Uber, Lyft, and Postmates Are Giving California’s New Gig Economy Law the Hard Pass

Gig economy companies are fighting back against a new law that is supposed to prevent them from hiring independent contractors with lawsuits and noncompliance.

  • Employee vs independent contractor: The California law, Assembly Bill 5, codified a State Supreme Court ruling that said workers were employees if they performed tasks related to a company’s regular business operations or were under the hirer’s supervision. The main targets are gig economy companies like Uber and Lyft, which have classified drivers as independent contractors to save money and to avoid certain employment protections.

  • Labor negotiations: Gig economy companies are talking with legislators and unions about creating a class of worker that is still an independent contractor but has more employment protections.

  • See you in court: Uber and Postmates also filed a federal lawsuit against California last week, arguing the law violated equal protection and due process.

But here’s the thing. Plenty of workers don’t like the new law, either. Freelance journalists tried and failed to win a TRO exempting them from Assembly Bill 5. One ridesharing driver told NPR he feared losing some of his schedule’s flexibility if he were designated as an employee.

THE VERDICT

The gig economy companies want to scuttle the California law quickly, as it could create a model for other states to follow. If their lawsuits and negotiations are not successful, the companies have started a $100 million campaign to get a ballot question in November that would exempt them from the law.