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TechnologyUber, Lyft drivers are one step closer to becoming employees in California

08:35  11 september  2019
08:35  11 september  2019 Source:   cnet.com

What California's AB 5 means for apps like Uber, Lyft

What California's AB 5 means for apps like Uber, Lyft AB 5 may have passed, but questions remain on how it will be implemented — and how far companies will go to stop it from being enacted.

Uber and Lyft drivers are currently classified as independent contractors, sometimes referred to as gig-workers, which means they don't get benefits When Uber filed to become a publicly traded company with the US Securities and Exchange Commission in April, it said, "Our business would be

Uber and Lyft declined to comment on the situation in California , but both companies have announced that they would provide pay to drivers nationwide who were Lisa Opper, a Lyft driver involved with a group called Rideshare Drivers United, which held demonstrations on Thursday in San Diego, Los

Now it's up to California Gov. Gavin Newsom to decide whether Uber and Lyft drivers should be considered employees of the companies.

Uber, Lyft drivers are one step closer to becoming employees in California© Provided by CBS Interactive Inc. Ride-hail drivers protested in front of Uber's headquarters in July demanding fair wages and a union. James Martin/CNET

California's State Senate passed proposed legislation Tuesday night in a 29 to 11 vote that could allow for drivers to be classified as employees, rather than as independent contractors. Advocates for the law, called AB 5, say this means workers will have more protections, like overtime, minimum wage and the right to unionize. AB 5 passed the State Assembly on May 29 in a 53 to 11 vote.

Uber, Lyft business could be upended by California gig-worker bill

Uber, Lyft business could be upended by California gig-worker bill Drivers might become employees, dramatically changing both companies. Uber says, however, it doesn't plan to change driver status under the law.

Uber and Lyft are fighting a bill in California that would change the legal designation of their drivers .Credit SAN FRANCISCO — A bill in California ’s Legislature could soon force ride-hailing companies like Uber and Lyft to treat their drivers as employees instead of independent contractors.

Now playing: Watch this: Uber , Lyft drivers in CA closer to employment , AppleCare "Fight for driver flexibility in California ," read one notification Uber sent to its drivers that included a link to a petition against AB 5. "Recent changes to California law could threaten your access to flexible work

Uber and Lyft drivers are currently classified as independent contractors, sometimes referred to as gig-workers, which means they don't get benefits including Social Security, health insurance, paid sick days and overtime. Many drivers say this system has led to exploitation. They say they've seen lower pay, higher costs and longer working hours as the cost of living has risen over the years. Many contractors for other gig economy companies, like DoorDash, Grubhub and Postmates, have similar complaints.

Uber, Lyft drivers are one step closer to becoming employees in California© James Martin/CNET

Uber and Lyft have both said their business models hinge on drivers staying independent contractors. When Uber filed to become a publicly traded company with the US Securities and Exchange Commission in April, it said, "Our business would be adversely affected if drivers were classified as employees instead of independent contractors." One of the reasons for this is because Uber will likely experience a sharp uptick in costs.

Uber and Lyft are putting $60 million toward keeping drivers independent contractors

Uber and Lyft are putting $60 million toward keeping drivers independent contractors In light of gig worker protection legislation Assembly Bill 5 making its way through California's legislature, Uber and Lyft are amping up their efforts to do whatever they can to prevent it from happening. And in the event that the bill does pass, which would force Uber and Lyft to make their drivers W-2 employees, both companies are each putting in $30 million to fund a ballot initiative that would enable them to keep their drivers as independent contractors, The New York Times first reported. require(["medianetNativeAdOnArticle"], function (medianetNativeAdOnArticle) { medianetNativeAdOnArticle.

This California bill could force Uber and Lyft to treat their workers better. If passed, it could change gig worker Another possible effect of a bill like the one under consideration in California might be a limit on a drivers ’ ability to But, he says, the bill is just the first step in reforming gig economy companies.

In California , religious groups said they feared that small churches and synagogues would not be Even drivers for Uber and Lyft have been split on the bill. Some of them visited lawmakers’ offices in But Ms. Kitchen said she believed that she herself would have to become an employee of Mr

A Lyft spokesman said it was disappointed in the vote but was prepared to take up the issue with California's voters "to preserve the freedom and access drivers and riders want and need."

"Today, our state's political leadership missed an important opportunity to support the overwhelming majority of ride-share drivers who want a thoughtful solution that balances flexibility with an earnings standard and benefits," the Lyft spokesman said. "The fact that there were more than 50 industries carved out of AB5 is very telling."

Uber didn't immediately respond to a request for comment but has also said that if it couldn't strike a deal on AB 5, it'd take the issue to California voters by sponsoring a ballot initiative in November 2020 that would exempt them from the law. Both companies, along with DoorDash, said they'd spend $30 million each to sponsor the initiative -- bringing the total to $90 million.

Now that AB 5 has passed the California Assembly and Senate it goes to the governor's desk for signing. Newsom has said he supports the bill.

"Reversing the trend of misclassification is a necessary and important step to improve the lives of working people," Newsom wrote in an opinion piece in the Sacramento Bee on Labor Day. "California has the power to act so these workers can have a real voice at work -- one that can transform their lives and reshape our economy."

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