California Passes Landmark Law Regulating Independent Contractors

California Assembly Bill 5 (AB5) is well on its way to being signed by the California governor and, while we’ve covered it from the driver’s perspective, it could have an even bigger affect on other industries. Senior RSG contributor John Ince covers news on AB5, plus how older drivers earn less than their younger counterparts.

California just passed a landmark law to regulate Uber and Lyft [Vox]

Sum and Substance:  Senate lawmakers passed a controversial bill, known as AB 5, on Tuesday evening, after months of uproar from businesses and gig companies like Uber and Lyft. The bill will require businesses to hire workers as employees, not independent contractors, with some exceptions. That will give hundreds of thousands of California workers basic labor rights for the first time.

And despite an aggressive lobbying campaign, Uber and Lyft are not exempt.

Lawmakers voted 29-11 in favor of AB 5, and now the bill heads back to the state assembly for lawmakers to vote on amendments to the bill. Then it heads to Gov. Gavin Newsom for his signature. He has signaled that he will sign it.

“This is a victory to savor,” tweeted Nicole Moore, an Uber driver and organizer with Rideshare Drivers United.

My Take:  This is a sweet victory. All the talk didn’t really amount to much. In the final analysis, it came down to who had the votes, and in California, the votes went to the drivers.  But wait, it appears that the drivers don’t really have the votes. Read on!

California’s Contractor Law Stirs Confusion Beyond the Gig Economy [The New York Times]

Sum and Substance:  After months of bickering over who would be covered by a landmark bill meant to protect workers, California legislators passed legislation on Wednesday that could help hundreds of thousands of independent contractors become employees and earn a minimum wage, overtime pay and other benefits.

But even before California’s governor, Gavin Newsom, had signed it into law, the battle over who would be covered flared up again. Uber, one of the main targets of the legislation, declared that the law’s key provisions would not apply to its drivers, setting off a debate that could have wide economic ramifications for businesses and workers alike in California, and potentially well beyond as lawmakers in other states seek to make similar changes.

“California sets off a chain reaction,” said Dan Ives, a managing director of equity research at Wedbush who tracks the ride-hailing industry. “The worry is that the wildfire spreads.”

In California, religious groups said they feared that small churches and synagogues would not be able to afford making pastors and rabbis employees. Winemakers and franchise owners said they were worried they could be ensnared by the law, too. Even some of the contractors for the app-based businesses that have been at the center of this debate said the change could hurt them if companies like Uber, Lyft and DoorDash decided to restrict how often they could work or cut them off entirely. Under the bill, workers are likely to be employees if the company directs their tasks and the work is part of the company’s main business.

My Take: And so the battle rages. This likely will go on and on until it comes to the point where it goes on and on.

Why Older Uber Drivers Earn Less Than Younger Ones [LA ist]

Sum and Substance:  Older workers have been tapping into the gig economy in California. Some aren’t ready to retire. Others may face age discrimination when job hunting. But research shows that on certain apps, older gig workers are earning less than younger ones. “There could be a very substantial pay cut, per hour, when moving from a career job to something like the gig economy,” said Rebecca Diamond, a Stanford University economist who has done research on platforms like Uber.

Big changes could be ahead for gig workers in California. California lawmakers passed a bill this week that would reclassify many independent contractors as employees, with the aim of providing greater protections to workers who currently don’t receive the benefits of more traditional employment. Despite the lack of benefits, plugging into the gig economy has been an attractive option for some older jobseekers. The barriers to entry on many apps have been low, with gig platforms making it fairly easy for older workers to join.


Keith Cooney, who turns 65 in October, is an Uber driver in South Lake Tahoe. He usually leaves the windows down when he drives, letting his passengers enjoy the crisp mountain breeze and the scent of pine trees.

“They love the fresh air,” Cooney said. “I say, ‘Is that too much wind on you?’ ‘No, we love it.’ So I say, OK!”

Driving for Uber gives Cooney a chance to meet riders from all over the country. He said a typical ride lasts about 10 to 15 minutes, long enough to strike up a conversation about where people are from.

“I tell them I’ve been here about 20 years, I’m originally from New Orleans,” he said, his accent starting to come through. “They want to talk about the restaurants, the music, the food. So we carry on a conversation.”

Cooney may be reaching an age when workers in previous eras would consider retirement. But he said he has no plans to stop driving anytime soon.

My Take:  This article had an effect on me because I’m an older driver.  I’ve often wondered whether older drivers are getting the short side of the stick. What do you think?

Readers, what do you think of this week’s roundup?

-John @ RSG