On Tuesday the California State Senate voted to pass a bill that might make it much more troublesome for corporations like Uber Technologies and Lyft to classify employees as independent contractors reasonably than employees.
The bill, known as AB5, has garnered nationwide consideration, mainly owing to the size of California’s workforce. Several Democratic presidential candidates have backed the proposal, including U.S. Senator Elizabeth Warren, Massachusetts, Bernie Sanders, Vermont and Kamala Harris, California.
It has also come underneath sharp criticism by trade groups and so-called “gig economy” companies that rely strictly on contractors.
“We are fully ready to take this concern to the voters of California to protect the freedom and entry drivers and riders need and want,” Lyft said in a statement.
Uber did not instantly reply to this situation – after U.S. market hours. Gig economy firms, whose enterprise models are dependent on the use of contractors, have been among the many most vocal critics of AB5.
Last week, Uber and Lyft proposed a poll referendum that could be introduced to California voters next year and would exempt drivers for journey-hailing services from the scope of the bill.
Uber, Lyft and supply agency DoorDash, which has additionally made freelance drivers the spine of its enterprise, earmarked $90 million for a voluntary November 2020 poll initiative that would exempt them from the law.
San Francisco–primarily based DoorDash, expressing its disappointment on the vote, stated it was committed to a new law that will assure advantages and protections, together with a minimum wage, for its supply drivers.
AB5 – which was sponsored by California Assemblywoman Lorena Gonzalez and is sponsored by Gavin Newsom, California Governor, passed the state senate with 29 votes in favor and 11 votes against it.