| In September, California approved a bill with the power to reshape the state’s gig economy. Under the new law, companies are required to treat contract workers as employees if they contribute to the company’s core business, among other factors. That means providing them benefits like paid overtime and health insurance. |
| The new law threatened app-based companies that rely on independent labor, and the state sued Uber and Lyft in May for violating it. |
| “The perspective of the state is that gig work has become wildly popular, even though it does not have legal recognition in California,” said Kate Conger, who covers technology at The Times, “and the right thing to do is pull those jobs back into a traditional employment model.” |
| This month, a judge gave the ride-hailing companies until Thursday to comply; the companies appealed the ruling and said they may suspend their services in the state. Before the coronavirus pandemic, California accounted for 16 percent of Lyft’s total rides and 9 percent of Uber’s, The Wall Street Journal reports. The shutdown would be another hit to the businesses, which have seen a nosedive in rides since the virus hit. |
| The pandemic has also heightened the burden on independent contractors. “Drivers can’t take paid time off, don’t have health insurance, rides have plummeted, but they still have vehicle expenses, so they were left out on a ledge in this scenario,” Kate said. |
| While many drivers want to become employees, others who don’t drive full-time oppose the legislation, preferring the flexibility that comes with staying independent. |
| The companies have poured tens of millions of dollars into a November ballot measure that would exempt them from the law and provide minimum-wage standards and limited health benefits for drivers. They’ve also been exploring a franchise-like model, in which they would license their brands to operators of vehicle fleets in California. |
| The legal fight in California could influence the gig economy nationwide. Similar battles are taking place in Massachusetts and other states are monitoring the outcome closely, Kate said. |
| “Long term, I think we will see significant changes to gig work,” she said, “but it’s not clear to me who is going to win the tug-of-war.” *by Sanam Yar and Ian Prasad Philbrick via New York Times* |
