What happens to Uber and Lyft drivers when AB 5 passes?

SACRAMENTO, California – Over Labor Day, Gavin Newsom declared his support for reclassifying an estimated 2 million workers in California as employees instead of independent contractors. Powerful unions see AB 5 as this year's signature work performance, and the bill is expected to pass the state Senate next week – the last stop before heading to the governor's desk.

A caravan of Uber and Left drivers passes the capital Sacramento as she howls and flags before a rally in support of AB 5, a bill that would change the employment rating for workers like Lyft and Uber, August 28, 2019 Drivers caravans for three days from Los Angeles through the Central Valley and Bay Area to Sacramento to show their support for the bill. Photo by Anne Wernikoff for CalMatters

Photo by Anne Wernikoff for CalMatters

But while Democratic presidential candidates have used labor standards for gambling as a campaign problem, many questions remain about AB 5's implications, especially for drivers from Uber and Lyft who counts in the hundreds of thousands. Will they become employees when AB 5 becomes law? Will your salary go up? Will they lose their flexibility?

Much of this remains in flux. Uber and Lyft say that today's economy on demand requires a new framework that is first in the country, and they want California to forge it. Last week, big game consultants for $ 90 million provided a ballot with smaller legislators finding a way to protect their business model. At the same time, the companies recognized that their drivers deserve better pay, more benefits and greater representation by offering some sort of negotiation with the rideshare industry.

Democrats and Labor leaders are working their way through this problem, which means even after the passing of AB 5, negotiations will continue. On Wednesday, Politico, head of the California employers' union, Art Pulaski, reported on sharing a roadmap for how unions can cut through legal uncertainty to unite gig workers. Newsom also says he wants to create something new, which would deteriorate his reputation as a friend of both technical and manpower.

But with days left in the current legislative session, political rhetoric continues to build up. This is what we know (and don't know) so far about this contentious work conflict:

A man holds up a sign that says, "I don't need a job , I just need customers, & # 39; during a meeting in opposition to AB 5, a bill that would change the way independent contractors are classified by their employers, July 9, 2019.

Photo by Anne Wernikoff for CalMatters [19659006] What happens to Uber and Lyft drivers if they are categorized as employees?

Depends on who you ask. The companies say it will fundamentally change the hiring practices of the rideshare industry, forcing them to go on "on-demand" work, which has never been done.

That would probably mean that the companies would take on fewer drivers, and assign shifts much a restaurant or retailer could plan for employees. The companies say that drivers will lose a main attraction of the platform – flexibility.

"We will probably need to exercise more control over drivers, and tell them where to work, how to work and who they can work for. Uber is likely to hire far fewer drivers than we currently support, and we will likely need a minimum number of hours per week. Planning and rigid shifts would become the norm, and Uber would probably prevent drivers from working for other rideshare companies, "Uber wrote recently.

The company says it will prevent drivers from signing when the number of drivers exceeds requirements, for example in a quiet neighborhood during working hours. Uber and Lyft warn that riders could see higher costs and longer waiting times. Transit desert riders, they warn, could lose the service altogether.

Steve Smith, a California Labor Federation spokesman, called these the scenarios a "corporate scare tactic" and said nothing that prevents companies from maintaining flexibility.

to employee status, companies would have to offer basic worker protection such as guaranteed minimum wage, overtime pay, social security and medical treatment, unemployment and disability insurance, and employee compensation, Workers can also get reimbursed mileage and maintenance. retøyene, which is not happening now.

Assemblyman Lorena Gonzalez speaks at a meeting in support of AB 5, a bill that would change the employment classification for employees such as Lyft and Uber, August 28, 2019. Photo by Anne Wernikoff for CalMatters

Photo by Anne Wernikoff for CalMatters

It will most likely be a tradeoff, writes Harry Campbell, a Long Beach-based driver who authored the blog and podcast about the Rideshare Guy. Drivers, he predicts, will lose some flexibility and be prevented from driving more than 40 hours a week to avoid overtime, or even 30 hours a week to avoid health care. There will be less incentive for Uber and Lyft to offer wave or dynamic pricing, which is now being used as a financial incentive to get drivers where demand is high.

On the flip side, drivers would receive a minimum wage plus mileage reimbursement. Another benefit would be paid regardless of whether there is a passenger in the vehicle or not, which is not happening now.

"It doesn't take a rocket scientist to realize that if drivers were guaranteed a minimum wage, you wouldn't be able to just turn the app on anytime from 10am to 3pm," writes Campbell, "because there would be too many drivers and not enough rides . "

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Remind Me, What Is The Dynamex Decision?

Routine Companies Have been in a legal gray zone since the California Supreme Court issued the so-called Dynamex decision last year, which made it more difficult to classify workers as independent contractors, the ruling established a three-part test, or ABC test, for certification of contractors, with the highest prevented the work being performed from being outside the company's core business.

AB 5 by Assemblywoman Lorena Gonzalez, a former Labor organizer and Democrat from San Diego, would codify ten's decision in state law. From a workers' perspective, this forces concentration companies to start paying their fair share of payroll taxes and to contribute to disability and unemployment insurance funds for workers. If they do not, AB 5 will allow state agencies, such as the Labor Commissioner, the Franchise Tax Board and the Department of Employment Development, to enforce misclassification.

Workers will also still be able to file their own lawsuits.

How soon can the shift happen?

Although AB 5 should come into force on January 1, 2020, do not expect any immediate changes. Since the inception of Uber and Lyft, rideshare companies have spent millions in litigation and settlement to try to prevent drivers from being classified as employees. This match is no different.

"If AB 5 passes, it will simply be a qualification of existing law," said Uber CEO Dara Khosrowshahi when asked during a revenue interview about California's efforts to classify drivers. "It does not immediately turn drivers into employees."

Expect both legal challenges and political haranguing to continue.

Is it a third way?

This is something to look at. In the last session, Uber and Lyft are working hard to get some sort of carving out, and they are planning a new construction as a win-win win for drivers, gamers and the state.

Let concerts Remain independent contractors would lift the costly legal battles Uber and Lyft have struggled for years on classification and let them work around AB 5. Allowing drivers the right to collective bargaining would, overnight, allow unions to add more than 200 000 members. And by making a third move, California would pave the way for struggling workers in the new economy.

How would gig workers join if they remain freelancers?

Good question. Right now, there is a conflict between the state's Dynamex decision, which would presumably move drivers from freelance to employee, and the federal government's treatment of gambling jobs as entrepreneurs, making them ineligible for the right to form a union.

In a confusing Newsom states that California can benefit from this inconsistency.

"Only when the National Labor Relations Act does not cover workers can states act to grant the right to organize a union so that workers can negotiate for better wages, benefits and employment conditions," he wrote.

Details are scarce, but this follows the same logic that Pulaski outlined, requiring gig economy players to be placed in a new category where they can remain freelancers but gain access to collective bargaining power.

RELATED: Independent contractors or employees? The California Bill Can Change the State's Gaming Economy

Would Everyone Go For This?

Unclear. Trade unions have been divided over whether gaming jobs should even get a carving out. On the one hand, Service Employees International Union and Teamsters have been willing to negotiate an alternative in addition to AB 5, a recognition that unions must evolve with the changing economy.

But the State Building and Construction Trades Council of California is refusing any concessions. Its leader, Robbie Hunter, was removed from Newsom's future by working commissions over the dispute.

It's easy to see why: The Construction Trade is an umbrella organization representing electricians, roofers, painters and a host of other skilled construction workers who currently enjoy current wages, training and job protection. If companies like Handy were allowed to cut out, it could threaten to make these careers a gambling job.

What about everyone else influenced by AB 5?

With so much talk about Uber and Lyft, it's worth remembering that AB 5 affects more than gaming jobs. The bill would sweep some workers across industries, from truck drivers and nail technicians to musicians and strippers.

Gonzalez has agreed to leave many workers out. In particular, she has granted exemptions to doctors, insurance agents, real estate agents, hairdressers and hairdressers who have rental permits for booths, dentists, architects, engineers and accountants.

She has also admitted waivers to travel agents, graphic designers, scholarship writers and marketers. Newspaper publishers have also sought exemption from the industry since many use freelance writers, photographers, editors and newspaper holders. The latest version of AB 5 includes exemption for freelancers as long as they do not contribute more than 35 submissions a year.

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