Today, Uber, Postmates, and Uber driver Lydia Olson and Postmates driver Miguel Perez filed a lawsuit contending the landmark law derived from AB - 5 is unconstitutional. That is "Olson v. State of California." Bloomberg provides more details.
Set to go into effect January 1, 2020, that law would classify many types of gig workers as employees. Former contract workers would then receive the rights, protections, and benefits that employees have. Those range from the right to join unions to medical insurance coverage.
Such a shift could play havoc with the business models of companies such as Uber. In addition, AB - 5 could be the prototype for a similar law at the federal level. In Vermont, Bernie Sanders introduced such a bill.
Here is a copy of the lawsuit. It was filed in U.S. District Court in the Central District of California.
A major claim is the arbitrary nature of the law. The exceptions, ranging from salespeople to commercial fishermen, don't have a solid rational. In addition, the plaintiffs indicate that the gig companies have been unfairly targeted and other industries given special treatment. Also, worker flexibility is being reduced.
There is push-back from other kinds of players.
Trucking claims it can't hire as contract workers those whose routes will take them across the border into CA.
Editorial freelancers are already losing out of assignments. That's because they are being restricted to a limited number of articles for any one publication. Most media outlets can't function that way. Once content creators have proven themselves with a particular media outlet it's expected they will be contributing as many articles as needed. When that expectation is no longer possible the freelance writer is knocked out of that box.
In addition to lawsuits, those opposing the new law are considering bringing the matter to voters in the next election.
But one wonders if the train has left the station and isn't going to circle back. The gig economy may not survive. The person on the bicycle delivering a meal to your door may no longer be a contract worker. He or she will be employees. That classification could boost consumer prices.
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