New California bill makes all app based companies treat workers as employees much to the disdain of Uber and Lyft

[AlTech]

I know this is older news, about a month old, but I haven't seen this posted in tech news.

 

One of California's newest bills, which was passed by the State senate and General Assembly and is expected to be signed off by the Governor shortly, is changing up the gig economy in California and as you can imagine this will really heavily affect tech companies.

 

The bill makes all app based companies treat their workers as employees much to the disdain of Uber and Lyft who were previously seeking an exemption.

 

The bill if signed into law would mean that all Uber drivers, Lyft drivers, etc would be considered employees and would need to receive all the benefits of being an employee including being paid at least minimum wage.

 

Quote

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.

The bill passed in a 29-to-11 vote in the State Senate and will apply to app-based companies, despite their efforts to negotiate an exemption. On Wednesday morning, the Assembly gave its final approval, 56 to 15. California’s governor, Gavin Newsom, endorsed the bill this month and is expected to sign it. Under the measure, which would go into effect Jan. 1, workers must be designated as employees instead of contractors if a company exerts control over how they perform their tasks or if their work is part of a company’s regular business.

 

Quote

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.

 

Quote

Ride-hailing drivers hailed the bill’s passage. “I am so proud of ride-share 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

 

Quote

Lyft said it was disappointed. “Today, our state’s political leadership missed an important opportunity to support the overwhelming majority of ride-share drivers who want a thoughtful solution that balances flexibility with an earnings standard and benefits,” said Adrian Durbin, a Lyft spokesman.

 

Hooray, this means that those people will be paid a lot better but probably also means the costs of services like Uber and Lyft will probably increase.

 

Sources:

Video

NY Times

[Princess Luna]

If I'm not wrong this has been the reality here in Brazil for a while... taxi drivers went head on against uber and similar apps from the very start and it didn't take too long for politians do something for their friends.

[Spotty]

16 minutes ago, AluminiumTech said:

Hooray, this means that those people will be paid a lot better but probably also means the costs of services like Uber and Lyft will probably increase.

Or they will just exit the market in States where this law applies and then all those people lose their job...

I doubt they would do that though. If according to that article they have "Hundreds of thousands" of Lyft/Uber drivers in the state of California, they would have millions of customers there which no sensible company would want to leave if it could be avoided.
They could just introduce a flat rate "California Surcharge" on to all trips for an extra $5. Make it super obvious to the customer that because of the State laws they're being forced to pay a lot more for the service, and hope that it puts enough pressure on politicians to change the law in favour of the apps.
Increase rates nationally to offset the cost?

Who knows what they will do, but you will end up paying for it somehow.

[yolosnail]

The fact that people make less than minimum wage and yet still continue to do Uber or Lyft confuses me.

If you can't make it work, maybe try doing something else

That applies to anything, not just these types of company

 

It's like how all the drivers for most couriers here are 'self employed' so they can get out of paying them properly. Instead they just get paid around 50p per package they deliver

[DrMacintosh]

waves my CA flag violently

[Zodiark1593]

46 minutes ago, yolosnail said:

The fact that people make less than minimum wage and yet still continue to do Uber or Lyft confuses me.

If you can't make it work, maybe try doing something else

That applies to anything, not just these types of company

 

It's like how all the drivers for most couriers here are 'self employed' so they can get out of paying them properly. Instead they just get paid around 50p per package they deliver

The people that I know that drive with Uber and Lyft use it as a secondary income, one without the commitments and interviews involved with a proper job.

[Blademaster91]

1 hour ago, yolosnail said:

The fact that people make less than minimum wage and yet still continue to do Uber or Lyft confuses me.

If you can't make it work, maybe try doing something else

That applies to anything, not just these types of company

 

It's like how all the drivers for most couriers here are 'self employed' so they can get out of paying them properly. Instead they just get paid around 50p per package they deliver

I don't see how people would do Uber or Lyft as their primary job, especially if they have to drive their own vehicle and pay for fuel,maintenance and car insurance.

I also wouldn't be surprised if they would put a huge tax on all trips, or just charge California customers double.

[BuckGup]

Is a mod on reddit consdered a worker? So then youtubers are considered workers? What extent does this cover

[Eaglerino]

24 minutes ago, BuckGup said:

Is a mod on reddit consdered a worker? So then youtubers are considered workers? What extent does this cover

reddit mods don't get paid in any respect, and youtubes have pretty clearly been contract workers. I thought uber and lyft drivers were too. does this stop all contract work in California?

[ARikozuM]

24 minutes ago, BuckGup said:

Is a mod on reddit consdered a worker?

No idea. 

24 minutes ago, BuckGup said:

So then youtubers are considered workers?

Sounds fair to me. What with all of the adpocalypse issues. 

 

[ARikozuM]

1 minute ago, Eaglerino said:

reddit mods don't get paid in any respect, and youtubes have pretty clearly been contract workers. I thought uber and lyft drivers were too. does this stop all contract work in California?

Only for app-based "employment". 

 

This seems like a better idea instead of forcing these drivers to band together to go offline only to drive up the price of rides. 

[melete]

23 minutes ago, BuckGup said:

Is a mod on reddit consdered a worker? So then youtubers are considered workers? What extent does this cover

 

The criteria is fairly complicated and multi-faceted, but you can find it here:

 

https://www.dir.ca.gov/dlse/faq_independentcontractor.htm

 

 

[Sharp_3yE]

5 hours ago, yolosnail said:

The fact that people make less than minimum wage and yet still continue to do Uber or Lyft confuses me.

If you can't make it work, maybe try doing something else

That applies to anything, not just these types of company

 

It's like how all the drivers for most couriers here are 'self employed' so they can get out of paying them properly. Instead they just get paid around 50p per package they deliver

It depends. It depends on tips. It depends on how you drive. Plenty of people are doing it as a second job as well. I know people who do it. They make more then minimum wage. I've done some food delivery. It all depends on how you do it. Smart drivers go out at the times that they make more. Plenty of people try it and then leave. Smart drivers know how to take advantage of it.

[Bananasplit_00]

8 hours ago, AluminiumTech said:

They have warned that recognizing drivers as employees could destroy their businesses.

maybe dont build your company around low paid slaves lol

[circeseye]

actually this bill doesnt just go after lyft and uber type jobs...because of the wording it effects anybody that uses a 10-99 with their employees. so effects a lot of areas like construction and such. self employment type jobs..news paper carrier (yea its still a thing) the list is pretty big

[spartaman64]

so now lyft and uber can tell you when to work and for how long? i dont think a lot of people understand that there are requirements for the employee also

[Anomnomnomaly]

The entire 'gig economy' is designed to benefit the company and not the people who actually do the work. It's been a loophole that's been exploited to deny hard working people basic employment rights. Now I'm in the UK and they have this thing here called 'zero hrs contracts'  which basically means you signed a contract to be employed but the company doesn't so much as guarantee you any hrs each week... yet it can demand you drop everything to work at virtually no notice what so ever.

 

There's been a growing backlash to this as companies and their directors rake in millions whilst hard working people have to rely on benefits and food banks to survive... Because they can't get a job with reliable hrs... and they're already being paid minimum wage for the measly few hrs they might get.

 

I'm completely in favour of companies like that being reigned in and forced to treat employees with dignity and respect, and to pay them a wage that you can live on. We've all struggled at some point and I'm sure we all know people who have been caught in a never ending vicious circle that only punishes those who are most in need of decent standards to begin with, whilst greedy, immoral and unethical companies/people do whatever they can to exploit them.

 

It's not a new concept... treat people fairly and you get better workers... exploit them and treat them like garbage and you have massive turnover of staff like these companies do... and then they whinge and whine that they can't find reliable workers.... I wonder why.

[Anomnomnomaly]

On 10/3/2019 at 12:36 AM, yolosnail said:

The fact that people make less than minimum wage and yet still continue to do Uber or Lyft confuses me.

If you can't make it work, maybe try doing something else

That applies to anything, not just these types of company

 

It's like how all the drivers for most couriers here are 'self employed' so they can get out of paying them properly. Instead they just get paid around 50p per package they deliver

When people are struggling to find work that they can do to fit in with their lives... such as students, single parents and so forth... a crappy job is still better than no job at all. Being forced to do a job that treats you like shit and traps you in a never ending cycle of poverty is not what all of this technology is supposed to be doing for the world.  We are supposed to be lifting each other up and out of poverty... not gleefully raking in millions of the suffering of those most in need of a decent, ethical and morally workplace.. people need to be able to earn a living wage and companies need to be investing in people rather than trying to stockpile as much cash as is possible for the benefit of that tiny group of super rich arseholes who already have more wealth that they could ever spend in 100 lifetimes.

[Nicnac]

It's abviously a problem that these jobs even exist. That some people are desperate enough to use their only valuable asset (their car) to make a tiny bit of income degrading their asset in the process until they can't afford repairs anymore.

I think the move to regulation of this business model is a step in the right way as these companies are in a way exploiting their workers. People paying for the service will certainly be able to afford higher rates.

[Trik'Stari]

I wish this would apply to more than just App based companies.

 

My parent company has most of its workforce employed as "temporary employees" or "contractors" or something, so they can pay us less and claim to be a small business for tax purposes.

 

this translates to lower starting pay and lesser benefits. Despite contractors making up a significant majority of the actual work done. There's always 2 or 3 "real" employees, and they're usually crap at their job and rather lazy. And I'm not talking about management either, talking actual workers.

[straight_stewie]

I have mixed feelings about it. On the one hand it makes sense for companies like Uber, Lyft, and GrubHub.

On the other hand, however, apps like Thumbtack are in a gray area: They provide professionals with what could be called "gigs", but do they really employ people, or are they more like a social credit network for contractors and handymen? Would Californian courts agree?

[Anomnomnomaly]

5 hours ago, straight_stewie said:

I have mixed feelings about it. On the one hand it makes sense for companies like Uber, Lyft, and GrubHub.

On the other hand, however, apps like Thumbtack are in a gray area: They provide professionals with what could be called "gigs", but do they really employ people, or are they more like a social credit network for contractors and handymen? Would Californian courts agree?

Would they fall under things like Gumtree or Craigslist... where people are advertising their services and the platform is merely that. So they offer a site for people to search for contractors rather than actually taking on the job and assigning it to one to complete.

 

We have other sites like that here in the UK, checkatrade for example allows contractors to advertise on the site and all they really do is (or are supposed to) vet the contractors. You post up a job you need doing and they can send you messages to bid on doing the job. I've put up a job ad on there once... but ultimately didn't go through with it because the electricians that got in touch and came out... never inspired confidence in their work or simply tried to rip me off with ridiculous prices... I have an old friend who's been an electrician for around 30yrs... and if wasn't for the fact he's 300 miles away, would come and do the job for me at a sensible price. But he has advised me on what the job should cost (not mates rates)... so when they start trying to add an extra 30-40% on top... I cannot trust them to be honest. I've no problem paying a fair rate, but I refuse to let chancers price gouge people because they think they don't know how much it should be costing.

 

So if those sites are kinda like that... I wouldn't think it would apply... they simply put you in touch with a contractor, they are not organising it and giving out the contracts and I would hope they not taking a cut of the work... Perhaps charging the contractor a fee for using the site would be fair and would not fall under the remit of this proposed legislation in my opinion.

 

But then.. I'm in the UK, so haven't got a clue about US legislation really.

[Brooksie359]

On 10/2/2019 at 7:41 PM, Blademaster91 said:

I don't see how people would do Uber or Lyft as their primary job, especially if they have to drive their own vehicle and pay for fuel,maintenance and car insurance.

I also wouldn't be surprised if they would put a huge tax on all trips, or just charge California customers double.

I know someone who does it full time and they suprisingly make quite a bit of money. If you can't make minimum wage driving uber then you are doing it wrong. I also know quite q few people who do it on the side as well. Most of them say they make quite alot per hour so this seems weird to me. Also the whole deal seems very stupid because if they are in an area where there aren't as many people asking for rides then they just get to sit around and do nothing while making minimum wage. I mean I get the point of job security but honestly I think if you can't driving uber or Lyft economically viable right now then they probably shouldnt be an uber driver or Lyft driver.

[Unixsystem]

On one hand I appreciate all the thoughtful and interesting discussion of the various facets of the issue. 

 

On the other hand we are probably 3-5 years away from self driving cars being reliable and a few more to become widely legalized and commonplace. At what point does the entire thing become completely moot? 

[Arika]

in unrelated new, Uber and Lyft shut down all services in California.