Companies mount campaign to maintain freelance workforce
Uber, Lyft and DoorDash are plowing ahead with a combined effort to exempt their companies from California’s Assembly Bill 5, a bill passed in 2019 meant to provide stricter guidelines for companies who rely on freelance employees.
The California AppBased Drivers Regulations Initiative would prevent drivers in Lodi and the rest of the state from being classified as employees, as well as introduce several changes to guaranteed wages and other labor policies. The initiative may be on the ballot in November.
AB5 was introduced by California Assemblywoman Lorena Gonzalez, after the Supreme Court of California ruled in “Dynamex Operations West Inc. v. Superior Court of Los Angeles” that stricter rules were needed for classifying who is and isn’t an employee.
The former standard, known as the Borello test, consisted of 11 points. According to Gonzalez, an exhausting proportion of employees’ rights cases made their way to the Supreme Court of California, creating a need for a new standard.
With the passing of AB5 came an “ABC test,” made of three points meant to differentiate a freelance worker from an unacknowledged company employee.
The standards are easier to parse and significantly stricter, and would guarantee a minimum wage and other workers’ rights to many currently working as independent contractors. Gonzalez said that the bill’s focus on gig workers has been overemphasized, that it is a broad bill meant to protect many workers being taken advantage of.
Since the passing of AB5, app-services including Uber, Lyft and DoorDash have refused to recognize the law and are now launching a campaign in the hope that they’ll never have to. Gonzalez said this was anticipated.
“Uber and Lyft and these companies haven’t complied with any laws or regulations put forward by local governments or state governments. We’re not the first to try to encourage them to treat people the right way,” Gonzalez said. “They had come into my office many times saying their business model didn’t work like this. And we would suggest that they should change their business model.”
However, Lodi City Council Member JoAnne Mounce, said that AB5 needs to be dialed back, and that the “ABC” test is too strict and captures too many independent workers — like truck drivers.
“Be very specific and say ‘Uber drivers’ or ‘Lyft drivers,’ but don’t just throw a big blanket out,” Mounce said.
Mounce said that she had no specific opinions regarding whether or not app-based drivers should be considered employees of their respective businesses, but that she has noticed a lack of understanding among Lyft and Uber drivers on how they are supposed to file taxes and that they could benefit from being classified as employees in order to clear that up.
“I take that form of transportation quite often. Most of them do not file tax returns, or even know what kind of taxes they receive,” Mounce said. “I’m not sure how many of them are reporting actively.”
Ride-share companies have committed $110 million toward the initiative, according to spokesperson Stacey Wells. She added that signatures have been collected and submitted, and that she is confident the prop will appear on ballots this year.
The initiative would make several concessions for Uber, Lyft and DoorDash workers; a guaranteed floor rate of 120% of the local minimum wage plus 30 cents a mile while actively working, a maximum working time of 12 hours a day, a scaled healthcare contribution based on hours worked per week and occupational accident insurance.
“If you’re driving like today and you pick up a passenger and you get sick with the coronavirus, you would be able to go on Worker’s Compensation and have your time off covered,” Wells said.
In order to receive compensation for any illness or accident, a driver would have to prove that they got sick on the job. This initiative does not offer sick pay.
The additional pay only applies to workers when they are actively driving — meaning drivers would not be paid for anytime in between passengers or deliveries.
“Drivers are very willing to switch that freedom and flexibility around and get paid while they have a customer in the car for the exchange of being free all the time,” Wells said. “They’re very good at maximizing their time. If they’re good drivers, they know where to drive to pick people up. They don’t have a lot of deadhead drive times.”
Gonzelez disagreed with Wells’ point and said that, in fact, California labor law does not require a set schedule for employees.
“Well, I think the companies have done a really good job of misinforming the people who work for them. They suggest it’s a binary choice,” Gonzalez said. “You can either be an independent contractor and have the ability to have a flexible schedule or you can be an employee and you have a rigid schedule. That’s simply not true.”
The initiative needed 623,212 signatures to get on the ballot. More signatures than that have been submitted, and, if verified, the initiative will be presented to California voters on Nov. 3.
This story is part of a collaborative project between the Lodi News-Sentinel and seniors in the journalism program at California State University, Sacramento. For more information about the program visit