The bill, which has passed the State Senate and would go into effect on Jan. 1, 2020, still has to go through the State Assembly and get final approval from Governor Gavin Newsom. Uber, Lyft and DoorDash have pledged US$90 million to fight the bill with a ballot initiative. The proposed legislation says companies must treat workers as employees if their work is within the company’s usual course of business. On Wednesday, Uber said drivers are not part of its usual course of business, and that it will therefore not abide by the bill if it becomes law. (The Logic)
Talking point: This would be the first time a jurisdiction successfully forces app-based companies to broadly overhaul their employment models, and it will likely go through—the State Assembly has previously approved the bill, and Governor Newsom has vocally endorsed it. It would buck the trend for similar labour disputes involving app-based firms. Companies like Uber and Lyft have faced challenges on the employment status of their workers worldwide—including in Toronto, where Uber workers are trying to unionize—but those have largely ended in the companies’ favour. In the U.S., labour groups in states including New York, Washington State and Oregon have attempted to launch similar bills, but those efforts have failed to advance, thanks in part to lobbying efforts by ride-hailing companies. Uber and Lyft said forcing them to provide employment protections to workers would raise costs by 20 to 30 per cent and force them to schedule drivers in advance, reducing flexibility that they said is critical to their workforce.