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TechnologyCalifornia bill could reset the rules for the gig economy around the country

23:35  11 september  2019
23:35  11 september  2019 Source:   cnet.com

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California 's Senate passed a landmark bill on Tuesday night that could make Uber , Lyft , DoorDash, Postmates and other gig economy companies reclassify What happens in California rarely stays there. By dint of its size, the Golden State often sets legal and regulatory standards for the country .

In California , religious groups said they feared that small churches and synagogues would not be able to afford making pastors and rabbis employees. Even some of the contractors for the app-based businesses that have been at the center of this debate said the change could hurt them if companies

Big changes are afoot for the gig economy. California's Senate passed a landmark bill on Tuesday night that could make Uber , Lyft , DoorDash, Postmates and other gig economy companies reclassify their workers as employees. Gov. Gavin Newsom has said he'll sign it into law.

California bill could reset the rules for the gig economy around the country© Provided by CBS Interactive Inc. Ride-hail drivers protest in favor of California's AB 5. James Martin/CNET

The prospective law, AB 5, could upend Uber, Lyft and other companies in the field, which have businesses hinged on bringing aboard hundreds of thousands of independent contractors whose labor is far cheaper than that of employees. The setup also benefits the companies by shifting many costs, such as supplying and maintaining vehicles, to the contractors, who also have to pay for their own health care and aren't given benefits, such as sick days or overtime pay.

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California is rewriting the rules . Newsom" — " California lawmakers rewrote the rules of employment across a wide swath of industries Wednesday in legislation Wall Street Journal: "Uber Vows to Fight California Legislation on Gig Economy " — " California lawmakers passed landmark

California lawmakers have passed a bill that paves the way for gig economy workers to get holiday and sick pay. Assembly Bill 5, as its known, will affect firms like Uber and Lyft, which are based in California and depend on those working in the gig economy . Some estimates suggest costs for

California bill could reset the rules for the gig economy around the country© CNET

Uber and Lyft have both said their businesses could be broken if they're required to reclassify their drivers as employees. Treating contractors as employees would bring a new set of costs to the companies, neither of which is profitable. Uber has had two round of layoffs in the past six weeks to control its costs.

When Uber filed to become a publicly traded company, it specifically identified the risk in a filing with the Securities and Exchange Commission. "Our business would be adversely affected if drivers were classified as employees instead of independent contractors," it wrote.

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IN A JOLT to California ’s gig economy , the state’s lawmakers approved on September 11th a landmark bill , AB5, that will force many firms to classify independent contractors as employees. California ’s governor, Gavin Newsom, a Democrat, had pushed hard for the change.

Though the California bill , as law, could clarify the relationship between gig platforms and their workers, it will also introduce some questions. But, he says, the bill is just the first step in reforming gig economy companies. There are other hurdles to cross for the California bill to be truly effective.

What happens in California rarely stays there. By dint of its size, the Golden State often sets legal and regulatory standards for the country. The state is the largest by both population and economic activity, and that size means companies around the world have to meet its often-strict and precedent-setting standards if they want to tap the lucrative market.

In addition to AB 5, the state passed the California Consumer Privacy Act, which sets standards for collecting information online and goes into effect in January. The state's rules and laws on fuel efficiency, emissions and air quality have affected automakers around the world. And the California Assembly just passed a bill that would allow college athletes to be paid for the use of their likeness.

San Francisco and Oakland passed the earliest laws in the US curbing the use of facial recognition technology, and San Francisco was among the first cities to curb Airbnb's business, requiring hosts to be registered with the city.

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.

The California Supreme Court just changed the game in a big way for gig economy companies and the "That may be the only thing that can get around an ABC test," says Lebowitz, noting that ( The ruling does not change the definition of contractor for the purposes of federal taxes and other U.S

Legislation making its way through California ’s Senate could grant gig workers employee status. The memo, the first of its kind on the gig economy , ruled that drivers were in “complete control” of their cars, work schedules and log-in locations, making them independent contractors with “entrepreneurial

Many ride-hail drivers see California's AB 5 as a first step to broader oversight of the gig economy. Already New York City ensures drivers earn at least $17.22 per hour for each trip they make and has put limits on fleet sizes to prevent congestion. Washington state and Oregon have considered legislation similar to AB 5.

In California, thousands of drivers across the state rallied to whip up support for AB 5 as it made its way through the legislature. They protested in front of Uber's San Francisco headquarters and organized a caravan from Los Angeles to Sacramento. Many met with lawmakers to push for the bill.

"AB 5 is only the beginning," according to Edan Alva, a ride-hail driver who says the momentum for change is building. "Just because someone really needs to work does not mean that their rights as a worker should be stepped all over."

Uber and Lyft have said the majority of their drivers don't want to be employees, a status that would change the relationship between the companies and the workers. The companies have said that if they couldn't strike a deal on AB 5, they'd take the issue to California voters by sponsoring a ballot initiative in November 2020 that would exempt them from the law. Along with DoorDash, Uber and Lyft have said they'd spend $30 million each to sponsor the initiative.

"We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need," Adrian Durbin, a Lyft spokesman, said in an emailed statement.

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