I have been listening to folks talk about the California bill (AB 5) that was just signed into law by Governor Gavin Newsom this minute. (OK, when this was written.) The provisions take effect on 1 January 2020, setting standards as to who is an employee and who is an independent contractor (such as drivers and delivery folks).
First, I’ll talk about what most folks think caused this bill to come into being.
Folks think this bill was created to force Uber, Lyft, Door Dash [and other new firm that hires (yes, they hire them!) gig workers] to pay their staff reasonable wages. (You do recall that Door Dash had the audacity to keep the tips folks provided their drivers claiming it was their money and not the drivers, right?) Let us also not forget that these Silicon Valley firms (that have yet to make a penny in profit) have been recalcitrant is dealing with labor unions who have been trying to unionize the drivers and contract for proper pay.
(Uber and Lyft are now going to fund a ballot recall measure campaign [with $ 90 million in funding] to have the citizens overturn the actions of the California legislature. Failing that, they plan to take this law to court. After all, their lobbying effort failed to achieve their exemption with which they were claiming they don’t hire drivers; those folks are independent contractors. If we didn’t have a clown administration in DC, Uber and Lyft would have federal pushback, too. [This administration has already eviscerated the Consumer Financial Protection Bureau and the Labor Department’s overtime rules.)
But, here’s the real fact. This law has taken two years to traverse the legislative path. Do you remember my post from 2 August 2017? (I’m shocked!) I spoke then how the carriers that have the authority (the legal right to deal with the freight) at the Long Beach and Los Angeles Ports have been screwing their truck drivers. Starting back in 2008, these hauling firms had to clean up their act- they could no longer use the dregs of the fuel supply, since their idling trucks at the ports continually degrade the air quality of greater Los Angeles.
As such almost every single one of the 800 firms controlling the Port of Los Angeles (this is really in Long Beach) and the Port of Long Beach decided to make their drivers cover these costs. They told their drivers they would become independent contractors and would “lease-to-own” these new trucks. Yeah, lease-to-own. Just like those folks who sell substandard homes to unsuspecting folks as lease-to-own. The vehicles the firms offer are at inflated prices, with provisos stating that late payments can obviate any ownership rights, and serve to lock the drivers into only carrying freight for the firms from which they lease the trucks. (You do know that makes these drivers indentured slaves, right?)
That was the driving force behind the legislation. But, with the thievery of Door Dash and the recalcitrance of Lyft and Uber, the California legislators were more than happy to add their firms to the mix. Still, the mix does not mean all drivers.
No, only those who exceed 30 hours of driving a week. This is the threshold at which the law stipulates they then get reasonable pay and benefits.
Now, it may mean these firms now limit all their folks to 29 hours a week.
We shall see.
How interesting that yesterday, spouse and I walked past a well known (in our area) bakery’s “day old” store before it opened. I happened to notice that EVERY delivery truck parked there had, on their cab, a notification that (although they had the logos and signeage of major baked good suppliers such as Bimbo) they were all “Independent Contractors”. I wondered why. Now I know why. Also knowing at least one person who “drives for” (yes, I know that isn’t correct) Lyft to supplement her pay as a teacher, I wouldn’t be surprised if hours are limited. I’m definitely staying tuned. It would be so sad that people in this gig economy already there because they can’t make a decent living with just one job end up getting hurt. It won’t be the heads of Uber, Lyft, etal. for sure.
The issue with Lyft and Uber drivers is that they don’t recognize the costs of the wear and tear on their vehicles. When those costs are factored in, the income they make becomes marginal at best. (I also wonder how many of them obtain the proper insurance on their vehicles…)