Uber and Lyft are pulling out all the stops against a bill in California that could turn drivers from independent contractors into employees overnight. AB5, as its known, passed the state Assembly a few weeks ago and is now headed for a hearing at its first policy committee in the state Senate. It aims to codify a California Supreme Court decision (known as the Dynamex Case) from 2018 that would instruct businesses to use an ‘ABC test’ to determine whether workers are independent contractors or employees. And as you’ll see below, Uber and Lyft FAIL this test with flying colors.
This bill is no joke since it could set precedent in other states and if drivers were to become employees, it would cost the companies a ton of money. We don’t know exactly what life would look like for rideshare drivers if we were to become employees, but it’s clear that Uber and Lyft see this as an existential threat to their business.
Last week, Uber’s CEO Dara Khosrowshahi teamed up with Lyft co-founders John Zimmer and Logan Green to pen an op-ed in the San Francisco Chronicle urging for a compromise that would allow drivers to remain independent contractors – I can only imagine how many revisions went back and forth between their respective handlers.