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USCalifornia Lawmakers Pass Bill That Could Upend Uber, Lyft Model

08:40  11 september  2019
08:40  11 september  2019 Source:   huffingtonpost.com

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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 Gov. Gavin Newsom Signs Law That Could Upend Uber , Lyft . Uber and Lyft , whose hundreds of thousands of drivers are currently considered independent contractors, had lobbied After lawmakers passed the bill on Sept. 11, Uber said it wouldn’t reclassify its drivers under the new law

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 Pass Bill That Could Upend Uber, Lyft Model© Justin Sullivan via Getty Images Rideshare drivers hold signs during a protest outside Uber headquarters in San Francisco in support of California labor legislation and a union push.

The legislation, AB-5, clarifies the conditions under which a worker should be considered an employee ― and therefore entitled to benefits like a minimum wage, unemployment and disability insurance, and a right to form a union. It follows an “ABC” formula that workers can be considered independent contractors (A) only if the workers are “free from the control and direction” of the company that hired them, (B) their work falls outside the usual business of the company and (C) they are engaged in work in an independent business of the same type as the company’s.

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SACRAMENTO — California legislators approved a landmark bill on Tuesday that requires companies like Uber and Lyft to treat contract workers as employees, a move that could reshape the gig economy and that adds fuel to a yearslong debate over whether the nature of work has become too insecure.

California lawmakers have sent the governor a bill that would give new wage and benefit protections to workers at so-called gig economy companies such as Uber and Lyft .

It makes exceptions for certain groups of workers, including real estate agents, freelance writers, hairstylists and barbers who set their own rates and hours.

The language of the bill is based on a 2018 California Supreme Court decision in the case of Dynamex Operations, which established the ABC test for classifying workers as employees versus contractors.

“The misclassification of workers as independent contractors has been a significant factor in the erosion of the middle class and the rise in income inequality,” the bill says.

Major tech companies such as Uber and Lyft, whose hordes of drivers are currently considered independent contractors, have been lobbying against the legislation. Their companies’ bottom lines would be dramatically affected by having thousands of drivers newly classified as employees for whom they’d have to pay certain benefits, overtime, minimum wages and more.

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California Passes Uber & Lyft Employement Bill (Says Companies are 'Gaming the System') - Продолжительность: 14:58 The Apptrepreneur 19 151 просмотр. How Uber , Lyft and Others Could Be Upended By California ’s New Law | WSJ - Продолжительность: 6:17 Wall Street Journal

AB5, the contentious California bill that would upend the gig economy model of Uber , Lyft and other tech companies, moved a step closer to becoming a law . Most recently, Uber , Lyft , and Doordash have committed to spending a combined million to oppose this legislation, while publicly offering a

Hundreds of Uber and Lyft drivers with the organizing group Gig Workers Rising protested throughout California in late August, demanding AB-5’s passage and a union for drivers.

The legislation, which passed the California Senate in a 29-11 vote after overwhelmingly passing in the Assembly in May, will next go to Democratic Gov. Gavin Newsom, who is expected to sign it.

Several Democratic presidential candidates have come out in support of the bill and workers’ demands, including Sens. Kamala Harris (D-Calif.), Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), and South Bend, Indiana, Mayor Pete Buttigieg.

“American history is full of shameful examples where powerful industries exploited workers in pursuit of greater profits,” Warren wrote in an op-ed in the Sacramento Bee in August. “In many industries today, it takes the form of worker misclassification.”

Exactly how the law would affect rideshare companies and their drivers when applied in practice is still unclear. Uber, Lyft and other companies have committed tens of millions of dollars to back a ballot initiative that would push a separate classification for rideshare drivers.

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

Uber, Lyft drivers are one step closer to becoming employees in California AB 5, a proposed bill to reclassify ride-hail drivers as employees, passes the state senate. Now it's headed to the governor's desk.

This comes after lawmakers in California passed a bill yesterday, ordering the reclassification of drivers for the ride-hailing services. App-based companies like Uber and Lyft may soon have to treat their contract workers as company employees. This comes after lawmakers in California passed a

California Governor Gavin Newsom signed into law Wednesday a controversial bill that could upend the business models of ride-hailing apps like Lyft ( LYFT ) and Uber ( UBER ) by relcassifying some independent contractors as employees. In a statement on Wednesday, Lyft suggested it’s willing to

The heads of Uber and Lyft have argued for workers to remain as independent contractors, suggesting that as employees they wouldn’t enjoy as much flexibility and proposing that the companies could meet some of the workers’ demands by establishing a drivers’ association and working with lawmakers to commit to things like minimum pay.

Driver-led group Gig Workers Rising called the tech leaders’ proposals “a watered-down version” of the demands drivers have been making for months. One organizer, Annette Rivero, told TechCrunch that there was “no truth” to the companies’ claim that the legislation would affect drivers’ flexibility.

“After I did my taxes, I was operating below minimum wage,” driver and organizer Mostafa Maklad, 35, told HuffPost during protests at Uber’s headquarters in May. He’s been driving for Uber and Lyft for the past four years, studying at City College of San Francisco by day and driving 40 to 50 hours a week by night. Maklad said he struggles to afford housing in San Francisco and lives with six other people in a two-bedroom apartment.

This article originally appeared on HuffPost.
Read More

What is Uber's "usual course" of business? Much rides on answer.
A new California law makes it harder for companies to classify workers as contractors. The test has three parts, of which the toughest—and the point on which many gig companies are expected to fail—is the question of whether the worker performs work outside the “usual course” of the company’s business. To the average person, the answer in Uber’s case is probably a resounding no. Uber drivers give rides to Uber passengers and deliver food to Uber Eats customers. Uber isn’t Uber without them. But Uber sees it differently.

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