California Passes Landmark Bill to Remake Gig Economy – The New York Times
But the bill’s passage, which codifies and extends a 2018 California Supreme Court ruling, threatens gig economy companies like Uber and Lyft. The ride-hailing firms — along with app-based services that offer food delivery, home repairs and dog-walking services — have built their businesses on inexpensive, independent labor. Uber and Lyft, which have hundreds of thousands of drivers in California, have said contract work provides people with flexibility. They have warned that recognizing drivers as employees could destroy their businesses.
“It will have major reverberations around the country,” said David Weil, a top Labor Department official during the Obama administration and the author of a book on the so-called fissuring of the workplace. He argued that the bill could set a new bar for worker protections and force business owners to rethink their reliance on contractors.
California legislators said the bill, known as Assembly Bill 5 and proposed by State Assemblywoman Lorena Gonzalez, a Democrat, would set the tone for the future of work.
“Today the so-called gig companies present themselves as the innovative future of tomorrow, a future where companies don’t pay Social Security or Medicare,” said State Senator Maria Elena Durazo, a Democrat. “Let’s be clear: there is nothing innovative about underpaying someone for their labor.”
She added, ”Today we are determining the future of the California economy.”
Ride-hailing drivers hailed the bill’s passage. “I am so proud of rideshare drivers who took time out of their lives to share their stories, stand up, speak to legislators and hope they take a moment to bask in a victory,” said Rebecca Stack-Martinez, a driver and an organizer with the group Gig Workers Rising.