this week, demanding “AB5 and a union.” (As contractors, currently, rideshare drivers are limited in their ability to join in collective labour actions, both legally and practically.)
The bill will now move to a full U.S. Senate vote, likely sometime next month.
“We are working on a solution that provides drivers with strong protections that include an earnings guarantee, a system of worker-directed portable benefits, and first-of-its kind industry-wide sectoral bargaining, without jeopardising the flexibility drivers tell us they value so much,” Adrian Durbin, a senior director of communications at Lyft told Gizmodo.
“We remain focused on reaching a deal, and are confident about bringing this issue to the voters if necessary.”
We’ve reached out to Uber for comment and will update if we hear back.