Technology: Uber, Lyft business could be upended by California gig-worker bill - PressFrom - US
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TechnologyUber, Lyft business could be upended by California gig-worker bill

01:45  12 september  2019
01:45  12 september  2019 Source:   cnet.com

Uber and Lyft drivers are not letting up on the fight for AB-5 and a union

Uber and Lyft drivers are not letting up on the fight for AB-5 and a union A number Uber and Lyft drivers are protesting outside of Uber's San Francisco headquarters to demand the passage of Assembly Bill 5 and the right to unionize. This is part of a three-day caravan across California organized by Gig Workers Rising and Mobile Workers Alliance. "The journey is inspired by the United Farm Workers 1966 pilgrimage from Delano to Sacramento, led by Cesar Chavez," MWA wrote on its blog. "Like gig workers in California, farm workers were thought to be impossible to organize and their exploitation was taken as a given by the public at large. The UFW proved the doubters wrong and we will too.

California ’s governor, Gavin Newsom, has endorsed the bill and is expected to sign it. The bill has implications for app-based services such as Uber , Lyft Under the bill , companies must consider a three-prong test when classifying a worker . That includes weighing how much a company directs the

The measure, Assembly Bill 5, would entitle gig workers to protections like a minimum wage and unemployment benefits. Legislators are expected to pass the bill before their session ends this week, presenting the strongest challenge yet to Uber and Lyft ’s business model, which relies on a corps of

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.

Uber, Lyft business could be upended by California gig-worker bill© 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 these gig economy companies, which have businesses hinged on bringing aboard hundreds of thousands of independent contractors whose labor is far cheaper than that of employees. The setup benefits the companies by shifting many costs to the workers. For example, Uber and Lyft drivers supply and maintain their own cars and also pay for their own health care. The drivers also aren't given benefits, such as sick days or overtime pay.

Uber proposes policy that would pay drivers a minimum wage of $21 per hour

Uber proposes policy that would pay drivers a minimum wage of $21 per hour On the heels of a driver-led protest outside Uber's San Francisco headquarters, where drivers showed their support for gig worker protections legislation (via Assembly Bill 5) and demanded a union, Uber is circulating a petition urging people to "protect ridesharing in California." In the petition, Uber advocates for a policy that would offer drivers a minimum of $21 per hour, paid time off, sick leave and compensation if they are injured while driving, as well as a collective voice and "the ability to influence decisions about their work.

Lawmakers in California have passed a landmark bill that would make it much more difficult for Last week, Uber and Lyft proposed a ballot referendum that could be presented to California voters The gig economy is based on temporary or freelance jobs. Often these are offered by app-based services

The bill would reclassify Uber and Lyft drivers as employees effective Jan. California lawmakers passed a bill Tuesday that would make it harder for ride-hailing and food delivery companies to classify their workers as independent contractors, a stipulation that has been at the heart of the gig economy.

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

Uber and Lyft have both said their businesses could be broken if they're required to reclassify their drivers as employees. The move would bring a new set of costs to the companies -- both of which are struggling to become profitable. Uber had two rounds 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.

Uber, Lyft threaten $60 million California ballot measure

Uber, Lyft threaten $60 million California ballot measure SACRAMENTO, Calif. (AP) — Uber and Lyft threatened Thursday to spend at least $60 million on a California ballot measure if they can't reach a deal with unions and lawmakers on legislation that would change the rights of gig workers. "We remain focused on reaching a deal, and are confident about bringing this issue to the voters if necessary," Adrian Durbin, senior director of communications at Lyft, said in a statement. The companies' team-up comes as California lawmakers debate a bill that would make it harder to classify workers as independent contractors instead of employees. As employees, workers are entitled to more wage protections and benefits.

California lawmakers passed legislation Tuesday evening that would reclassify many gig economy workers from independent contractors to employees, guaranteeing them labor protections and benefits ― and potentially upending the business models of tech companies like Uber and Lyft .

California lawmakers have passed a bill requiring Uber , Lyft , DoorDash, and other " gig economy" businesses to treat workers as employees instead The upshot could be fewer jobs for ride-hailing workers . Consumers could end up paying too. "Whatever the increase in terms of operating cost

Tony West, Uber's chief legal officer, didn't appear too worried during a press call with reporters on Wednesday.

"This business is incredibly adaptable and has withstood enourmous enourmous challenges to its business model and has always come through those stronger and more responsive," he said. "I do feel confident that we are going to be able to manage through this just as we have been able to manage through in the past."

Drivers will not be automatically reclassified as employees, even after January of next year.
Tony West, Uber's chief legal officer

Once signed by Newsom, AB 5 is set to go into effect on Jan. 1, 2020. Under the bill, all companies using independent contractors in the state will be put to a three-part test that looks at how much control the company has over its workers. This includes things like whether or not the company has workers wear uniforms, use the company's equipment and follow business mandates.

The Latest: DoorDash ups ballot measure threat to $90M

The Latest: DoorDash ups ballot measure threat to $90M SACRAMENTO, Calif. (AP) — The Latest on a California fight on gig workers (all times local): 4:30 p.m. The on-demand delivery company DoorDash has joined Uber and Lyft in threatening to put a measure on the California ballot regarding how it treats it workers, upping the total pledged spending to $90 million. The campaign announced Thursday is aimed at forcing a deal with lawmakers and unions on legislation around the rights of workers in so-called gig jobs. It comes as a bill that would make it harder for those companies to classify their workers as independent contractors makes its way through the Legislature.

To list workers as independent contractors, businesses have to show they do not control and direct the work , that the duties fall outside what the company normally does and the worker is “customarily engaged in an independently established trade, occupation or business ”, the California supreme

Uber , Lyft drivers face California gig - worker bill . Uber made the offer in a draft bill that has yet to be introduced in the California legislature, as an alternative to Assembly Bill Experts say labor costs could rise 30% if the bill passes, and drivers could lose the flexibility to work whenever they want.

West believes Uber will pass this test, however, and therefore its workers won't be required to become employees.

"Under that three-part test, arguably the highest bar is that a company must prove that contractors are doing work 'outside the usual course' of its business," Tony West, Uber's chief legal officer, said during a press call with reporters on Wednesday. "Just because the test is hard doesn't mean that we will not be able to pass it."

"Because we continue to believe drivers are properly classified as independent... drivers will not be automatically reclassified as employees, even after January of next year," he said.

California sets the stage

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.

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.

California just grievously wounded the gig economy. But Assembly Bill 5, the California bill that was approved by the state Senate on September 10th, is only the beginning of a long fight over the relationship between gig companies like Uber and Lyft and the drivers they employ. While it is likely

Uber , Lyft drivers face California gig - worker bill . Uber made the offer in a draft bill that has yet to be introduced in the California legislature, as an alternative to Assembly Bill Experts say labor costs could rise 30% if the bill passes, and drivers could lose the flexibility to work whenever they want.

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.

AB 5 could serve 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.

Just because someone really needs to work does not mean that their rights as a worker should be stepped all over.
Edan Alva, ride-hail driver

Michael Droke, a labor and employment partner at Dorsey & Whitney, said AB 5 will likely spur other states into action.

"While limited workers to California, other states are likely to enact similar legislation," Droke said.

Support for AB 5 was evident among ride-hail drivers 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 was involved in AB 5 organizing with the group Gig Workers Rising. He 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 prepare $60 million fight against worker classification bill

Uber and Lyft prepare $60 million fight against worker classification bill The fight over whether rideshare drivers should be classified as employees and therefore be eligible for benefits continues. The latest battleground is California, where a worker classification bill is currently being debated by lawmakers. Uber and Lyft say that classifying their drivers as employees and not independent contractors would endanger their businesses, and have threatened to spend a combined $60 million on a ballot measure to exempt them from the bill.

Legislators in California just passed a bill requiring app-based companies like Uber and Lyft to treat their contractors the same way they treat regular employees. Once California Gov. Gavin Newsom signs the bill , it would go into effect January 1, 2020. The bill would make app-based companies

The battle over a California bill that could upend the business models of companies that rely on gig workers intensified when three companies threatened to spend a combined million on a ballot measure if a deal can ’t be reached this year.

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.

Originally published Sept. 11.

Update, 2:07 p.m.: Adds attorney comment. Update, 3:11 p.m.: Adds comments from Tony West, Uber's chief legal officer.

Uber intends to treat drivers as contractors despite California bill.
California is likely on the cusp of making gig companies treat independent contractors as employees, but Uber doesn't think the potential law will change its business. In an update, legal chief Tony West maintained that Assembly Bill 5 (AB5) would let the ridesharing company continue to classify drivers as contractors if and when it becomes law. Uber wouldn't be exempt from AB5, the company claimed -- rather, it expected to pass the test that determined drivers' status, keeping them as contractors.

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