California, USA — Rideshare giants Uber, Lyft and DoorDash are willing to spend $90 million against a bill that would recognize drivers as employees rather than independent contractors.
The California Bill, legally known as Assembly Bill 5, aims to rewrite the factors that determine a worker as an employee or independent contractor. If implemented, it would force many gig companies to reclassify their independent contractors as employees.
“Reversing the trend of misclassification is a necessary and important step to improve the lives of working people,” California Governor Gavin Newsom stated.
Indeed, the misclassification of workers as independent contractors has been a significant factor in the erosion of the middle class. Hence, the California bill will certainly open more benefits and earnings to rideshare drivers.
However, Uber, Lyft and DoorDash are opposing the bill, offering other alternatives and proposals instead.
Last week, the three giant gig companies pledged $90 million to a ballot initiative that would exempt them from it.
“We are working on a solution that provides drivers with strong protections that include an earnings guarantee, a system of worker-directed portable benefits, and first-of-its kind industry-wide sectoral bargaining, without jeopardizing the flexibility drivers tell us they value so much,” Adrian Durbin, Lyft’s senior director of Communications stated. “We remain focused on reaching a deal, and are confident about bringing this issue to the voters if necessary.”
Furthermore, Uber also backed up their ballot initiative by offering a new proposal. This includes paying drivers a minimum of $21 per hour, flexibility to earn more and work when, where and for whom they choose, sick leave and injury protection benefits, and bargaining rights for drivers.
Still, it seems that the bill will pass a full Senate vote before the legislative session ends Sept. 13.
On Aug. 30, the state’s Senate Appropriations Committee cleared Assembly Bill 5, moving it a crucial step closer to becoming state law.
According to the California Department of Industrial relations, employers often misclassify their workers as independent contractors for numerous reasons. Some of which includes avoiding payroll taxes, overtime payment, and providing meal periods and rest breaks. Additionally, these gig companies do not have to cover independent contractors under Workers’ Compensation Insurance.
Furthermore, Uber’s proposal would still let drivers pay for their gas, maintenance, and other expenses.