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How Will the Authorization of AB5 Impact Gig Economies?
On Wednesday, September 11th, the California state senate authorized legislation to reclassify certain groups of contractual gig economy workers as conventional company employees. The AB5 bill, which will be signed by Governor Gavin Newsom, will enact into law these changes limiting future gig economy potential. The gig economy provides freelancers and contract-based workers with an alternative to the traditional 9 to 5 job and supplemental income through app-based platforms. The AB5 bill targets many gig economy businesses and may affect ride-sharing companies such as Uber and Lyft, which have not been granted exemptions. Tony West, Uber Technologies lawyer stated, “Contrary to some of the rhetoric we’ve heard, AB5 does not automatically reclassify any ride-share drivers from independent contractors to employees. AB5 does not provide drivers with benefits. AB5 does not give drivers the right to organize. In fact, the bill currently says nothing about ride-share drivers.” Uber and Lyft help to supplement the gig economy with their worker base made of many independent contractors who do not receive company benefits.