'Gaming the system' ? Uber and Lyft face a driver reckoning in California

SAN FRANCISCO — California’s lawmakers on Wednesday took their first major step toward settling the debate about whether Uber and Lyft drivers are employees or contractors.The state Assembly passed Assembly Bill 5, which would enshrine a 2018 California Supreme Court ruling that laid out a three-part “ABC” test to determine when a worker can be considered a contractor, factoring in the kind of work being done and the business of the hiring company.The 2018 case, first brought more than a decade ago by a driver for a parcel and document delivery company, was initially celebrated by labor activists, who believed it would establish the precedent necessary for drivers and many other contract workers to receive the benefits and protections legally afforded to employees in California.But in the more than a year since the ruling, known as Dynamex, few major gig-economy companies have converted their workforce from contractors to employees.“They’re just gaming the system,” said Assemblymember Lorena Gonzalez, a Democrat who wrote the bill, which will now need to pass the state Senate and gain approval from the governor to become law.For Uber and Lyft drivers, among others, the law would mean a bevy of legal rights and protections, including better pay, benefits and the ability to unionize. Perea added that neither Uber nor Lyft had communicated any information about the Dynamex ruling to drivers.Gov. Gavin Newsom, a Democrat, addressed the case directly in his first State of the State address in February, calling for a “new modern compact for California’s changing workforce.”“This is much bigger than Dynamex,” he added.Newsom has not taken a public position on the Assembly bill, with his office saying he will evaluate the bill “on its own merits.”Veena Dubal, a labor law professor at the University of California at Hastings, said that the bill’s passage is not guaranteed.“The truth is that it upends this tech model that venture capitalists have poured so much money into,” she said.