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A Bill To Fix Or Foul California’s Gig Economy

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Independent contractors could become employees of companies such as Uber, Lyft and Doordash, changing their ability to earn a living and the businesses they work for forever.

Show transcript

Speaker 1: 00:00 Uber, Lyft, doordash, airbnb. They're among the biggest names in the gig economy and all California originals. These on demand services depend on people who are willing to work a Gig, be it host driver or courier, but it turns out that business backbone runs contrary to state law as part of our California dream collaboration capital public radio's Randall white explains the industry disruption that may lie ahead

Speaker 2: 00:31 about a mile from the terminals at Sacramento International Airport is a waiting zone. It's the cell phone lot. We're dozens of Uber and Lyft drivers wait their turn to get a passenger request. I am one to five which means I've seen in about 15 minutes I'll be getting a ride. Sandy minor is 45 minutes into her weight, checking the incoming flight list against her position in the queue a bit more time and her right is there two cars over as Jeff Perry. He's a half hour in and still has about 50 drivers in front of him. Sometimes it's quick. Sometimes we're right now this happens to be a busy time of night, right? A lot of flights are coming in between eight and 10. Both Perry and minor work as independent contractors for both rideshare companies. This means they can work wherever and whenever they want, but it also means they don't receive any of the benefits like vacation time, overtime and medical coverage that state law mandates for a worker who is considered an employee.

Speaker 2: 01:31 The ride share companies maintain the majority of their workers have full time jobs elsewhere where they get their benefits and prefer the flexibility for making an extra buck, but Perry sees it differently like I don't deserve a fair wage because another guy pays me a fair wage and then in my time off you should be able to cheat me or something. I don't understand that. A recent California Supreme Court decision called dynamics sides with Perry saying these drivers are employees based on a three part a, B, c test with be being the big one. That's exactly right. I mean the B is the one that's giving everyone consternation. Los Angeles Attorney Timothy Kim works for a firm that represents gig economy companies. He says the be test requires the person's work to be outside the normal business activities of the hiring company. For example, if a pizza shop hires somebody to clean the windows, that person could be an independent contractor, but if it hire someone to make pizzas, that person would have to be an employee.

Speaker 2: 02:32 Businesses throughout California, not just the GIG economy. Players will be affected in some way by this test because almost every large company uses independent contractors to some extent and now assembly bill five a bill sponsored by Assemblywoman Lorena Gonzales hopes to take that test and bake it into California law. She says this will level the playing field. A lot of people are getting rich and it's not the workers and it's at the cost of the taxpayers. Ab five limits who will be effected by carving out professions that can remain as independent contractors including emergency room doctors, realtors and insurance brokers. Other exemptions are still being decided but it's unlikely the gig companies will be among them. Instead, Uber, Lyft and door dash are lobbying for a new category of worker that falls between contractor and employee, possibly bringing that issue to voters at the ballot box. All eyes are on California right now to see how this shakes itself out.

Speaker 2: 03:31 Jared [inaudible] works for a libertarian think tank in Washington d c he says, a compromise to include this new worker category could set California apart as a nationwide model, but as currently written, d release says ab five could cost the business sector as much as $6 billion annually. And so if a broad swath of California's workforce was moved over to become employees instead of contractors, I would have a lot of costs back to Jeff Perry, the Uber driver at Sacramento International. About two and a half hours after first arriving at the lot. He's dropping off his passenger and got word from the company about his earnings for the ride. $12 14 cents.

Speaker 3: 04:13 I can't just sign on for an hour and go make money. This is not possible. Any driver who's been doing this for a while knows that

Speaker 2: 04:23 lobbying interests from all sides have descended upon Sacramento is ab five makes its way from committees to votes by the full senate Randall white cap radio news.

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KPBS Midday Edition Segments

Maureen Cavanaugh and Jade Hindmon host KPBS Midday Edition, a daily radio news magazine keeping San Diego in the know on everything from politics to the arts.