Northern California Record

Saturday, December 7, 2019

FBAC exec: Proposed ballot initiative by ride-hailing coalition 'would not mitigate other problems' with AB 5

Legislation

By Rich Peters | Nov 12, 2019

Uber

SACRAMENTO – A coalition of Uber, Lyft and DoorDash drivers last month submitted a ballot initiative to the California Secretary of State’s Office in an effort by ride-hailing companies to undo AB 5, which makes it more difficult for companies to classify gig economy workers as contractors.

The Protect App-Based Drivers & Services Act initiative would provide promises of increased benefits for such workers, who might otherwise be classified as employees under AB 5. Opponents of AB 5 have said the new law, which takes effect on Jan. 1, would lead to more labor litigation against businesses stick gig workers with less flexibility.

While some experts believe that a 2020 ballot measure such as this one would be the best way to deal with the new law, others are not so certain.

“(AB 5) will be narrowed to their drivers and would not have much impact on other workplaces,” said Robert Rivinius, executive director of Family Business Association of California. “(It) looks to me like it only affects app-based drivers and would not mitigate other problems we will have due to AB 5. There are lots of people in California who like contract work and it has been an important part of our economy. (It) will be interesting to see how it all shakes out. With the current legislature, we can’t expect any relief from them, either.”

The passing of AB 5 established a three-factor test to decide a worker’s status as an independent contractor. 

The three-factor test requires that (a) the worker is free from the hiring company’s control and direction in the performance of work; (b) the worker is doing work that is outside the company’s usual course of business; and (c) the worker is engaged in an established trade, occupation, or business of the same nature as the work performed.

Countering this method and the potential negative impact it may bring, the ride-hailing coalition’s proposed initiative reads that: “Hundreds of thousands of Californians are choosing to work as independent contractors in the modern economy using app-based rideshare and delivery platforms to transport passengers and deliver food, groceries, and other goods as a means of earning income while maintaining the flexibility to decide when, where, and how they work. … Millions of California consumers and businesses, and our state’s economy as a whole, also benefit from the services of people who work as independent contractors using app-based rideshare and delivery platforms.”

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