The Bill That Would Make Uber And Lyft Drivers Employees Isn’t Just Making Uber And Lyft Nervous

Author:  Aaron Gordon It appears increasingly likely AB5, the California bill that would significantly narrow the definition of an independent contractor in the state and have potentially profound implications on the gig economy, will pass. Last weekend, Governor Gavin Newsom voiced his support of the bill, meaning he would likely sign it if approved by the legislature. Critics of the bill say it is too broad and will impact jobs and industries it is not intended to affect. Some, like Uber and Lyft, make this argument disingenuously because they are precisely the jobs and industries the bill is targeting. But others have more genuine concerns. Over the weekend, the Sacramento Bee made the case that newspaper delivery workers would be subject to AB5 stipulations, even though, by their estimation, delivery workers are clearly part-time independent contractors as long as they’re delivering newspapers because they always have been. Forcing the paper to either make them employees—which it contends it cannot afford to do—or cease delivering newspapers would be equally disastrous consequences: But in what seems like an unintended consequence of the bill, AB 5 would basically make daily delivery of the print version of the newspaper nearly impossible. Some papers have said they may turn to mail, meaning a day-late newspaper and increased subscription rates for consumers. That’s because the bill would require newspapers to treat newspaper carriers as employees rather than independent contractors. This would disrupt and destabilize the newspaper industry at a time when accurate, credible news is most needed – and most threatened. AB5 addresses real concerns in the gig economy run by billion dollar companies, the Sac Bee editorial board concludes, just not in our industry. Under AB5 as its currently written, workers are employees if “free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation or business.” A number of industries have already gotten themselves exempted from AB5, including but not limited to: licensed insurance agents, certain licensed health care professionals, securities brokers-dealers or investment advisers, direct sales salespersons, real estate licensees, commercial fishermen, barbers, and construction subcontractors. The Sac Bee editorial board acknowledges their industry too has been attempting to gain a carve out, but no such luck: The California Newspaper Publishers Association (CNPA) has been working to insert language that would exempt newspaper carriers and freelance writers from AB 5. So far, AB 5 appears to be moving forward without any certainty on these exemptions. First of all, as a former freelance reporter myself, I don’t think AB5 would apply to a typical freelancer unless they are a “permalancer,” or someone who gets nearly all of their income from one publication through a steady, consistent work arrangement but the publication refuses to hire them in order to avoid providing benefits. In other words, precisely the type of unfair arrangement AB5 is trying to remedy. It is certainly odd to hear a paper making the argument in 2019 that print delivery is vital to their existence, but the fact is many local papers are operating at such razor-thin margins, losing any subscribers or incurring any additional costs can be catastrophic. But, let’s be clear: making newspaper delivery workers employees would not rank in the most significant factors in the decline of local reporting. Among those would be: Google, Facebook, and Amazon hoovering up the vast majority of digital advertising revenue, vulture capital firms raiding healthy businesses to make a quick buck, and overconfident Professional People Managers are much more significant challenges to producing useful, marginally profitable news. If the problem trying to be solved here is making local news more sustainable, there are much, much bigger fish to fry than the employment status of print newspaper delivery workers. But the point here has nothing to do with the newspaper industry. It has to do with just how screwed up the American employment landscape has become. The sheer number of industries seeking exemptions from AB5 lest their businesses be destroyed can mean only one of two things: either they’re under-appreciating their own ability to adapt to changes in employment law, or the entire California economy is teetering on the brink of collapse due to a slippery definition of who is a worker or an independent contractor. And if it is the latter, the answer is not to go back to the drawing board on AB5 or accept the status quo, but ask why so many industries are apparently reliant on this arrangement. To be sure, AB5 is a big change and will take years to fully sort out. But that is proportionate to the harm it is trying to correct. Businesses have been permitted to abuse the independent contractor label for decades even as governments have passed more and more “benefits” like decent health insurance onto private businesses, which businesses then circumvent by making more workers independent contractors. It has left a chasm between what is legal and what is fair. That won’t be fixed overnight, and certainly not by one law. And newspaper delivery workers are the least of our problems.

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