AB 5 senate vote California: Bill passes appropriations committee

Silicon Valley can’t seem to escape California’s crackdown on the gig economy.Uber drivers in California are one step closer to becoming Uber employees.On Friday, state senators on the appropriations committee voted for AB 5 — a controversial bill that would require companies to classify workers as employees, not independent contractors (with few exceptions). The added cost is why gig companies are so furious.On Thursday, Uber, Lyft, and DoorDash warned that they would each spend $30 million on ballot initiative to overturn AB 5 if it ultimately passes.“We’re confident that California voters support a solution that pairs worker flexibility with economic security,” wrote Max Rettig, head of public policy for DoorDash, in a statement shared with Vox.California labor unions, which support AB 5, immediately shot back.“We will meet the gig companies’ absurd political spending with a vigorous worker-led campaign to defeat this measure to ensure working people have the basic job protections and the right to organize a union they deserve under the law,” Art Pulaski, treasury secretary of the California Labor Federation, wrote in a statement to Vox.The fight between labor unions and Uber — one of Silicon Valley’s most cherished investments — is perhaps the most consequential legislative battle taking place in the country. In recent weeks, Uber and Lyft have been emailing drivers and passengers in California, begging them to contact their lawmakers to urge them to compromise.“Help protect rideshare in California,” read one message sent to Lyft customers this week.So far, there’s no deal on the horizon.When Uber drivers went on strike across the world in May, much of their frustration had to do with their lack of power as independent contractors.Uber’s profit model, like that of other companies in the gig economy, depends on all the money saved from skirting US labor laws. we would incur significant additional expenses for compensating Drivers, potentially including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes, and penalties.So it’s unsurprising that Uber is not happy about a law that would force the company to hire drivers as employees.As employees, gig workers would have a safety net for the first time ever.