Skip to content
CapRadio

CapRadio

signal status listen live donate
listen live donate signal status
listen live donate signal status
  • News
    • topics
    • State Government
    • Environment
    • Health Care
    • Race and Equity
    • Business
    • Arts and Lifestyle
    • Food and Sustainability
    • PolitiFact California
  • Music
    • genres
    • Classical
    • Jazz
    • Eclectic
    • Daily Playlist
  • Programs + Podcasts
    • news
    • Morning Edition
    • All Things Considered
    • Marketplace
    • Insight With Vicki Gonzalez
    • music
    • Acid Jazz
    • At the Opera
    • Classical Music
    • Connections
    • Excellence in Jazz
    • Hey, Listen!
    • K-ZAP on CapRadio
    • Mick Martin's Blues Party
    • Programs A-Z
    • Podcast Directory
  • Schedules
    • News
    • Music
    • ClassicalStream
    • JazzStream
    • Weekly Schedule
    • Daily Playlist
  • Community
    • Events Calendar
    • CapRadio Garden
    • CapRadio Reads
    • Ticket Giveaways
  • Support
    • Evergreen Gift
    • One-Time Gift
    • Corporate Support
    • Vehicle Donation
    • Stock Gift
    • Legacy Gift
    • Endowment Gift
    • Benefits
    • Member FAQ
    • e‑Newsletter
    • Drawing Winners
    • Thank You Gifts
  • About Us
  • Contact Us
  • Close Menu

California Dream

 

A statewide collaboration between Capital Public Radio, KQED, KPCC, KPBS and CALmatters focused on key issues of economic opportunity, quality of life and the future of the “California Dream.”

Series and Project Archive

 We Get Support From:
Become a Supporter 
 We Get Support From:
Become a Supporter 
  • State Government
  •  

A Bill To Fix Or Foul California’s Gig Economy

  •  Randol White 
Thursday, September 5, 2019 | Sacramento, CA
Listen
/
Update RequiredTo play audio, update browser or Flash plugin.
Randol White / Capital Public Radio

Uber Driver Jeff Perry waits in the Sacramento International Airport cell phone lot for a passenger request.

Randol White / Capital Public Radio

California law could soon redefine a large swath of independent contractors as employees, upending the business models used by the state’s gig economy companies—including Uber and Lyft.

Drivers for ride-hailing companies are connected to their customers through an app, allowing users to request on-demand rides and drivers to accept those requests whenever and wherever they want.

Since their inception, the drivers have been considered independent contractors, meaning they get paid for each “gig” they accept, but are not covered by any of the other benefits those classified as employees are required to get under current state law. These include sick time, medical coverage, and overtime.

The state Senate is expected to pass Assembly Bill 5 next week after it was approved by the Assembly in May, changing the status of these workers to employees of the companies that hired them. 

Lobbying interests from all sides have descended upon Sacramento as negotiations over the final bill continue. Gov. Gavin Newsom has indicated he will sign AB5 into law.

The rideshare companies maintain the majority of their workers have full-time jobs elsewhere that provide these benefits, and prefer the flexibility for making an extra buck.

Jeff Perry, a driver in Sacramento, disagrees. He says the companies are painting an inaccurate picture regarding the number of drivers who don’t need or want benefits.

“Like, I don’t deserve a fair wage because another guy pays me a fair wage and then in my time off [Uber or Lyft] should be able to cheat me or something,” Perry said. “I don’t understand that.”

A recent Uber gig Perry accepted at Sacramento International Airport took more than two hours and only earned him $12.14 from the company. That’s because a lot of Perry’s time was eaten up waiting to be hailed by a passenger in the first place. He also says the amount he used to make per trip has dropped by more than 50 percent since as Uber has altered its formulas for paying drivers. 

“I can’t just sign on for an hour and go make money,” Perry said. “This is not possible. Any driver who’s been doing this for a while, knows that.”

Perry is hoping AB5 will help change his situation.

The legislation is fallout from a recent California Supreme Court decision that sided with independent contractors who worked at a courier company called Dynamex. It said, based on a three-part, ABC test, the workers should have been considered employees of Dynamex.

Los Angeles attorney Timothy Kim contends that of the three parts created by the Dynamex decision, the ‘B’ test is the big one.

Kim works for Shepherd and Mullin, a firm that represents gig economy companies. He explained that the ‘B’ test requires the person’s work to be outside the normal business activities of the hiring company. 

For example, if a pizzeria hires somebody to clean the windows, that person is performing work outside the company’s “usual course of business” and can be an independent contractor.  But, if a pizzeria hires someone to make pizzas, that argument is much harder to make, because a pizzeria’s primary business is to make and sell pizzas, according to Kim. 

Businesses throughout California, not just the gig economy players, will be affected in some way by this test.

“Almost every large company uses independent contractors to some extent,” Kim said.

Los Angeles Attorney Timothy Kim at a moot court competition at Columbia Law School in 2016. Kim represents gig economy companies and says AB-5, should it become law, would have far-reaching effects.Courtesy / Timothy Kim

 

Assemblywoman Lorena Gonzalez is AB5’s author. She hopes, by baking the Dynamex decision into state law, her bill will level the playing field.

“A lot of people are getting rich and it’s not the workers, and it’s at the cost of the taxpayers,” Gonzalez said during a recent committee hearing for AB5. 

While AB5 is far reaching, it also limits who will be affected by carving out professions that can remain as independent contractors, including emergency room doctors, realtors, and insurance brokers.

Other exemptions are still being negotiated, but it’s unlikely the gig companies will be among them. Instead, Uber, Lyft, and DoorDash are lobbying for a new category of worker that falls between contractor and employee, possibly bringing that issue to voters at the ballot box.

“We remain focused on reaching a deal, and are confident about bringing this issue to the voters if necessary,” said Adrian Durbin, a spokesperson for Lyft. 

If a compromise is reached in Sacramento, it would likely not be within AB5, but would be part of a separate bill. Should that attempt fail, the three companies are committing $30 million each to fund the potential ballot proposal.

“All eyes are on California right now to see how this shakes itself out,” said Jarrett Dieterle with the R Street Institute, a Libertarian think tank based in Washington, D.C.

He believes a compromise to include this new worker category, could set California apart as a nationwide model.  But as currently written, Dieterle said AB5 could cost the business sector as much as $6 billion annually.

“So, if a broad swath of California’s workforce was moved over to become employees instead of contractors, it’d have a lot of costs,” Dieterle said, based on a calculation that independent contractors cost businesses just 60 cents on the dollar compared to employees.

Correction: A previous version of this web story and our broadcast story misstated what employment benefits would be impacted by this bill. The web story has been corrected, and the audio story has been removed until we can correct it.

The California Dream series is a statewide media collaboration of CALmatters, KPBS, KPCC, KQED and Capital Public Radio with support from the Corporation for Public Broadcasting and the James Irvine Foundation


Follow us for more stories like this

CapRadio provides a trusted source of news because of you.  As a nonprofit organization, donations from people like you sustain the journalism that allows us to discover stories that are important to our audience. If you believe in what we do and support our mission, please donate today.

Donate Today  

    Related Stories

  • Rich Pedroncelli / AP Photo

    Companies Like Uber, Facebook Say They Won't Need To Adjust To New California Laws

    Tuesday, December 24, 2019
    As California seeks to crack down on worker misclassification, predatory lending and consumer data privacy, some companies are fighting back — by flat-out refusing to comply with new laws that they say don’t apply to them.
  • AP Photo/Rich Pedroncelli

    Who’s In, Who’s Out Of AB 5?

    Thursday, September 12, 2019
    California’s pushback against the gig economy intensifies pressure on Silicon Valley flagships such as Lyft and Uber.
  • Richard Vogel / AP Images

    California Senate Moves 'Dynamex' Worker Classification Bill Forward Without Deal For Gig Companies

    Tuesday, September 10, 2019
    Companies such as Uber and Lyft have been seeking a way to keep their workers classified as contractors instead of employees. But legislation to address worker misclassification moved forward Tuesday night without exemptions covering them.

 CADream

Randol White

All Things Considered Anchor/Reporter

Randol White is an award-winning, accomplished, and well-rounded broadcast journalist with more than two decades of radio, television, web and print experience.  Read Full Bio 

 @RandolWhite  Email Randol White

Coronavirus Newsletter

Get answers to your questions, the latest updates and easy access to the resources you need, delivered to your inbox.

 

Want to know what to expect? Here's a recent newsletter.

Thanks for subscribing!

We'll send you weekly emails so you can stay informed about the coronavirus in California.

Browse all newsletters

More California Dream Stories

Sean Havey for California Dream

Life After Driving: How California Seniors Are Rethinking Getting Around

April 24, 2019

Andrew Nixon / Capital Public Radio

Dream Big, Live Small: Why The Van Life Is Taking Hold In California

June 29, 2019

Andrew Nixon / Capital Public Radio

Amador County Builds Community College Pipeline For Mental Health Workers

October 21, 2019

View All California Dream Stories  

Most Viewed

Top California Democrats in a stalemate over gas rebates

Downtown Sacramento shooting: What we know and latest updates

U.S. Sen. Alex Padilla will appear on California’s June primary ballot twice. Here’s why.

With California budget surplus projected at $97 billion, Newsom proposes driver rebates, more reproductive health funding

California coronavirus updates: Biden announces a third round of free at-home COVID-19 testing kits

We Get Support From:
Become a Supporter

Most Viewed

Top California Democrats in a stalemate over gas rebates

Downtown Sacramento shooting: What we know and latest updates

U.S. Sen. Alex Padilla will appear on California’s June primary ballot twice. Here’s why.

With California budget surplus projected at $97 billion, Newsom proposes driver rebates, more reproductive health funding

California coronavirus updates: Biden announces a third round of free at-home COVID-19 testing kits

Back to Top

  • CapRadio

    7055 Folsom Boulevard
    Sacramento, CA 95826-2625

    • (916) 278-8900
    • Toll-free (877) 480-5900
    • Email Us
    • Submit a News Tip
  • Contact Us

  • About Us

    • Contact Us / Feedback
    • Coverage
    • Directions
    • Careers & Internships
    • Mission / Vision / Core Values
    • Press
    • Staff Directory
    • Board of Directors
  • Listening Options

    • Mobile App
    • On Air Schedules
    • Smart Speakers
    • Playlist
    • Podcasts
    • RSS
  • Connect With Us

    •  Facebook
    •  Twitter
    •  Instagram
    •  YouTube
  • Donate

  • Listen

  • Newsletters

CapRadio stations are licensed to California State University, Sacramento. © 2022, Capital Public Radio. All Rights Reserved. Privacy Policy | Website Feedback FCC Public Files: KXJZ KKTO KUOP KQNC KXPR KXSR KXJS. For assistance accessing our public files, please call 916-278-8900 or email us.