Farewell gig economy in California, we hardly knew ye

Earlier this week the California legislators approved AB5, a bill that requires companies like Uber and Lyft to treat contract workers—“gig” workers in the industry parlance-- as employees. The bill demands that workers be viewed as employees instead of contractors if a company exerts control over how they perform their tasks or if their work is part of a company’s regular business.

As Dan Walters at CalMatters puts it, "The gig economy's loss, however, could be organized labor's gain by potentially recasting several million workers as payroll employees and dthus making them eligible for union organization." 

California Globe reports that the bill’s passage could doom California’s Gig economy. The Gig economy includes ride-share businesses like Uber and Lyft, and food delivery services Postmates and DoorDash.

“A gig economy is a free market system in which freelance, temporary and flexible job positions are common and organizations contract with independent workers for short-term engagements. Last year, the Bureau of Labor Statistics reported that 55 million people in the U.S. are “gig workers,” which is more than 35 percent of the U.S. workforce. That number is projected to jump to 43 percent by 2020, Forbes reported.

The Service Employees International Union is pushing a separate ride-share driver bill to organize drivers, ignoring the April decision by the National Labor Relations Board and the US Department of Labor  determining that that Uber drivers are independent contractors.

“Business industry policy experts warn that the turmoil that will be created by this decision effects virtually every industry and its freelance, flexible and independent workforce in California from beauticians to real estate agents, from construction workers to Gig workers and everything in between.

“Many newspaper editorial boards have come out in opposition to AB 5 as newspaper delivery drivers would be impacted. The Sacramento Bee editorial board ‘warned, “The bill, as currently written, could force many California newspapers out of business. That’s because the bill would require newspapers to treat newspaper carriers as employees rather than independent contractors."