A bill working its way through the California government, AB5, could force gig economy companies to reclassify their largely “independent contractor” workforce as “employees.” New York Times reports that Uber and Lyft have tried to broker a compromise that would keep their workers as “independent contractors,” thereby keeping them exempt from most of the protections of California labor law. But the bill’s supporters are reportedly not willing to compromise.
As a result, Uber, Lyft, and DoorDash pledged $90 million to support a ballot initiative to overturn AB5 if it passes and is signed into law by the governor, reports NYT. In California, ballot measures — if they win a majority vote from the people of the state — can often override an act of the legislature. If their lobbying fails to convince legislators, Uber, Lyft, and DoorDash plan to lobby California citizens directly.
In response to the $90 million pledge, AB5’s sponsor said:
Billionaires who say they can’t pay minimum wages to their workers say they will spend tens of millions to avoid labor laws … Just pay your damn workers!”
Uber would prefer its alternative proposal, under which it would be exempted from AB5 in exchange for paying its drivers $21 per hour, but only while they have a passenger or are on their way to picking one up, reports NYT. After deducting the cost of gas, insurance, and vehicle maintenance, $21 in gross pay can work out to as little as $4 per hour, reports The Verge. If Uber drivers were treated as “employees” under California law, Uber would need to reimburse its workers’ driving expenses, as well as pay them for all hours worked — not just time spent driving to or from a customer pickup or drop-off.
But Uber’s counter-proposal “means they are really nervous,” says Professor Dubal, a labor law professor at Hastings. Dubal notes that “[t]hey could have offered something like this years ago — and didn’t.”
A spokesperson for Uber said that the company would pursue a ballot measure to overturn AB5 only as a “last resort,” reports NYT Uber still hopes to lobby for an exception to AB5 before the bill passes.