With just a week remaining in the state Legislature’s current session, ride-hailing companies Uber and Lyft are betting that a bill will be passed that will dramatically affect how they treat their drivers — and how customers get rides.
Assembly Bill 5 would require companies to meet strict guidelines to classify anyone working as independent contractors. In most cases, those workers would become employees. That means Lyft and Uber would need to make their drivers employees, with the resulting wages, benefits and the chance for union representation that goes with such a status.
The bill is authored by San Diego Democrat Lorena Gonzalez. Its intent is to codify a state Supreme Court ruling from last year that found a package delivery company had wrongly classified drivers as independent contractors. The court found that workers are employees if their jobs are key to a firm’s business, or if supervisors directed their work.
The ride-hailing companies say their app-based services are different from traditional employment in that drivers get to set their own hours, driving as much or as little as their desire. Nearly 70 percent of Lyft’s drivers, for example, work 10 hours or less a week. The opportunities appeal to students looking for part-time employment that fits around their class schedules. The same goes for caregivers, and retirees.
App-based workers are part of the so-called gig economy. The companies’ presence in the Fresno market is not inconsequential: Lyft has 4,300 drivers in Fresno. Drivers often work for both ride-hailing companies.
Adrian Durbin, senior director of communications for Lyft, told The Bee that nearly all of those drivers would lose their employment opportunities under AB 5. The firm would only use 200 drivers to cover the same territory now served by the 4,300.
That means longer wait times for customers looking for a ride. And some parts of Fresno County might not even have Lyft service.
Beyond such a bill is a $90 million drive by Lyft, Uber, and DoorDash (the meal delivery service) for a ballot initiative next year that, if passed, would allow them to keep using drivers as contractors.
Gov. Newsom has said he would be willing to consider making exceptions for app-based drivers used by the firms. But he is also supportive of efforts to stop misclassification of workers.
The responsibility to get this right falls on both sides of this debate: Lawmakers should not squash the burgeoning gig economy by limiting employment opportunities, especially in places like the Valley where jobs are sorely needed. Gonzalez and her colleagues must be willing to consider a new plan that allows Lyft and Uber to maintain the services Californians have grown accustomed to using and which benefits that majority of drivers.
Additionally, there are traditional industries in the state that utilize independent contractors to provide a service or deliver goods. In most of those cases, the workers choose the jobs because the work fits their individual schedules, and are satisfied with the compensation. Some of those industries have asked for “carve outs” from Gonzalez’s bill — health care providers, barber shops, tax preparers, pet care services. Newspapers like this one should get an exemption for adult carriers.
At the same time, companies need to recognize their ethical, and likely soon to be legal, responsibility to pay fair wages and benefits to people doing critical work. It was the abuse of workers by the package delivery company that brought this to a head. For Lyft and Uber to propose a new wage and benefit model for their industry is both right and good business.