California’s Contractor Law Stirs Confusion Beyond the Gig Economy

There is NOTHING innovative about not paying a living wage. Oh wait, I'm wrong it's a new innovative way to get monarchial rich on the back of serfs. Oh wait, I'm wrong again. It has been done for eternity, it's the 'tech' part that's novel.

Uber keeps trying to run out the clock - to the point when they can replace those pesky humanoids with self-driving cars. To the extent that they're even serious making this claim, it's a stone loser - the unanimous Dynamex decision of the CA Supremes makes that plain. Too much company control (A), too integral to their business (B), and those drivers are simply not independent businessfolk (C) - they're moonlighters. Tony West, Uber's GC, is one very capable lawyer, but this is an uber-absurd position. The writng's on the wall, tech CEbrOs - read it and make this really the "sharing economy."

As an independent contractor for three companies, I am worried. I am a copy editor. One company a few years ago that was forced to claim its independent contractors as employees sent us W-4s to put us Californians on the payroll. Within a month, however, we were let go. They could find contractors elsewhere who wouldn't have to be classified as employees. Already, I'm noticing my work dry up. Could it be in anticipation of this bill passing? Hmmm.

It's interesting that Uber and Lyft would fight this law's passage tooth and nail but then turn around and say it doesn't apply to them anyway. If so, then why fight it in the first place? Why invest $30 million in a future ballot initiative to reverse it? Seems like these corporations can't figure out what their position is besides demanding that they continue to be able to exploit drivers for their own massive revenue needs. And considering neither company is anywhere close to making profits, how valuable are these corporations to the overall economy? Why not just raise prices on rides to cover the increased costs like any other business - the law applies to all, so it's not like one company would have a leg up in the situation. Is it because consumers won't pay the actual cost of these rides without continual subsidies from the corporations combined with impoverishing their driver corps? And what does it say about American consumers that we won't pay the actual fair price for some good or service? If these corporations have created a system that is so wonderfully innovative, why haven't they figured out how to actually make money at it? It's not like these services are new, they're old hat at this point. I'm sick of these overvalued corporations dictating the future to the rest of us.

The future of these apps will be to act as a platform for other companies to use. Small companies will form in different cities that employ the drivers, and they will use Uber, Lyft, etc. as a tool to match their drivers with riders. At that point it will be up to the smaller companies to comply with employment rules. There's no way Uber can manage all of these drivers as employees when they already are losing money on every ride.

I hope the new California law will "apply" uber right out of business. This idea of a gig economy is not and never will be good for the people who do the work. Independent contractors is just a way for business to avoid paying people what they are really worth to their companies. Why do we have to keep relearning the lessons of the past? Young people, wake up, read a history of labor book.

Uber and Lyft should simply suspend operations in California, just like Amazon bypassed Queens when local politicians kicked up. All Uber and Lyft drivers immediately lose all their revenue, and riders statewide are stranded. That will create the backlash necessary to ensure passage of a ballot initiative to revoke AB5. As a former CA governor observed, government always destroys value in a futile effort to redistribute private wealth: “Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Uber is smart to fight this because the GOP owns the judiciary and will find in their favor in court. Mitch McConnell's greatest legacy is installing a far right judiciary for the next 30 years.

Any business owners crying crocodile tears over this should reflect on one thing: If your business depends on paying workers less than a fair living wage to make a profit, your business model is a complete failure and you should be deeply embarrassed by it, and look for a new one. Enough of the whining.

These are just Luddite political reflexes whose long term effects will be the erosion of California's business competitiveness. And one more problem: there are lots of contract jobs in the digital space of the gig economy. How will these "employee" rules apply to people working for California companies in other places? Will an Indian web developer in Bangalore become a California employee?

There is no problem with the "gig worker" concept, i.e. wage only, no benefits, etc., BUT ONLY if the U.S. government steps up to take over all CITIZEN WELFARE (not a negative term); i.e. worker disability insurance, medicare for all, and retirement. This means a substantially improved and increased Social Security system, and MediCare for all CITIZENS. Then, with increased union support and negotiation of only wages and working conditions with employers, we can leave behind the quasi-paternal and failing idea that employers are protecting workers.

“Several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces,” said Tony West, Uber’s chief legal officer. I guess Mr. West has never Ubered home from the airport....

Hopefully California will revoke Uber's licenses for operation when they refuse to comply come January.

Uber usual course of business is not transportation for hire? Seriously? How come I contact Uber and a car shows up to transport me? It must be like the coincidence on the Beverly Hillbillies that some pretty music would always play whenever someone came to the Clampetts' front door!

The race to the bottom rushes on...

Can we all, please, just admit that money is the only god, and pursuit of money is the only religion?

LOL... sure See you in court Uber.... in the California VS Uber lawsuit to wrap up your operations for gross violation of California law. And I bet that Uber is already lobbying the White House and Congress to pressure California to back off, and to sue the state all the way to the Supreme Court.

In the end, many of these new "employees" will probably earn less as their work-hours are reduced. That already happened when Obamacare went into effect, requiring healthcare coverage for those working essentially full-time if the company had more than 25 employees.

Once again the new left in California are inserting themselvers and picking sides in what are private, consensual contracting relationships and assuming that the evil 'buying party' has 'too much' leverage over the naive 'selling' party when they often do not. Finding good people is a huge challenge for businesses and good people are perfectly capable of knowing their worth and negotiating for it without State intervention. Wrong headed, anti-commerce policies that are typical of California's new left.

This is the logical result of the whole enterprise: somehow pushing back cities that regulated their taxi business (poorly, admittedly), and trying to skirt any regulatory restrictions and taxes to make as much money as possible, by lying about what it was doing, calling the "new" taxi business "ridesharing". It's a scam, just like airbnb is a scam to evade hotel/motel regulation and taxation. Uber CANNOT make a profit as they're structured. Let them die.

Tony West, what are you thinking? If you cut out the drivers that work under your direct supervision, what do you have? A platform with virtually no purpose, and hence NO VALUE. Be a man and accept your responsibilities. Be accountable, which you are trying to run away from like a hypersonic rocket.

The governor agreeing to concessions for Uber, which is a Ponzi scheme that has made millions for the initial investors in spite of never making a profit because it spent how many millions(?) billions(?) to destroy the business model it seeks to replace, and its million employees who have no power to negotiate and have no quality of life, potentially further pushes our country into developing nation status for the sake of the few with the unconscionable smarminess to pursue wealth at all costs to human life.

The rise of Amazon, Uber et al has been excessively fueled by cheap, exploited labor pools. While “popular,” these brands are rather quickly exposing the downside of this ruthless disregard for people over excessive profit for owners. The novelty of amateur drivers and package handlers is wearing off.

I'm honestly a little confused by the confusion expressed by some of the folks mentioned in the article - the vineyard operators aren't going to have to employ the truck drivers. The article cites that the drivers have their own rigs and work with multiple wineries, etc - this is what an independent contractor OUGHT to be; someone with their own specialized equipment/skills (a truck, and the insurance/training needed to operate it) being hired on a contract basis by someone in need of those services whose primary focus is a different specialty (growing grapes and making wine). Assuming that the work is paid out on a per-task or invoice basis, I'm not sure how that would fall under the umbrella of this law. While Uber might state that they are in the "technology platform" business, this doesn't stand up to the smell test. Ask anyone in the country (other than an Uber attorney) what business Uber is in. One other thing that's bugged me for a long time is Uber drivers (none that I've met) seem cognizant of the depreciation costs on their vehicles, and most are barely willing to acknowledge increased maintenance costs. I fear that we've devalued the time and capital involved in "ridesharing" at this point. Maybe when Teslas have Level 5 Autonomy...

Any law that will try to ensnare the drivers will have unintended consequences with other types of jobs. They will carve out numerous exceptions on this point. The main litmus test is "The worker is free from the control and direction of the hirer in relation to the performance of the work, both under the contract and in fact" Now who is the person hiring the cab? Uber's argument is that they don't hire the driver, and the user of the app is actually doing the hiring. Uber will claim they are only facilitating between the person hiring and driver.

This sounds like great news. The outsourcing and contracting out of essential tasks has been an unmitigated disaster for the average worker, who has seen wages and benefits decrease, while job security and stability increases. Giving the middle class a chance to expand and giving low-income workers the platform to improve their lives starts with giving them job stability and protection.

Uber was always a frat boy concept that believes others should do the hard work while they reap the benefits. The corporate mindset of increasing profits while denying benefits to the working class is the model uber and all gig concerns follow. Some things never change, they’re just wrapped in cooler graphics.

Uber has done an excellent job of conning its investors and customers into thinking its platform benefits the general public and its employees who Uber calls contractors for its financial benefit. I’ve frequently discovered there are many times during “surge pricing” that Uber is considerably more expensive than hailing a traditional cab. Uber started off focusing on good service for an inexpensive fare. Now its focus appears to be good service and price gouging.

California could change the rent control law and surprise the landlords. Property is not liquid. Corporations, companies with employees or contractors can adapt. They can restructure and change their business plans. So some politicians might make money, having a trust that bets against these companies in the stock market. but the companies will adapt.

Any time legislation is passed to protect the rights of workers, no matter what it is, business groups predict dire results. Every new law is supposed to result in the closing of businesses and the breakdown of the economy, but none of that ever happens. Employers will always fight tooth and nail against providing a living wage and benefits to workers. Corporations and small businesses alike think workers should be grateful for a job and that asking for better working conditions, benefits or minimum pay is going too far. There's always a struggle between workers and business owners. But, if businesses treated workers fairly, and there'd be no need for these laws.

the angst of the "contractors" in this bill is overblown and based on misinformation. The "app" or org that hires "contractors" need only change their agreement to require the contractors get a business license and bill the company for their time and materials. The "gig" economy apps have long abused the contractor status. The companies did not want the additional liability that business to business relationship entails. Added to that people wanted easy extra money, which is fine, but it led them to agree to just about anything and many have avoided paying their proper share of taxes and social security. A "gig" should never be a primary job; at most it should be extra income, a part time job, a way to buy christmas presents or save for a vacation. The "gig" economy is, in the overall, destructive to the futures of average Americans while enriching the few billionaires and investors at the top level incomes of our nation.

Seems like CA is not “skating to where the puck will be”. Point is, the gig economy is here and is a natural extension of the journey that we’ve been on for years— you used to work for the same company for life, then it used to be several companies in the same field, and then it was job hopping. Now gig economy. CA should be determining how that new economic / workforce model changes existing government policies and tax rates. Instead, it wants to move back to an older economic and workforce model. For example, there can be some real imaginative thinking developed here, like universal income stipends, etc.

Maybe I don't know enough about the bill's specifics but why not instead extend these benefits for drivers that agree to work above a certain number of hours every week? Personally I don't see how those who drive for less than a part time job deserve the same benefits and protections as part/full time employees. The benefit they are receiving is being able to work when, where, and how much they want. For those that are working as much or more that full time jobs, something should probably be changed as they are the ones truly providing value to the company.

And lo, when the serfs rose up noisily and demanded protection from their cruel Lords and Overseers, the Sheriff said, "Be calm! The King has declared that you will receive fair treatment!" But the Lords of the land began a campaign, with their riches and gold, to change the king's mind. The terms of the disagreement were twisted from, "Fair treatment will raise the serfs up from their suffering!" to "Preferred treatment for the lords is the only way to help the poor serf." And for a time there was hope. But the Lords prevailed. For what is the noise of serfs compared to the riches and gold of the Lords?

The bill referenced is not what’s changing independent contractor status in California. There’s an “ABC test” in play since April 2019 due to California Supreme Court’s decision on Dynamex. I’m shocked that this article does not mention Dynamex. Worker classification test from Dynamex puts the burden on the hiring entity to prove that an independent contractor meets the following: A) The worker is free from the control and direction of the hirer in relation to the performance of the work, both under the contract and in fact; B) The worker performs work that is outside the usual course of the hirer’s business (I.e. not the core or necessary services of a business) C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hirer

California continues to run amok under its one-party government. A few years ago Norway tried to tax the labor individuals who built their own homes. Needless to say, that didn't last long. But, I suspect that California will be going there soon.

The independent contractor legal status can be traced to the 1930s as a way to evade paying social security and unemployment taxes and respecting maximum hours and overtime law by firms seeking to evade the protections given to labor by the New Deal. It now is expanding throughout the economy to accomplish the same end, to allow firms to employ workers and not pay them in accordance with the same rules that apply to regular employees. It penalizes companies that take responsibility for the old age pensions and unemployment protections of the employees. If not checked the expansion of independent contractor status will lead to impoverishment of men and women when they suffer unemployment and/or grow old, since firms do not pay unemployment insurance or social security for independent contractors. It also will hurt companies that try to remain responsible employers, as they will have costs that predatory companies like Uber do not have to carry. Limiting its use by firms who have regular workers who are in fact employees will not affect those who are truly independent professionals without a standard employer, such as the language translators in this discussion thread. Consultants also can remain independent. But it will protect the men and women whom firms end up relying on them provide their services. And it will not necessary help unionization, as these benefits will come to the independent contractors re-classified as employees regardless of whether they are union members.

Seems all taxi companies will have to put employees on payroll instead of renting vehicles by the shift.

I can see Uber making drivers sign non competes where they can't driver for Lyft and vice versa, so many unintended consequences

I was appalled at the so called "independent contractor" agreements my 20 something daughter was asked to sign when applying for full time jobs at multiple app companies in SF. As an attorney in the Midwest, I saw the practice as unconscionable. Businesses hate being over regulated, but sometimes their own bad conduct leaves the legislators and voters no other choice. My daughter did eventually find a job at an app that actually employed her; that company and my daughter are thriving.

Kamala Harris is supposedly in favor of the new law. But her brother-in-law Tony West ( and the husband of her campaign chairman) is Uber’s general counsel and the one who issued the statement that Uber will not reclassify it’s workers. If Harris cannot convince her own brother-in-law to support policies she is in favor of, how is she going to convince anybody else to vote for her? But perhaps she is progressive in name only. Just like another Bay Area politician Gavin Newsom who wants to continue conversations to help Uber and Lyft find a way around this law.

The whole so called gig economy is a ripoff for most of their drivers who wear out their cars and accumulate traffic tickets. Let's see the balance sheet for any driver, you will never see one and few can tell you how much they make. I don't use these services ever. Thanks to Uber et. al. for disrupting so many real contractors.

Let us be very clear about California AB 5. The Assemblywoman, Lorena Gonzalez, who sponsored the bill is a former union official in the San Diego area. This bill is an attempt by the unions whose membership is below 10% nationwide to force more people into unions. If an employer who is unionized, lets use the NYT as an example, moves contractors, such as those who deliver their papers and freelance writers and photographers, who provide much of the content, to being employees, they must join the union or be fired. The so called 'Fair Share Fees' are a fiction because they are still paying dues and must abide by union rules. What unions see as a problem, many people see as a feature. They can work or not as their availability and individual situation requires. They have the flexibility to work for several different companies as needed. All of this would change if they were to become employees. On the company side, few modern companies can afford to have their work rules locked in stone for the 3 years of a typical union contract. Lastly there are so many exemptions written into this law that rather than being protection for workers who may be abused, it resembles a moth eaten blanket thrown over those without either the money or clout to get out of the law. Gov. Newsom should send this bill back to the Assembly for a major rewrite, one that would protect those who need it, but not endanger the world's 5th largest economy.

Uber has been getting away with murder. Their drivers are employees and deserve the full protections that employees are afforded.

This law is a great progress. All companies big and small should either pay a living wage to all of its employees or become a non-profit entity.

The new law is in response to a California Supreme Court decision in a related case where drivers were misclassified. Given this and the legislative history which was focused on making sure ride share drivers are treated as employees I don’t see how Uber can claim that it’s drivers will not be affected. Uber is planning to fund a referendum in 2020 against the law. Maybe their plan is to drag this through the court system to delay its application to them while they try to win the referendum by poring in money.

I can't anything but a Trainwreck on this one. The intentions are good, but the execworks in any of ution is poor. My wife is a certified legal interpreter, and like nearly all interpreters is an independent contractor anyof several state courts, or for lawyers in depositions, as the need arises. There is no court that she works at that has enough demand to justify hiring her as a full-time employee. And what of the dozen other languages for which the demand-supply relationship is even more finely tuned? I can only see this law being quietly ignored by the judicial system in California (at least as regards THEIR) contractors. Ah, the irony!

The Times, claiming the new law on gig jobs "stirs confusion, writes: "In California, religious groups said they feared that small churches and synagogues would not be able to afford making pastors and rabbis employees. Winemakers and franchise owners said they were worried they could be ensnared by the law, too." If a synagogue or church or winemaker or a franchise owner can't be bothered to pay a living wage to their employees a living wage, they don't deserve to have employees in the first place. Living wage, or shut down. American workers deserve no less.

Uber's marketplace requires that drivers deliver people and goods on request, making them essential to the business conducted via Uber. Additionally, their drivers are an integral part of their marketing strategy by making every car into a mobile advertisement for Uber's services. Their stance toward the people who do the work has caused me to delete my Uber app. I don't want to be a party to this perpetual negation of worker's rights.