SACRAMENTO – Ride-hailing drivers and supporters led by Uber, Lyft and DoorDash have formed a coalition and recently submitted a ballot initiative to the California Secretary of State’s Office in an effort to undo Assembly Bill 5.
The Protect App-Based Drivers & Services Act would provide the promise of increased benefits for such workers who might otherwise be classified as employees under AB 5 instead of independent contractors. The opponents of the bill have argued that the new law, which takes effect on Jan. 1, would lead to more labor litigation against businesses and less working flexibility for gig workers.
Many experts around the state believe that a reform such as this is much needed in order to reshape the bill and protect the many gig-workers across the state.
“This initiative is further evidence that a legislative solution is needed to correct the too-strict standards imposed by AB 5,” Kyla Christoffersen-Powell, president and CEO of the Civil Justice Association of California (CJAC), said. “The passage of AB 5 left the needs of many industries unaddressed and created a minefield for those who wish to hire independent contractors or be independent contractors – especially small businesses. Without a broader fix, we may see a floodgate of costly litigation that drives entrepreneurs out of business and negatively impacts California’s economy, with implications for years to come.”
A three-factor test was established in the passing of AB 5 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.
The coalition's proposed initiative reads: “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.”