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Uber, Lyft, DoorDash Try End Run Of California's AB5 With New Bill

Uber, Lyft, DoorDash Try End Run Of California's AB5 With New Bill

The biggest names in the gig economy are seeking to put a ballot proposal before California voters in an effort to overturn a new state law that limits the firms' ability to use independent contractor drivers.

Uber Technologies IncĀ (NYSE: UBER), Lyft IncĀ (NASDAQ: LYFT) and DoorDash filed paperwork Tuesday for the Protect App-Based Drivers and Services Act.

Although not mentioned by name, the Employee and Independent Contractors bill, otherwise known as AB5, which goes into effect next year, is the initiative's target.

"Recent legislation has threatened to take away the flexible work opportunities of hundreds of thousands of Californians, potentially forcing them into set shifts and mandatory hours, taking away their ability to make their own decisions about the jobs they take and the hours they work," according to the text of the new initiative.

After AB5 passed, Uber, Lyft and DoorDash pledged they would spend up to $90 million to overturn it.

AB5 laid out the definition of an independent contractor for California employers, requiring use of the "ABC" test when classifying workers as independent contractors or as full-time employees. The test's "B" prong is considered the most difficult hurdle, as anyone who is classified as an independent contractor must "perform work that is outside the usual course of the hiring entity's business."

The California Trucking Association and the Western States Trucking Association both opposed AB5, as the B prong was seen as blocking motor carriers from hiring owner-operators. Port drayage, in particular, depends on independent owner-operators due to the variable demand for moving containers.

The new ballot initiative seeks to define an app-based driver as an independent contractor if the hiring entity does not require specific days or hours when a driver must be on call through the particular app, does not require that the driver accept any specific rideshare or delivery request to remain in the app network, and does not limit the driver from other apps or occupations.

The initiative also seeks to mitigate some of the problems that led to AB5 in the first place, such as the lack of benefits and the inability to guarantee wages.

The proposal says employers of independent contractors would be required to provide a healthcare subsidy that would be equal to the average contribution required under the Affordable Care Act.

Employers would also have to guarantee minimum earnings for a contractor set at 120% of the minimum wage.

Other provisions include $0.30-per-mile compensation for vehicle expenses starting in 2021 and subsequently adjusted for inflation, insurance coverage for on-the-job injuries, protection against discrimination, criminal background checks for drivers, zero-tolerance policies on drug and alcohol use, and driver safety training.

The ballot initiative is now subject to a 30-day public comment period. Under California's ballot process, once the comment period is over, the state's attorney general will issue a report to the legislature and the secretary of state. After those agencies respond, the initiative's sponsors then have approximately 180 days to get the required signatures to put the ballot to a statewide election.

Image Sourced from Pixabay

Posted-In: AB5 California DoorDashGovernment News Regulations Politics General


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