Some Uber drivers in New York City want to see a decrease in the commission taken by the company. SAN FRANCISCO -- Gig economy workers are increasingly ubiquitous, shuttling us to appointments and delivering our food while working for Uber, Lyft, DoorDash and others. Thanks in large part to the app-based tech boom emanating from this city, 36% of U.S. workers participate in the gig economy, according to Gallup. But not all gigs are created equal, Gallup adds, noting that so-called "contingent gig workers" experience their workplace "like regular employees do, just without the benefits of a traditional job -- benefits, pay and security." California lawmakers are weighing what is considered a pro-worker bill that, if passed into law, would set a national precedent that fundamentally redefines the relationship between worker and boss by forcing corporations to pay up.
When Kristyn Hansen first took a job at Stews Barber Shop, she cut hair nine hours a day, three days a week. She earned no overtime pay, had no mandated breaks, and her Ladera Ranch bosses didn't cover Social Security taxes, unemployment or disability insurance. That's because Hansen, 32, was classified as an independent contractor. "I loved it," she recalls. The schedule allowed her to take five classes at a local college.
This week, California's governor, Gavin Newsom – a darling of tech capitalists – signed Assembly Bill 5 (AB5) into law. The bill codifies the "ABC test" to determine the applicability of California employment laws and makes it harder for companies to get away with misclassifying workers as independent contractors. If properly enforced, AB5 will have enormous impacts for vulnerable workers in the trucking, janitorial and construction industries. But across the world, the law has been most hailed as a regulatory check on the so-called "gig economy". Indeed, the International Transport Workers' Federation (a federation of 665 trade unions representing 18 million workers in 147 countries) has called on this California bill to be the inspiration for regulations governing gig work internationally.
Postmates, the food delivery platform, is part of a federal lawsuit challenging California's new law, AB5. Here a bag of food from McDonald's sits next to a Postmates bag during a delivery in New York on Wednesday, May 6, 2015. Postmates, the food delivery platform, is part of a federal lawsuit challenging California's new law, AB5. Here a bag of food from McDonald's sits next to a Postmates bag during a delivery in New York on Wednesday, May 6, 2015. A new law that went into effect in California Jan. 1 is supposed to make it harder for companies to hire workers as contractors -- but gig companies like Uber, Lyft and the food delivery platform, Postmates, are refusing to reclassify their fleet of drivers as employees.
California legislators are set to decide on legislation that would fundamentally change the way tech giants like Lyft and Uber engage with workers. Assembly Bill 5 would change the way businesses classify employees and dramatically expand protections for gig workers. If it passes, the legislation would represent a big win for labor advocates across the state. "This bill not only does important things immediately for workers, but also sets a framework for the future we think is really important," said Steve Smith of the California Labor Federation. AB5 passed California's state assembly 53-11 in May and has since moved to the state senate's appropriations committee for a vote on Friday.