California Bill Makes App-Based Companies Treat Workers as Employees

Legislation near final approval would affect drivers for ride-hailing services, food-delivery couriers, janitors and others now viewed as contractors.

Comments: 240

  1. So, how does CAs goal of dismantling the gig economy affect those employed by it? For example, what is the advantage to using Uber or Lyft after they become just as expensive as a traditional cab?

  2. I mean I guess your consumer choices are what matters over the well being of workers.

  3. Should the cost of rides be subsidized by gig drivers? Why not make the cost of rides subdidized by all workers so they all get to work on time on public transit? Like in other countries.

  4. @Ajvan1 "What is the advantage to using Uber of Lyft after they become just as expensive as traditional cab?". How about a reasonable surety that you won't get raped? Once drivers are 'employees', background checks will once again be de rigueur. Oh, and employees will be entitled to fair compensation for the wear and tear on their primary asset - their vehicle. If the titans of ride sharing want to stay in business, they'll have to take a smaller cut for their brilliant algorithms.

  5. Why not create a status in between employee and contractor? One suited for the new economy, that includes both worker rights, and flexibility?

  6. Silicon Valley has used gig work for years; employees at Facebook coding next to independent coders. This bill targets "app-based" businesses—evidence California lawmakers are too afraid to extend rights to all workers if it means taking on entrenched interests.

  7. @Brendan No. The bill does not "target" app-based business. Instead, it clarifies the distinction between an independent contractor and an employee, using a three criteria known as the "ABC test.

  8. Phyrric victory for the woke Left. This legislation will massively raise the cost of Uber and Lyft rides, cut into rider demand and cost drivers their livelihoods. Will also serve as a massive boost to autonomous vehicles (with no driver whose Social Security and Medicare taxes need to be paid), just like $15 minimum wage is encouraging wholesale automation of fast food restaurants.

  9. @Richard Money isn't everything. Ethics matters.

  10. @Richard It's not a $15/hour minimum wage that's causing automation in fast food restaurants and supermarkets. It's the greed of the shareholders and executives, who want to squeeze every possible dollar of profit from their operations.

  11. Yes, and slavery massively raised the cost of agricultural products. At least until the former masters figured out sharecropping and other wage gouging techniques.

  12. The 9-5, 40 hour work week is dead. The gig economy is not just Uber drivers, it is the world of the self-employed from Grandmothers watching children to high priced consultants, and everyone in between. Many industries, especially the creative economy, rely on freelancers. The old work model assumed that dad made the money and provided health insurance for the family--a model that certainly doesn't match how many people and families work. The need to restructure medical coverage is critical for those that don't have full-time employment. What percentage of the work economy is self-employed and how much has it grown? Some self-employed hold down many jobs from need, and some like the freedom it offers. Structuring systems that are fair for the self-employed are critical to the growth of this sector and good for the country.

  13. The only flaw in that logic is that the gig economy devorces the cost of health insurance from the job done by the worker, and fails to actually cover the full cost of the health insurance. It also doesn't cover rent, food, child care, utilities, savings, and educational expenses. The new gig economy is more or less a new take on modern day servitude because the full costs incured by the giger are not covered by freeriding stockholders. The gig economy makes the case for why the full cost of health insurance needs to be added back into wages tax free so that the worker can buy their own coverage.

  14. @Concerned Citizen What are SS credits? Full Social Security/Medicare tax has to be paid whether you are an independent contractor or employee. If you are a true "freelance/independent contractor" then you pay the employer share too when you file your taxes. True independent contractors (as I have been) would be able to factor that into their rates. If they can't "negotiate" their fees, then they aren't ICs. That's federal rules and also in NY State. That the Supreme Court is allowing them to be classified as ICs sounds like corruption.

  15. "Structuring systems that are fair for the self-employed" is perfectly said. It's a much better option than denying Americans the right to be self-employed.

  16. What this will create are 'employees' competing against each other to remain employed. Uber and Lyft will have to meet this overhead and the only way is to set a weekly, monthly ride share income minimum to remain employed. My husband is retired and was looking for a part-time job with flexibility, and no boss to answer too. Lyft is the perfect fit; the freedom of being self-employed. AB-5 may just have killed his dream of answering to no one and reaping the benefits of deciding how often he choices to work.

  17. @mary - I'm sorry your husband is disappointed but his disappointment doesn't outweigh our country's need for people to be compensated fairly for the work they do. Most people don't have the luxury of working here and there just because they want to.

  18. @DR Some people do have that luxury, and you're saying that's a luxury they shouldn't get to enjoy. This is the exact sort of thing that will forever keep me voting Republican.

  19. @mary Sorry to be so harsh here, but it sounds like your hubby HAD a career where he could expect things like health care, benefits and vacation days. Why does he have to undermine those things for others in the workforce during his retirement?

  20. These guys claim to be innovators. Let's see them innovate their way out of this. These so-called gig companies were built on a terrible premise: maximum exploitation of the worker to reap maximum profits for the investors. That Uber was losing massively -- including $5 billion last year -- even before this legislation was proposed is proof enough of a bad business model. Why not let these companies fail as they should have done long ago and, in the case of the ride-hail services, just fix the taxi industry? It can be fixed if the political will exists to do it, and cab driving at least provides a viable income for the drivers when the system is working.

  21. @Tony Long may be right....but what happened here is tantamount to changing the rules of a game in the first quarter. Maybe some folks like the caprice of that kind of thing. Speaking as as business person, I'm not a fan. Secondly, if you believe in free markets, you can't be a fan of this situation. Once folks are employees, companies like Uber and Lyft can start dictating work. I take both Uber and Lyft...and in almost all cases, drivers use both services. I'm guessing 'that' changes immediately once employee status us achieved. Also, these drivers love flexibility. I'm not sure that remains status quo. Finally, once you're a company employee, you're bound by company rules, regulations and standards. That's fine for folks that want that, but one should assume that in this economy, Uber drivers are doing this work because it better meets their needs. Of course....that's just an opinion.

  22. @Tony Long this just means that Uber and Lyft will accelerate R&D for autonomous driving vehicles and replace all human drivers. This was the long game anyway so this measure will drive that technology faster.

  23. @confounded I’m a researcher in computer science. Uber is nowhere near rollout of autonomous vehicles, and they’re doing better than Lyft. Self-driving cars is looking more and more like a pipe dream. And how would a company spending billions on R&D while hemorrhaging capital at an unprecedented rate further accelerate?

  24. This will all be irrelevant within 5-10 years as these drivers will be replaced by self-driving cars anyway. As to the stock play companies that might have to scale down the mega salaries they earn in exchange for people getting a living wage, I don't feel bad for them either. Kara will have to live on her $6M+ per year for a company that lost almost $2 billion last year. If it drives people back to cabs so what. For the medallion drivers that paid millions for the right to drive a cab in NYC, I'm sure no tears will be lost.

  25. Will Uber and Lyft be paying up front for the self-driving cars and paying for upkeep? Different business model.

  26. @Fred Rogers Hey Fred, it's certainly a different business model and who says it will be uber or lyft. If I had to pick a co that doesn't exist yet I'd guess a Telsa or Google.

  27. Uber, Lyft, and Door Dash have pledged to spend 90 million to fight the effort via a ballot initiative. I'd say it's long past time to take all money out of politics, no money what so ever, not even personal money. And while we're at it ballot initiatives should be extremely hard to bring up let alone pass, such that they are used only in extenuating circumstances.

  28. One of the alternatives is world's best practice public transport.

  29. @BBB - That would be true if the U.S. had a good public transportation system. We don't.

  30. Far too many jobs are classified as an 'independent contractor' so the employer can avoid paying benefits and pass costs - and legal liability - onto someone else. Companies appear to have gone to great lengths redefining their businesses to avoid hiring 'employees.' Whereas in the past a delivery driver would be an employee of a company and drive a company truck, now many of those same people are 'independent contractors' who PAY for the 'right' to deliver in a defined area using their own truck, bearing all the costs associated with that business. Many of those working 'high paying' tech jobs have become 'independent contractors' instead of employees. Go work for a company that becomes the next Microsoft and you're likely to get a 1099 instead of stock options.

  31. It is about time that the states wake up and tell the tech giants that, no, they haven't invented something new by calling it a "gig." Work is work. The organization that directs it is the employer.

  32. Yes, many contractors should be employees, but ride-share drivers have a strong reason not mentioned for preferring their current arrangement: It allows them to deduct expenses for income tax, including the standard mileage rate of 58 cents per mile, often reducing their income and self-employment tax from driving to little or nothing.

  33. @Paul Bonner I think that's a fair point, but how does that measure up to the loss of insurance and unemployment benefits?

  34. So drivers pay no taxes and employers pay no benefits - how is that good for California again?

  35. @Paul Bonner They can organize as a "driver cooperative", where they share an app to supply customers, and get group insurance, but set their own rates and working hours. Computers can handle posting a rate by each individual driver, and the customer can choose who to use. A cooperative will also take a smaller cut of the fares, since you are not paying huge CEO salaries and other overhead. It's a matter of control. If a company dictates prices for the product, the people who work for them are employees. If drivers set their own prices, they are working for themselves.

  36. "Under the measure, which would go into effect Jan. 1, workers must be designated as employees instead of contractors if a company exerts control over how they perform their tasks or if their work is part of a company’s regular business." This should be the rule nationwide. There are simply too many "workers" who provide essential regular services for businesses who are not designated as employees. Companies are getting away with murder - literally. Did you read the recent NY Times article on Amazon's network of contractors paid to deliver their packages on the last leg of the trip? And how many fatalities have occurred? And how Amazon has forced these companies to absolve Amazon of all liability for any accidents including fatalities?

  37. Amazons network of delivery contractors are generally employees, they are just employees of small companies doing delivery work for Amazon. This rule would not apply to people in those positions.

  38. Under how the IRS defines employee for contractor, it IS the rule nationwide. If the IRS had people power to step in and begin auditing all of these companies, this would likely end many situations because the penalties would be too steep. ....this doesn’t happen.

  39. @Ben Did you read the article? You are mistaken. These are not employees. My point is this rule SHOULD apply to more companies than just gig ones.

  40. As a former two-year Uber driver in SF, I can verify that working fifty hour weeks, paying for all maintenance and gas, a terrible diet from being on the road 12-15 hours a day, and sleeping in the car, never equaled minimum wage. Uber and Lyft obviously destroyed the taxi industry with a new plan: free labor, no capital investment in vehicles, and no vehicle maintenance costs, thereby offering cheaper rides. I could never understand how a business model that lost billions every quarter just to keep drivers driving with "bonuses," could turn ever turn a profit without significantly raising costs to taxi levels. How is it not a Ponzi scheme, with all of us as the victims? We think "cheaper ride." But the pound of flesh is coming from somewhere, and it's coming from those least able to afford it, the most vulnerable. In other words, the poorest among us. How is it different than buying products made by cheap "third-world" labor, undercutting American labor and manufacturing, feeding the coffers of corporate America? Corporations minimize costs to maximize profits, which shareholders demand as a return on investment. It's not like there's a conscience back there somewhere. CEO's don't take millions of dollars to have a conscience. Nothing has changed since 1947, when "It's a Wonderful Life" was released. Wake up.

  41. Almost every App or startup that isn’t a utility, educational resource, or e-commerce platform for a brick-and-mortar retailer is a variation of a Ponzi scheme engineered to enrich a cadre of very few through the manipulation of labor, laws and regulations, marketing and user needs. For end users, the shilling is amortized in equipment and data costs. For labor, the cost is entrapment in the largest sweatshop in modern history.

  42. @Patriot Missile The answer to your very good question is that Uber and Lyft are using the John D Rockefeller approach of flooding the market and absorbing losses until the competition dies. Then prices will go way up. 100 years after the original, Uber and Lyft have improved the model by making their product a little sexy and getting alot of good pr as an "upstart" and a "revolutionary" when, in fact, they are giants crushing large numbers of small and mid sized businesses.

  43. @Paul’52 Except that the barriers to entry are very low and Uber and Lyft will have a very hard time raising prices. I could imagine someone being competitive right now that doesn't have the burden of paying billions in stock options.

  44. Wow, fantastic. I hope Australia follows California's lead.

  45. "Contractor" status is a huge loophole that companies having increasingly exploiting for years. It's about time that states (and workers) drew a line in the sand.

  46. Unions are the backbones of workers in this country. Corporations have, and will always, find their way around laws. Forming strong unions is the responsibility of the people to stand united against corporations. While this law may be a step in the right direction, unions are losing strength.

  47. Thank you once again California for leading the way. Companies reap all the profits but provide none of the benefits to “contractors”. They also assume no liability. This will cost Amazon, Uber, Lyft et al a bundle which will probably be passed on to the consumer. This new tech economy is still finding its way but the reality is these are full time jobs for many people and employers should be responsible.

  48. Excellent news, the counter-reaction to Trumpism and his predatory capitalism has started. I always maintained that Trump's presidency coupled with his betrayal of the proletariat and utter disregard of the environment would foment a people's revolt that would have been impossible under Wall Street Democrats like Obama, Clinton or Biden.

  49. Good. Workers deserve protection, regardless of how companies choose to refer to them.

  50. Hey...this bill has nothing to do with workers being able to get benefits...or more has to do with California getting a their share of the payroll taxes. You see gig workers can deduct their expenses, thus reducing the taxes they have to pay. California and other states who are poorly run and bleeding see this as another way to get a revenue stream. This is big brother getting into the business of business. This will do nothing but put a strangle hold on the ability of businesses to offer work. And by the they, I work in the gig economy...I am a corporate travel agent who works virtually out of my home for one of the largest corporate travel providers. I am a farmer, and this extra income is vital to me and is now threatened by bills like this selling itself as a benefit to workers. It is absolutely nothing of the sort. It is a money grab for government.

  51. So if you are correct and the state government wants payroll taxes to pay for state services, what’s wrong with that. Citizens pay taxes so that society runs. Have you seen the condition of CA roads? Have you seen the homeless problem in the Bay Area? Schools? Infrastructure? Taxes are the price of civilization.

  52. FYI California has had a budget surplus since 2011. I don't thing your primary premise us consistent with this fact.

  53. Thank you!!! My thoughts exactly!

  54. Gig economy only works when health Care is decoupled from employment.

  55. "He argued that the bill could set a new bar for worker protections and force business owners to rethink their reliance on contractors." This line makes it sound like these are bad things?

  56. @kas Seriously. I am a consultant in NYC. The new person I answer to at the company that is my main client has been breaking every rule in New York State's employment laws. I am glad to be freelance but can't help but notice that in this City it can be the same as employee without the benefits.

  57. There is no way the Oligarchy, I mean the Supreme Court, will let this stand.

  58. Thank God for California. In Uber's case, in the US alone, net profits run at 16% of revenues. They can well afford to pay benefits and ensure minimum wage.

  59. @PeteG Try being the Uber driver who now won't be allowed to scramble for money, and instead be told that he won't be working when he is available, because there isn't enough work to support his needs.

  60. “Allowed to scramble for money” is about as inhumane and undignified a take on work as I’ve ever heard. Desperate workers *will* do this, for the profit and entertainment of those who exploit their desperation. What’s next: put people in a stadium and make them compete for tossed coins?

  61. @Bob Fowler "won't be working when he is available, because there isn't enough work to support his needs"? Really? Sound like...ANY JOB I'VE EVER HAD.

  62. I mean cool, but in 5-10 years, none of this will matter and an algorithm will take me to where I need to go .. for a fraction of the price.

  63. So are the Temps, Vendors, and Contractors at Facebook, Google, Apple, and Netflix and other major Silicon Valley companies now suddenly employees, after this bill passes? Or does it lead to mass layoffs of people who work for agencies within those major companies cause a horrible ripple effect for people who truly like working in the gig economy or that’s their main bread and butter being a contractor coder.

  64. @Summer I hope so. Major companies have been abusing the temp system for years in order to not have to pay their workers a Living wage or offer any benefits. These meager benefits used to be given to regular employees at most employers. My first job out of high school was a chain restaurant that offered health insurance. My next employer was a regional department store that offered health insurance and vacation days. I was hired directly by the employer. During the nineties the big trend was to sign up with a temp agency and work for major companies. The agency got a cut and you ended up with a few cents more than minimum wage. People lucky enough to have been hired the company received higher wages and benefits. It’s about time the government regulated industry.

  65. I too was wondering that, but it appears that this bill only applies to “app-based” companies, eg. Uber, Lyft, Door Dash. I’m curious why they limited the scope in that way.

  66. No. They were all exempted. Even hairdressers in salons are exempted. This bill is a farce.

  67. This action by Democrats in California has far less to do with workers rights and more to do with the influence of labor unions. The Democrats have given the unions a huge gift that they will now expect to be repaid.

  68. @Matt Williams The influence of unions has been waning for some time - helped by a misinformation campaign from the right. This is a step in the right direction. Unions are far from perfect, but companies like this are inviting them in with their abusive treatment of the very people that make their cute little inventions work.

  69. @Matt Williams These are great talking points, but totally ignore the facts that real wages haven't increased in decades and are declining, and income inequality is at record levels and rising. Sticking your head in the sand and parroting some Faux News talking points is how we got into this mess. Democrats solving problems like this will reduce the anger among the white working class which in turn will reduce Republican votes.

  70. 90 million to exempt themselves? Spend that money on healthcare or the insurance for unemployment, Lyft is worth $29 BILLION DOLLARS, UBER is more— valued at 50,60, 100 Billion... their top tier employees make millions and receive benefits and much more. I understand the freedom to choose their hours, to make their $$ to survive, every driver I met works to the last minute that is allotted. I think before taxes a drive could make $30 an hour but if they own their car! in NYC many rent their cars. I am an artist and it can get quite lonely out here there’s no one to catch me if anything happens to me. I think this bill that pass is making these behemoth companies to wake up and see the humans who made their money and not robots!

  71. These debates are really about who bears the risks of entrepreneurship. Commenters chanting about fair pay and benefits ignore the risks taken by the entrepreneurs, who create the opportunity for employment for others.

  72. As a moderate I can’t begin to tell you how wrong you are. This is a bill about the future of work in our country - and the winner take all inequality that has overtaken corporate America. Without intervention we are on a direct route back to the 1850’s where people were paid in Scrip by all them great entrepreneurs.

  73. @Chris Thank you for your reply.

  74. As far as I know, the definition of “employee” in the bill has always been the legal definition of “employee.” These gig companies have just been stretching and abusing the law.

  75. The Lyft spokeman says that drivers "want a thoughtful solution that balances flexibility with an earnings standard and benefits.” If Lyft is so aware, why wasn't it devising that solution on its own? I fear Lyft's complaint is a dollar short and a day late.

  76. The suffering of the American worker has been steadily rising for decades. Many, if not most, of Trump's supporters voted for, and still support him because they falsely believe he will change the status quo and bring back their dignity, honor, and a livable wage. Elizabeth Warren became increasingly aware of this problem and changed her career from teacher to politician because she is absolutely determined to fight for decent living conditions for ALL Americans, not just the wealthy who are in bed with the Republican party trying to keep them in power as long as possible so they can avoid paying their fair share of the cost of maintaining equality for all.

  77. @Richard Phelps About the only worker groups that hasn't suffered are most civil service groups. They are among 9% of American workers who still receive guaranteed retirement benefits. In many ways, our effete elite Washington legislators often forget that private sector employees . . . are Americans too! Now more than ever, we need Washington to work for American and not for their own self-interest.

  78. Encouraging news. The trend has been for companies to increase the percentage of part-time and contract employees to avoid health care, minimum wage and other benefits legally due full-time workers. These costs are simply passed on to taxpayers. Enough.

  79. Forcing companies to pay employees properly is the best way to make them most efficient. Temps, contractors, etc are effective for temporary, one-time situations (i.e. helping with a merger, creating docs for a new regulation). After that people are the reason and cost of doing business. Making them permanent makes a great company. Oh, and part of working for a great company IS flexibility.....

  80. Folks who propose and those who support these types of bills are clearly locked in the past. They want to anchor back to old business models… Old ways of working… Old ways of organizational hierarchies and relationships. Fortunately we know from history but these groups of people do not prevail.

  81. @Rob There's nothing innovative or forward thinking about underpaying your employees. The argument against this bill, that "our business model is unsustainable if we have to actually pay the people working for us" is the same one Confederate plantation owners made arguing against the abolition of slavery. "How ever will I turn a profit, if I have to actually pay all my workers an appropriate wage?!?!?!?" If you want to live in the 1830s, that's fine, but don't assume that everyone else wants to live there with you.

  82. "They have warned that recognizing drivers as employees could destroy their businesses." In 2018, Lyft loss almost $1 billion, and Uber lost $1.8 billion - both have lost money since their inception. If "recognizing drivers as employees could destroy their businesses", maybe they were never viable business models to begin with, and this is just the final nail in their coffins. "Tech is not exceptional."

  83. @kenny fry. Perhaps. I don’t mean to support Lyft and Uber for their exploitive business model, but just want to point out that amazon lost money for a decade before becoming one of the most successful companies in the world. Amazon still has a long way to go in treating their employees ethically, but I don’t think they’re going away any time soon. People love using their ridesharing apps — they are truly amazing. Would they be willing to pay more for the convenience?

  84. I dislike taking taxis, the world over their drivers are impolite, bad drivers, charge much more than the ride is worth. Here in France, some make so much they drive TESLAs, Large Mercedes, even Porsche Cayenne. But, UBER and Lyft are making their money with slave labor, only the slaves often don't know they are slaves, this is the real genius in these companies; fooling some people all of the time, playing into the American dream of being 'independant'. This law is a good thing; until its world wide, I'll try to avoid both as often as I can.

  85. Other countries already have laws that protect such workers; bravo to California -- this is essential to ensuring fair pay for work.

  86. This will have the unintended consequence of raising the official unemployment rate. Now when the Uber drivers car breaks down and they can't afford to fix it they will be able to collect benefits.

  87. @Billy I'm confused- are you trying to say that providing a time-limited safety net to a person in that situation is a bad thing? (Also, not entirely sure that is how unemployment works....)

  88. @Kara No Kara I'm saying this trend will more accurately reflect what has become an almost meaningless statistic. But it won't look good for the next president.

  89. @Billy Um, no. If a factory worker's car broke down and they were unable to make it to their job (where they are classified as an employee), they would not be eligible for unemployment benefits. If Uber workers are classified as employees and, say, the company goes out of business leaving them without jobs, THEN the drivers may be eligible for benefits, but only if they have worked long enough - usually the better part of two years - AND earned enough wages to qualify.

  90. I don't think that any society will be sustainable based on the gig economy model. Use of contractors that pay low wages, no health benefits, and no retirement plan is a prescription for disaster. The theory that every worker should be responsible for their own benefits and retirement and government should be limited in a low tax environment is useful to companies that seek to cut costs to the bone but ultimately delusional and mean-spirited. Stuff happens in millions of peoples' lives all the time which renders the freedom and independence believed to be part of a gig lifestyle and work environment a cruel hoax.

  91. I am thrilled. Young people today are totally responsible for their jobs, their healthcare, their retirement, everything. That’s too much, and they hate it. Bring back what we older folks had: Some sense of security. No wonder suicides and mental illness are rising faster than employee wages. Thank goodness for California. If the greedy ones opposing this measure can’t get it, they will have to: Young workers today can’t stand for this any more.

  92. It is about time politicians do something about worker exploitation and income inequality. Of course if we had a federally mandated living wage and universal health care as they do in most of Europe, this would be less of an issue. Companies such as Wal-Mart have for decades taken advantage of all of us, by gaming the system putting many workers on food stamps and other aid which we pay for. Now they keep workers hours just under the required hours to call them full-time, avoiding expenses for benefits. As usual, California is again leading the nation in dealing with these kinds of thorny issues. There is no conceivable way the con artist in the White House would address this in spite of the fact that many, if not most, of the low income workers are his suppporters.

  93. As someone who left a company to form my own company years ago, I pay into SS and Medicare, both the employer and employee portion. I provide for my own health care and insurance. Being an employee gave me lots of benefits. It also constrained me in and made me feel like a cog in a big machine. For the person who views himself as independent who will now become an employee of a big company it may have very negative implications in their lives and how they view themselves. For others being part of large work force may be okay. We need cheaper and more portable health care if we're really going to promote a more entrepreneurial society. We need the public sector to start providing more services through taxation to provide some of the social safety net big companies formally provided. This seems to me a denial of entrepreneurship by the state to protect the state from their responsibility to deal with a rapidly changing economy. We need the public sector to start responding to the changing economy and actual provide services instead of providing contract work to private companies.

  94. @HL Universal healthcare

  95. Being an employee is horrible. You pay all the taxes (substantially more than as an IC, assuming you can deduct your expenses) and get very few benefits as a result. You are forced to be a cog in a machine that doesn’t fit. It’s a shame this bill passed. It is not a good idea. It will not solve anything. It will just reduce the take home pay of hundreds of thousands of new “employees” for no discernible reason.

  96. “Let’s be clear: there is nothing innovative about underpaying someone for their labor.” Thank you representative Gonzalez for pointing out this very real yet sometimes ignored truth. I’m glad the bill passed. I’m done with companies playing the “woe is me” card. Easy to say that when your model depends on the backs of the underpaid and underrepresented.

  97. @Wellie you are so correct. Now if we can only get companies like Wal Mart to pay living wages. Many of their employees qualify for food stamps.

  98. Over 25 years ago, the advice I got regarding hiring temporary staff was that if I tell them where they need to report, what to do, and when to be there, then said temp staff become my employees, and therefore are subject to with holding, benefits etc. Pretty clear that Uber etc (most of the so called sharing economy) want to avoid dealing with any such responsibility so that they can keep as much of the earnings as possible. You get what you pay for, and if drivers aren’t making a living wage after tax (Fed, state, social security, etc), turnover will be high, service quality low. I really have a difficult time understanding the US tendency to pay wages as low as possible. Yes, I get the profit motive, but it seems to me that if one treats one’s employees on the generous side, one is rewarded by loyalty not to mention happier and more productive staff likely to look out better for company interests. What possible difference could making a few millions (I’d retire if I just had 1 mill) less make to the leadership of these enterprises?

  99. Workman's compensation is left of of the arguments against the gig economy as well. Too many subs don't carry it. By pushing it off on subcontractors companies save substantially, especially in high risk trades.

  100. Great news. Equal rights and regulations for all employees (if it looks like a duck and acts likes a duck. it is a duck) and employers. Mew technologies should not be exempt from the standard legal employment processes.

  101. If Uber, Lyft, and Door Dash have $90 million to toss around to influence legislation, they certainly have enough disposable income to pay their drivers more. Please.

  102. Great. These companies will reduce the amount of workers they have. Good job CA, I guess the streets were getting a little empty with homeless.

  103. At last. Put some of the money the shareholders into the pockets of the people who are actually doing the job. So some of the bigwigs complain that this might destroy their business. But the business of becoming a billionaire in a few couple of years is not a given right to anybody. We have already read enough about Amazon and their distribution and I most sincerely hope Bezos and the other guys grow up and learn to take som responsibility for those who actually make their silly wealth possible. These money and power addicts just don't get that money will be of no use in heaven.

  104. If you think companies care about the people who do the work for them, look at how these businesses are fighting this bill and think again -- and call a Yellow Cab.

  105. I use Lyft. I find it convenient and efficient. I will gladly pay 20-30 percent more if it means the drivers get better pay, benefits etc.

  106. @Caracal I use Uber and I’m also willing to pay more if it means even a small step towards having a more egalitarian society.

  107. Thed concept of the gig economy ISN’T innovation. It's a regression to the 1880s.

  108. It’s piecework. It’s similar to the 1800s in that you get paid per task you do. There is nothing wrong with that. Hourly wages reward the least competent employees and punish the best and most effective.

  109. @Matt Ivan The idea of punishing a worker who doesn't please an employer is why we wrote labor laws that rid us of the horrors of the 19th century's sweat shops, cotton fields, coal mines, and so on.

  110. At its most basic, the externalization of healthcare and environmental costs away from corporations is a bad idea!

  111. I agree that companies should be responsible for environmental costs associated with the business they conducted, but health care for their employees is not their responsibility anymore than providing clean drinking water in their homes is a company's responsibility. Access to good health care is a human right that we as a society, not individual companies, are responsible for.

  112. This is messy for both sides. Maybe a simpler solution would be to allow multiple unions to form based on areas. All drivers must join unions. Unions can negotiate pay benefits with companies.

  113. That’d be smart enough. I really think gig workers need more protections. But just know making them “employees” isn’t going to do much to help. They’re going to lose tax deductions. Pay more in tax. Have less flexibility. Have fewer benefits (Uber and Lyft aren’t going to provide benefits packages or retirement funds to these “employees” are they? Pretending otherwise is folly).

  114. I've been a member of the gig economy for over 40 years. Many musicians have been stuck in it, except for union jobs for a long time - longer than Uber and Lyft and others have been around. Here's one of my many stories: I was teaching flute at a very expensive private school in Westchester, NY. I was a contract employee and had about 15-20 hours of work a week. I had to keep to their schedule, follow their rules of when to arrive and when to leave, go to meetings, perform on school concerts (no pay) etc. They paid a good hourly wage at the time of @$48 an hour. No social security, no taxes withheld etc. And no job security as my story will show. They treated all the other teachers the same way and finally we all got frustrated enough to complain to the musician's union, Local 802. I agreed to be the one to contact the union (we were all members). Local 802 agreed they were breaking the law on contract workers and contacted the school. I was immediately fired!! This was over 20 years ago, so I'm thrilled that the tide might finally be turning for gig economy workers and hope that other states adapt this new law. Thank you California for leading the way!!

  115. Human nature is fascinating and ultimately so very sad. Crowd sourcing rides to cut down on pollution, dangerously packed highways and streets and offering a way for independent workers to use their cars to make a wage turned into Uber's sharecropper economy. It reminds me of those lovely idealists of the late sixties and early seventies turning into the out of control capitalists of the eighties and nineties. We've never met a good intention that we can't subvert to pure profit.

  116. "Uber and Lyft, which have hundreds of thousands of drivers in California, have said contract work provides people with flexibility. They have warned that recognizing drivers as employees could destroy their businesses." If your entire business model is based on treating your employees as though they aren't actually employees, in denying them benefits, then you DESERVE to go out of business.

  117. @Samuel Sort of like worrying about destroying the businesses of Attila the Hun's contract workers.

  118. Thank you CA. As someone who inherited contract workers and struggled in a nonprofit service to move them to be employees I am certain that for-profit companies have the means to treat workers humanely. Greed is the only barrier.

  119. “Uber, Lyft and DoorDash have pledged to spend $90 million to support a ballot initiative that would essentially exempt them from the legislation.” These "plantation owners" have a lot of spare cash lying around; money that was generated for the plantation by soon to be employees. If things will be so rough, why not use it to help defray future employee expenses?

  120. These companies are not innovators, they're just using new technology to take existing jobs and extract every last cent of value out of them. They remind me of Starbucks, which replaced thousands of quirky, neighborhood coffee shops with, drumroll --- coffee shops!, just charging considerably more. It's laughable the upset this bill is creating among these parasites; it's as if they feel entitled to a piece of everyone's action.

  121. In fairness to Starbucks, they charge more because they pay their staff better. They earn more than minimum wage and get benefits even for part time. I go there instead of places that don’t pay minimum wage and insist they tips are a better deal. What kind of tips can you make on a cup of coffee that justifies not paying them in the first place? I live in an affluent area and I find that the customers with more money are the ones that don’t tip, people who work in the service industries will agree. Rich people feel entitled to something for nothing.

  122. @stan continople SF had some great little neighborhood coffee shops, many of which shut down when their lease expired. Chains like Starbucks are highly restricted in this city but guess what many of those quirky little coffee shops were replaced with- other coffee shops!

  123. Ok, Cuomo and New York. Your turn. Let’s see if you can improve on California’s lead. Why are we leading instead of lagging?

  124. So they can finally lock in the 10.00 an hour that are the real wages of those poor souls ferrying tightwads about town.

  125. I think this is good. If they had not done this, every work place would start looking for a way to turn everybody into gig workers. Amazon, for instance, uses mostly “contractors” hired by another company to staff it in the holiday season. They’re worked like donkeys and slaves and paid peanuts. Any employer could make up an app or other platform and have workers log in etc as “gig workers” and before you know it everybody is a “gig worker.” Gig work shouldn’t mean cheating workers.

  126. @Freak The "At Will" contractual relationships today are the same as gig work. And more and more jobs are being sucked into this maelstrom.

  127. "GIG Economy" is just another exploitive business mechanism that ENORMOUSLY $ BENEFITS a few and cares Nothing for actual "people" who are Working because they Need to !

  128. Oh California, yet another reason we can’t have nice things. You just had to go and spoil it for the rest of us.

  129. Here's hoping this is a Norma Rae moment. Unions need to rise and protect an abused workforce. It needs to happen all across this country where profits have become more valued than people.

  130. @Bob Bruce Anderson There has never been a time when profits were not more valuable than people. And, worse, there has always been a time when some people don't realize that they aren't valuable, and do the work anyway.

  131. Uber was valued at 60 billion at one point. They can't afford this. Is that so hard to understand? If their drivers get hurt and need Workmans comp, all the people paying for insurance can just pick it up with higher rates, hospital cots and taxes. If they retire with little or no SSI, so what! C'mon people, these app-makers are disruptors and visionaries!

  132. Employers of long term open ended contract workers should be making payments to social security, Medicare and disability. Their employees should have quality healthcare. If your company’s business model is only profitable by using temp labor, that’s not a company, it’s a sweatshop.

  133. @Deirdre Agreed. These companies need to make a choice and can't have it both ways.

  134. @Deirdre My only disagreement with your statement is the last sentence of the first paragraph. The quality of employees’ healthcare should not be connected in any way to their employment! This is a strong reason to sever health insurance from employment and instead work toward a government baseline (i.e.,single payer) model—which could be supplemented by private insurance if desired.

  135. @Deirdre - Unfortunately, the common attitude throughout society is about getting what's mine (and more) - enjoying as much as I can, while I can. There is a deficit of gratitude, and respect and traditional threads of social fabric that build honorable communities, strong civilizations. How can people making billions off a business model of paying worker's less, how can they justify their life and socially maneuver a life of decadent greed so effortlessly... This issue about contractors is about more than business models, it's about American perspectives of entitlement, self and community. It is about being part of something greater than oneself - not about aspiring to be an island unto oneself, living on one's proverbial island of wealth of fame. The "identity" of a citizen in a modern democratic nation needs to be cultivated by more than the Walmart bill of rights that offers American's the right to sell and buy the cheapest stuff, America needs to ask once again about the national democratic contract (as well as natural ecological contract with Earth). What citizens must do and what the government must do - and how we can back to a better balance of citizen and government identity and responsibility.

  136. Many will hail the passage of this bill as a good thing. They could not be more wrong. Employment law needs to be changed — there is no logical reason why I can only put $6000/yr in an IRA as an individual but can put 55000/yr in a 401k, which requires an employer to offer benefits plans. There is little to no protection that will be available to gig economy workers who have been classified as employees under this bill. Uber drivers are not employees. They can drive whenever they want in their own car. They can wear whatever they want. There is no schedule. That’s the appeal of the job. And all of that will have to change as a result of this shortsighted and rushed reclassification of what our outdated employment laws need to apply to and in what manner. Further, the “tax cuts and jobs act” made it impossible for employees to deduct unreimbursed mileage expenses (while they can do so as a contractor). This is going to make their lives much worse in more ways than one. Employment has changed. The laws need to catch up. Waving a legislative wand and just classifying Uber drivers as employees won’t fix anything. It will simply make the disparities and the issues drivers face much worse. Their flexibility will vanish. The tax breaks are gone. Prices will rise. There will be fewer jobs. What’s the gain?

  137. @Matt Ivan' The laws have been there all along. Politicians are finally catching up and attempting to enforce them. Uber sleazed it's way to success. There have always been illegal cab drivers. Uber just found a way to exploit them.

  138. Finally. At least one state has had enough of modern slavery-all work and no benefits or job security. CEOs who earn 1000’s what their average employee makes but does not feel any impulse to balance the scales.

  139. Can we next work on the greatest creator of job insecurity, stress and anxiety in our society...and is regularly abused at all levels of companies: at-will employment Being able to release an employee “for any reason or no reason at all” is a corporate legal right that is simply abused by too many managements when a budget number is missed or the boss is feeling some agitation

  140. @M E R Agreed. Charles Dickens would be proud of CA's move.

  141. @S K Waters That's what unions are for.

  142. I'm always glad when a lawyer tells 'me' what makes sense for business.

  143. @Calirangr I'm always glad when my elected representatives protect me from the grasping schemes of plutocrats to enrich themselves by ripping off our society.

  144. @Calirangr Are you including lawyers employed by Uber or Lyft in your statement?

  145. ending digital piecework is the 21st century labor movement

  146. If there is no more gig economy, plutocracy will gag. But it's far from dead.

  147. The lead paragraph puts it well ... but not well enough. That is, the question should not be "Is work under Uber-like groundrules too insecure?" It really boils down to said work being too low paying. Think about it. There are some "driven" people (no pun intended) who either love their jobs or - think the proverbial 1st year associate at a law firm - who are chasing not a brass ring but a platinum one. For THEM, a 60- or 80- hour work week is one thing. It has a high cost, but it doesn't take mental gymnastics to see why those individuals make that choice. But the many millions who get more affluent people where they want to go a few minutes sooner or in greater comfort; ditto, those who put food on other people's table - THEY have more in common with slaves and piece workers of bygone days. Just as both of those were eventually outlawed - for good reason - I'm glad that California took the step that it did. We all know that if an employer gets enough people to work hard/long enough at low enough pay, said employer can get incredibly wealthy.... I randomly met someone yesterday who said, "Some of those bike messengers make $200/day," and he said it admiringly. On 9/11, when we honor the first responders who risked their lives, let's acknowledge that those on bikes ARE risking THEIR lives ... and when the "superstar" makes $20/hour in 2019 NYC - with an Seamless exec's bonus being 6 or 7 figures, there's no other word for the situation other than EXPLOITATION.

  148. These "innovative" apps are just the adoption of old-fashioned cottage industry practices by technological means. The "gig" economy is nothing more or less than an attempted end run around laws designed to protect workers and to provide at least a basic standard of living for them. It´s high time for it to behave like any other business.

  149. There’s good and bad to this. Each will shake out over time. In my hundred or so Uber rides I’ve learned that the “work when I want” flexibility is a huge benefit for drivers and making them employees could impact this. A lot will depend on implementation. This ruling may also foment change in the people who become Uber or Lyft drivers. This is not necessarily a positive thing. I personally like that the drivers are free agents because it is in their best interest to take care of passengers. They know they are being rated, and like being able to rate passengers. In my experience, Uber drivers are friendly and courteous. Cab drivers are notably less so and those drivers are employees. Another side is the entree this gives California or other states to meddle with other types of businesses and in the lives of people who have long worked as contractors. People such as freelance writers, video producers, actors, graphic designers, artists, reporters, and more. Even some lawyers and bookkeepers and accountants. These and many others make a living as independent contractors, paying their own health insurance and taxes. AB5 seems focused on app-based jobs in the gig economy, but many in the businesses and professions I noted do regular work for certain clients but are definitely not employees. Nor do they want to be. A better solution is to raise fares and let more money go to the drivers.

  150. If it isn't worth for Uber to have unlimited numbers of drivers on the road under the new law, then it clearly isn't worth it for the drivers either. Perhaps this will limit the number of drivers to those whose profession it actually is to drive, making the service safer, more reliable and more professional for customers; and more reliable and better paid for the drivers.

  151. This legislation doesn’t modify or modernize Uber and Lyft’s business model - it destroys it. Both companies should immediately suspend operations within CA, and throw all needed resources into the ballot initiative to overturn this law. All the CA voters dependent on Uber and Lyft, and all the Uber and Lyft drivers deprived of a livelihood, will ensure passage of that ballot initiative. Remember that Californians, when given the chance, always favour the rights of the individual (in this instance, to choose how she wants to live, including how many hours she wants to drive) over the state’s ravenous desire for control over people’s lives, and ever growing tax revenue. The AB-5 rescission ballot initiative is just like Prop 13 and the later ballot initiative that prohibited the use of racial preferences in CA public university admissions.

  152. What about companies like Google? Half of their workforce is contract workers who, even though they are paid well, lack the same protections.

  153. So... I guess it's back to taxi service, hotels and regular delivery, along with union dues and full wage taxes. Seems to me the gig economy came to be in Cali because we were fed up with the high cost and poor quality of service in all that stuff, but, I guess we forgot.

  154. @Kouzelna So your solution is to exploit workers?

  155. It is ironic that in the name of helping workers, lawmakers choose to restrict their freedom to flatter the egos of those upper middle class minds who pretend they are doing good. Mandatory vacations?? What about workers who don't want vacations and would rather earn money? It might be hard for some lawmakers to understand, but, most single low income workers don't "take vacations". They can't afford to travel and stay at resorts. All they can do is spend some days sitting in front of a TV. They would rather be working and have a chance to get ahead. Mandatory overtime? Ditto. Most single low income workers would rather work more hours, provided that they can choose the hours of additional work Requiring overtime pay for workers means they aren't as likely to be allowed to work as much as they like because paying time and 1/2 for overtime is too expensive (and a sign of poor management). Homemakers who would like to supplement the family income by fitting in a couple of hours of work while children are in school and between errands may lose that possibility. The coastal elites just have no idea what life is like for the working poor and struggling middle classes.

  156. It seems to me that it is you who has no idea what it’s like to be poor. Families, such as mine, may not vacation away from home very often, but we also don’t sit around in front of the TV when we’re on vacation. An enormous number of income-challenged families are single parent families some of whom work multiple jobs. And many families with two parents are families in which both parents work. Scheduling vacation time allows a parent to schedule doctor’s visits, attend teacher conferences and attend to other family matters (e.g taking our daughter to the DMV to get her license and taking delivery of a new refrigerator to replace our broken one). I don’t know anyone who doesn’t appreciate the option of taking vacation time even if a vacation at the beach isn’t in their plans.

  157. @ mac Everyone wants a vacation. Many people can’t afford to. Nobody WANTS to be poor.

  158. @Mac - I pray you will one day earn a living wage, take a vacation, have savings, and not need to supplement your full-time work with predatory side hustles. Then you might understand why this is good for you.

  159. We can't have low cost, customer friedly alternatives provided by willing part time drivers. How long until we increase licensing costs, perhaps make them buy medallions, regulate their fares and add carbon taxes. Perhaps we can even add a layer of union dues inlcuding extra fees so they can lobby these polliticians they need.

  160. @dave If your friendly free agent driver slams into a tree or hits another vehicle head-on, and you are critically hurt, who do you sue? The "willing" customer-friendly guy whose on his own out there without that proverbial pot? The folks for whom he doesn't work?

  161. If they are employees, how would they be responsible for those costs? That would fall on the welfare queen corporations.

  162. @Rea Tarr it is called insurance....

  163. Now, extend this to technology positions. There are many shady so called "consulting firms" who take advantage of technology workers. Those, who are US citizens, not just those on visas. Just down the road from here is IBM. They outsource to a contract company, which outsources or smaller companies, each taking a cut. I have personally seen, contract jobs advertised, fro senior system engineers, as low as $25/hour (no benefits). Jobs, that should pay well over $100,000/year. If California succeeds in this, and this spreads, the corporate gravy train will be over.

  164. @Nick Metrowsky In 2010, when I was at the Starbucks at Worldwide Plaza, I sat next to a man dressed in a suit going through architectural plans of a garden apartment house in New Jersey. I asked him if he was handling a closing. He said yes, but he was a temp. He was getting paid $50 an hour, was billed out to the prestige law firm at $125 an hour and marked up by the law firm to the client to $500 an hour since he was doing the work of a law firm partner, not an associate. Some prestige law firms outsource document review to India where the lawyers are paid $5 an hour. The client s charged $100 an hour for the work.

  165. @BigGuy I'm sitting in a doc review room in midtown right now surrounded by NY barred attorneys with law degrees from Columbia, NYU, Fordham etc making $32 an hour. We're not even allowed to put the law firm's names on our resumes, even after working at the same firm for years and years. Some of us make out a bit better at $50-60/hr for foreign language review, but still no benefits. A friend worked at one firm for 6 years and never got one paid holiday. Not even one Christmas day. If there are computer problems, you're sent home with no compensation. The client on that matter was one of the biggest banks in the world. Did I mention we don't even get paid for a half hour lunch break during 10 or 12 hour work days? Insanity, but I've got 3 kids to feed, so here I am.

  166. Since I see many cars with Uber and Lyft logos, does that mean these drivers will be employed by both companies? If so how's that's going to work? double-dip on Social Security and other?

  167. @laurent Social Security and Medicare is paid according to the earnings. How can this be thought of as "double dip?" And, even if it were, what's the problem; whose is it?"

  168. @laurent You don’t understand how social security works at all. Nobody can “double dip”. You pay in your whole life no matter how many jobs you have, and people pay NOTHING on annual over 100k a year. Hope that helps!

  169. @laurent It would not double dip SS as it would be no different than someone working at Walmart and Home Depot at the same time. SS is a fixes % up to $132900 per year. I doubt many Uber/Lyft drivers are hitting that amount, and if they did it would be refunded when they file their taxes. Yes the employer would still be paying, but what's wrong with that?

  170. This is excellent news. Anyone who works for a business or a corporation is an employee, period. For too long, corporations have exploited workers by keeping them in tenuous positions, falsely labeling them as contractors, denying them benefits and legal rights, overworking them, shunting business costs onto the employees, and grossly underpaying them. The "gig economy" is a cutesy, corporatist buzzword that masquerades as hip and technologically cutting edge. In reality, it's just another way for a tiny fraction to become outrageously wealthy exploiting the work of others, and degrading the overall quality of life and compensation for working people in this country. Enough is enough.

  171. I suppose this would include Amazon delivery drivers.

  172. The anti-worker and anti-union crowd is out in droves in these comments. This law is hitting big businesses where it hurts, evidentially. Solidarity forever!

  173. @Corbin Is it really anti-worker to provide an OPTION to let workers drive whenever they want and set their own schedle and earn a few extra bucks? I would think this is the definition of worker freedom.

  174. This is a good thing. I am disappointed that New York has not enacted similar measures. One point neither Uber or Lyft want to advertise - nobody is going to be young and healthy forever. On this 9/11 anniversary this is a point to keep in mind. Eventually all these independent contractor or their families will need medical care; they will need to use disability insurance which they will not have thanks to the so-called gig economy. Everyone will get old - what retirement funds will these once young drivers will have for retirement? Where will they turn? Welfare and public assistance? All the while the owners of both Lyft and Uber and all the other copycat “employers” have piles of money stashed in foreign bank accounts. Lyft and Uber and all the others like them are exploiters. The public needs to be aware of this.

  175. Go back in time twenty years. Our government was having trouble recruiting enough doctors, dentists, nurses and dental hygienists to join the military services. At the time, our government contracted for these types of services with large companies that in turn hired the individuals, paid them as employees along with their social security, etc., and then assigned them to work at the military facilities. But these professionals were underpaid by these companies, so the shortage continued. “Personal Service Contracts,” wherein individuals contracted directly with the government to provide personal services, such as medical services, were deemed illegal by our government, so our government simply granted itself a waiver to the law and began “Individual Set-Aside, Personal Services” contracts. As the Comptroller for the Northwest Dental Region, I helped develop, and awarded many of this type of contracts.

  176. Great news and law! I was thinking of this situation few years back about companies making money for CEOs and stockholders but workers doesn't get any benefits. Plus companies dont pay any social cost into social security or community benefits because if the workers got sick with no medical care, how are they going to supports their families or live, like if they get cancer or others major medical issues. So please think about buying stuffs from AMAZON because they started their own contractor drivers for their delivery! And Amazon CEO is worth over $100s billions dollars.

  177. If your business model relies on paying it's workers substandard wages in order to make a profit, then you have a rotten business model. This applies not only to the gig economy, but to the restaurant industry's treatment of wait staff. I just came back from Europe, where restaurant credit card slips do not have a line for tips. Yet the waitstaff were always courteous and prices were reasonable. It can be done. All it takes is treating workers as human beings, not disposable commodities.

  178. @Andy Right you are. Bravo and thank you.

  179. @Andy There's a name for the business model you are criticizing: it's called "capitalism."

  180. A lot of freelancers are going to lose the flexibility of their jobs because of this, and a lot of businesses are going to be unable to staff up and down to match demand. Overall, this will hurt the economy.

  181. @QED - Read the article? "Experts said that there is nothing in the bill that requires employees to work set shifts, and that Uber and Lyft are legally entitled to continue allowing drivers to make their own scheduling decisions."

  182. @NotSoCrazy Read economics 101 ? yes, they are legally allowed to, but can they do so economically ? or will the companies go out of business due to the cost of paying drivers for hours when there are no riders ?

  183. @QED Businesses that cannot pay their workers a living wage, pay their fair share of taxes and make a profit should not be in business.

  184. True landmark legislation, close enough to Labor Day to be remembered. It is a new beginning in the battle for fair wages.

  185. It's either legislation like this, or a Basic Income combined with Medicare for All. One way of the other, though, all Americans deserve security.

  186. This wonderful news is coming out of California despite the fact that we all live in the repressive Age of Trump. I strongly suspect that strongman Trump has already asked his henchmen to draft new rules that could have a disparate and negative impact upon this state. The other shoe has yet to drop.

  187. Now is when I’m proud to be a Californian. As an aside, how I wish some of these gig-style services were worker owned and operated.

  188. Massive win for the State of CA. Bravo. Best news to come out of Sacramento in a while. Next up - vaping companies.

  189. Uber and Lyft are more threatened by historic losses. I have used them and yes they are convenient but expensive and this will only make them more expensive. I am all for it though. Temporary employment and this gig employment is slavery in my opinion.

  190. @Astralnut The system is true predatory free-market economy where even the word "social" is despised as in social service.

  191. I've been a "gig" worker since 2011, but in the field of education, an area that is usually overlooked in the "are-they-employees" question. Right now the best-paying jobs in ESL teaching are online, mostly from China. As you might expect, these are all contract gigs. All workers deserve the right to be able to make a living, but I find gig work that requires all the traditional bells and whistles from its workers to be especially scandalous. In order to get the job I have now for a Chinese company, I needed to have a completed university degree, experience, and all the "normal" things one needs to get a job working with children. We have schedules (those take a dip when there is less student demand, reduced earnings absorbed - as in most places - by the workers), and punishments for not being able to work suddenly. Live online class IS the service of the company. The requirements of a "regular job" are there; the security and benefits of having one are non-existent. No amount of flexibility is worth the fact that many of us will be digging through garbage cans for sustenance when - for whatever reason - we can no longer work.

  192. @Sarah Looks like the Chinese were great students of our for-profit only economic system.

  193. We do need to wean the very rich off of their dependence on corporate welfare and near-slave labor.

  194. No doubt all those CEOs who signed that pledge to reorient their businesses around society not shareholders are cheering this new law. Or perhaps not. Likely they are looking for loopholes or contemplating moving their operations to Delaware.

  195. @Xoxarle companies, like Facebook, already headquarter their businesses out of Delaware for tax shelter purposes. This instead is dealing with markets which the companies operate in, as opposed to where they’re headquartered.

  196. Here is our good government stepping in to destroy a sharing economy it does not understand.

  197. @Andrei Radulescu-Banu Yeah, legislating a living wage. Terrible. Just Terrible.

  198. @Andrei Radulescu-Banu This is not a sharing economy, profit increases are not shared with the employees if the wages are stagnating while profits go through the ceiling. Employers do not think that there is anything wrong with child labor, 80 hour work weeks, no time off, safety, less than living wages, retirement and you name it. Labor had to fight, every inch of the way and putting their lives on the line demonstrating for better pay and working conditions. Employers aim to pay as little as possible, preferably nothing, ask Mr. Trump.

  199. Thank. You Democrats for fixing another problem that does not exist for sake of a political sound bite and political correctness. America is nation based on freedom and opportunity not government regulation and oversight to paraphrase Ronald Reagan the scariest words are I am from the government and I'm here to help

  200. @EAH Really??? Functioning nations have real and dependable government. Every failed nation also has failed government, that goes hand in hand. Before a regime change, the government has to be undermined and weakened. No government is even worse and will produce the same results, failed nations. Americans totally destroyed the Iraqi government and civil service that was some 16 years ago. Iraq still is a mess.

  201. All the law professors and legislators who now appear as "experts" in this matter are people who have absolutely no entrepreneurial talent. Hey, when I sold my house, went into debt to start my company these "experts" were not around to "help" me. Once I was successful they were poised to tell me how to run what I created. Of course if my business had failed they would have been there to help me pay off all my debts and feed my kids. Sure.

  202. What took so long? And why is legislation required? For decades friends and neighbors have worked as "contractors" for government agencies, big insurance and pharma, going to the same offices, taking direction from the same supervisors. working exclusively and at the direction of the entity that by some slight of hand could classify them as "contractors". Try that as a small business and you'll eventually be answering to state labor and the IRS, the consequences are real and very expensive. Nobody cries alligator tears over your the damage that does to your "business model". Those of us who have paid our employees above board, who paid into unemployment and social security and who struggle to conform to ever more complex and demanding regulations (regulations that make sense and contribute to quality of life and work/life balance) are celebrating the unmasking of the "gig economy", revealed at long last for the scam it is. A contractor at minimum should carry liability insurance and be required to pay into the employment security systems that are in place. They should be required to demonstrate their independence, through regular business transactions with multiple clients or customers who contract directly with them, not through an "app" or some other transparent subterfuge. As it is the "gig" economy is a cheaters paradise and yet another competitive hurdle for legit businesses.

  203. @Kelly The "gig" economy is the product of lawmakers letting the lobbyists write the laws. We need real, functioning government, we don't have it. The Civil Service is no more than a skeleton from what it used to be and it shows.

  204. As an investigative contractor for a government agency for many years, i always felt like a second class citizen, even though I was treated well enough. I hope the California law inspires most other states to follow suit.

  205. Drunk driving deaths are down 15 percent in CA due to Uber and Lyft. This law will kill people. No one has to drive for a ride-sharing service. Just let the business be and let grown-ups make their own decisions about how they work, where they work, and for whom they work.

  206. @O'Brien Public transportation would solve most of that problem.

  207. @O'Brien Taxi companies existed long before Uber and Lyft, so nothing has really changed other than convenience which is easy to copy. In a lot of foreign countries now you can get a regular taxi the same way you get Uber or Lyft. If they go away something will take their place, just without a lot of hype and inflated stock prices.

  208. “Let’s be clear: there is nothing innovative about underpaying someone for their labor.” This!

  209. @kkane That is why we need labor laws to protect the rights of the weakest in the economic chain.

  210. Employmrnt lawyer here. This is the most important issue in employment law. From huge global corporations to start up "distupters," employers have sought to break the social contract American companies had for decades with their employees. They've done that by outsourcing work to independent contractors, who get no benefits, have no job security and end up with no severance when they're considered disposable. Gig economy workers are the 19th Century piece workers of our time. Talk to them, and you'll mostly hear that companies' PR about the benefits of flexibility and independence is a lot of self-serving blather.

  211. @Jonathan Ben-Asher We need more progressive politics like that. Right to work states is a big part of the unsocial labor laws and for-profit laws the nation has. The most socially regressive free-market economy of any advanced nation.

  212. This will be a pyrrhic victory for the workers. It is unlikely that they will receive all the legal benefits of being an employee and not an independent contractor. The more likely outcome is that they will become unemployed. It's pretty clear that as the cost of labor increases, we are moving to more of a self-service economy, from self-checkout lanes in stores to voice response systems in lieu of human operators.

  213. @J. Waddell If the workers become "unemployed" in the wake of AB5 who will step in. Are you suggesting that Uber and Lyft will no longer do business in California?

  214. I use Uber a lot. I haven’t met an Uber driver who uses it as a substitute for a full time job. Each one I’ve spoken to in my admittedly insignificant sample - from multiple cities throughout the day and night - uses it part-time, when they “feel like it,” to supplement other income or just to pass the time and make some money while meeting new people (retirees). Now, I think that anyone who can make more money to live a better life should seize the opportunity, so more power to Uber drivers if this is what they want. But what are the consequences for the thousands of casual, some-time Uber drivers who ::gasp:: actually like it that way?

  215. Use Uber more and you’ll meet more than a few full time drivers.

  216. According to the IRS, an employee is defined by three general categories: Behavioral control, financial control, and relationship. From a behavioral and financial stand point, gig workers do often closely resemble contractors. There's no instruction, no evaluation, no training. You download an app and off you go. You're not reimbursed for expenses. If you work a bad shift, the wasted time is your loss. You have the freedom to work with any and/or all ride-hailing companies. All this suggests contractor. However, there are two important aspects about the reide-hailing relationship that AB 5 is confronting. 1) "The permanency of the relationship is important. An expectation that the relationship will continue indefinitely, rather than for a specific project or period, is generally seen as evidence that the intent was to create an employer-employee relationship." 2) "Services provided which are a key activity of the business. The extent to which services performed by the worker are seen as a key aspect of the regular business of the company." Uber fails both tests dramatically. Uber ceases to exist without drivers. Some drivers treat Uber as a full-time gig. Uber is illegally mis-classifying at least some employees. The threat however is full-time employees are now subject to the not-so-fun parts of employment. Like training and evaluation and scheduling. You can trust Uber will do everything legally possible to ensure employees don't want to be employees anymore.

  217. @Andy You are wrong in saying that gig drivers are not evaluated. After every single ride, the company prompts the rider to evaluate the driver. Every evaluation is stored in the database tracking the driver over time. That is constant evaluation.

  218. @Ellie Drivers are not evaluated in the same way a regular employees are evaluated. There are no year-end improvement goals. The data on drivers is used more like a yelp review. You aren't going to lose your contract with Uber over poor customer service. There's no punitive action unless you're violating the contract. Like an inebriated driver for instance. Customers will simply avoid a driver with consistently bad reviews. The driver can't be "fired" for that behavior.

  219. I wonder why the bill only applies to app-based companies. Does that mean these issues were never seen as a problem until the advent of Uber and Lyft? After all, if most families owned a couple slaves, but a couple families owned thousands of slaves, would we pass a law that slavery is only outlawed for the couple families who owned thousands? On the other hand, if slavery is OK when no family owns too many, why isn't it also OK for the families who own thousands? Apologies for the extreme analogy, which some might find jarring. I've long enthused about the role of the Supreme Court, in their efforts to search for and define principles to hold to in our governance (despite an unfortunate record of poor decisions), and if this distinction between app-based companies and other types of companies is as arbitrary as it seems to me at the moment, this issue may be fodder for the courts.

  220. @TMJ You may want to use a different analogy than slavery.

  221. @Artaxerxes III I'm sorry you found the analogy too jarring for your tastes. I took that chance because I think the analogy directly illuminates the kind of principle that should be held to when penning laws. Reading about this bill, I wonder if there is a sound principle which could be evenly and fairly applied.

  222. Correcting for my typos: Employment lawyer here. This is the most important issue in employment law. From huge global corporations to start up "disrupters," employers have sought to break the social contract American companies had for decades with their employees. They've done that by outsourcing work to independent contractors, who get no benefits, have no job security and end up with no severance when they're considered disposable. Gig economy workers are the 19th Century piece workers of our time. Talk to them, and you'll mostly hear that companies' PR about the benefits of flexibility and independence is a lot of self-serving blather.

  223. @Jonathan Ben-Asher 1st job was state unemploymet tax auditor. big part of job was findig misclasdified indrp cons. It time to stop the race to the bottom.

  224. This isn't the real problem. The much bigger problem is the millions of "contract" workers corporate America hires.

  225. Let's be clear here: a free market has a point of equilibrium--it is that point where the supply (workers) is equal to the demand (contract jobs). The market should decide. Classic CA more government intervention.

  226. @mark Free market capitalism is an economic system not a religion. It is not perfect, and the law of supply and demand does not automatically solve its inherent problems. One of which is the inequities that exist between capital and labor. The typical worker has absolutely no negotiating power when dealing with their employer, and is often subject to ill treatment. It is more than reasonable for the state to remedy any gross inequities.

  227. Two months ago I took an Uber here in Paris. The delightful young man told me how Uber had changed his life: he was able to buy a home and get married, set his own hours etc. He also told me that having a gig was important has he had a congenital heart condition for which he needed regular treatment and non-physical labor was essential to his health. So what's the difference? He doesn't have healthcare costs. In France he is self-employed, but his Social Security taxes pay into national healthcare so he doesn't have the worry of massive premiums, pre-existing condition exclusions etc. He is also paying into Social Security for his retirement (not a lot, but something). Uber, as a corporation, is also paying into the system. The US has (so far) decided against any sort of national healthcare coverage that would ease the difficulty to self-employment, deciding long ago (and very wrongly) that healthcare should be tied to employment. Now corporations want no benefits tied to employment, they don't even want to call it employment! Someone needs to put a stop to it or the bottom will be very ugly indeed.

  228. @Concerned Citizen I'm American, and well aware of how it works in the US. "their business model in FRANCE is totally different than the US" Um, yeah, that's kinda my point. And it's not an alternative "business model" here. The benefits the driver is receiving are the law, he pays into the system - we all pay into the system - and we get affordable healthcare, which allows this man's life as an Uber driver to be possible.

  229. Given how wrong California has been on so many issues, it is likely that they are wrong again here and that the people of California will, on balance, suffer from this decision. For the rest of us, California is a petrie dish of what American socialism looks like—and we will observe how a State with so many geographic blessings can deteriorate into a Cuban/Venezuelan/Bolivian disaster.

  230. California gets some things right, some things wrong. Only partisan media argue that it is all one or the other.

  231. @ehillesum California is the 5th largest economy in the world. They currently contribute far more to the federal treasury in tax dollars than they receive, making them the state that contributes the most to shore up red states failures to their people. Perhaps you should learn more about what socialism really is before you make such a negative comparison.

  232. @ehillesum Oh, those poor suffering people in Denmark, France, Germany, Sweden, Finland, and the rest of the socialist states. How can they pretend to be so happy?

  233. This is somewhat confusing. Fed the law apply only to app based companies or does it include franchises? If it includes franchises then this law may be seriously disruptive to independent contractors and franchisees. Sounds like classic government overreach.

  234. @Mike L: It's overreach from your point of view. It's just-in-time for others.

  235. Another things, that states should be doing, it to eliminate exempt status for professional employees. Companies may pay high salaries for technology jobs, but the dirty little secret is that they can make people work well over 40 hours a week (on call coverage), and not get paid for either performing the coverage or maintenance work. In many cases, a person could be working 16 hour days or more, under certain circumstances. And, depending on employer, if performing on call, the expectation is to respond, and start acting, in under 30 minutes. Exempt employment was meant for managers. Companies have abused this so that it now includes almost all staff, except for lower level employees. By paying overtime, you will quickly see how wage disparity starts to narrow.

  236. @Nick Metrowsky There is actually a federal law that determines whether an employee can be exempt or not. It's pretty narrow. If tech workers don't meet the criteria, they should sue to become hourly workers entitled to overtime pay.

  237. Retail managers haven't been paid overtime and are forced to work an extra 15-20 hours a week, year round. Say a peep and you lose your job. Complain to an agency and you lose your job. Join a class action suit and you lose your job. Get rid of "exempt" status.

  238. What about FedEx?

  239. @Josh Levine: Are you saying passengers should stuff themselves into envelopes so they can be transported by FedEx?

  240. This is hardly a meaningful victory for labor. If being classified an “employee” equaled health care benefits then Medicaid wouldn’t be necessary for fast food, retail...all the minimum wage jobs. Yes these employers pay a tiny fraction of taxes into the system but it hardly equates into meaningful improvements for the worker. Wake up. We need a country that provides basic universal healthcare and child care (like France). Then the issue becomes pay scale and no, unskilled labor shouldn’t earn as much as educated or skilled labor. We do need to reprioritize skilled trades as education paths (like Germany) here.