California passes labour bill in latest blow to Uber and Lyft
The cost could be significant and comes at a delicate moment for the two largest companies in the gig economy
Palo Alto — The California senate passed a bill that could force Uber and other gig-economy giants to reclassify their workers as employees. Such a change would secure labour protections for thousands of people across the state and deal a significant blow to companies that built multibillion-dollar businesses on independent contractors.
Under the new law, Assembly Bill 5, people in California could generally be considered contractors only if the work they’re doing is outside the usual course of a company’s business. Companies such as Uber and Lyft, which rely on armies of drivers to service their customers, would likely fail that test without transforming how they do business. Employees are entitled to a minimum wage and overtime pay, neither of which is a common protection within the gig economy...
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