The proposed law would make it harder for ride hailing firms to classify workers as independent contractors.
Background: Ride-hailing services such as Uber have been under the regulator’s spotlight for some time. The disruption they have caused to traditional taxi services has brought lawmakers from around the world to examine several aspects of these firms’ business model, including the relationship they establish with drivers.
A new act in California is looming: As the law would force companies to classify drivers as full-time employees, the likes of Uber and Lyft are arguing that flexibility is key not only for their own business models, but also for drivers themselves, since they are attracted by the freedom they have to work whenever they want. Lyft has already signalled it could shift to a smaller pool of full-time drivers, in order to reduce costs. In June, the two companies published a joint op-ed in a local newspaper, asking for the bill to be dropped and offering a range of additional benefits.
What’s likely to happen: The bill has been passed by the State Assembly and by the Senate; it is only awaiting the Governor’s signature. The ride-hailing firms have signalled their intention to challenge it through a ballot measure, unless they manage to strike a deal with California’s government in the coming months.
