Saturday, September 28, 2019

In which people discuss things I don't understand

Probably most people are aware that California AB 5 has passed and has been signed by Governor Newsom.

Now comes the extremely intelligent and insightful technology industry observer Ben Thompson with his thoughts on AB 5 and how it will affect Uber, Lyft, Doordash, Postmates, etc.: Neither, and New: Lessons from Uber and Vision Fund.

The critical part of AB 5 is the 3-part test for whether a worker is an independent contractor or not.

Here's what the law actually says:

2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Thompson's take is:

That is why the best solution to the employment classification question is to realize that neither of the old categorizations fit: Uber drivers are not employees, nor are they contractors; they are neither, and new. A much better law would define this category in a new way that provides the protections and revenue-collection apparatus that California deems necessary while still preserving the flexibility and market-driven scalability that make these consumer welfare-generating platforms possible.

That's a reasonable critique.

On the other hand, the law seems quite clear, and based on the law, it certainly seems like Uber drivers should be considered to be employees of Uber.

Vox has more.

I don't think this is over.

1 comment:

  1. What you said -- it's not over. A law like this will require many court cases to understand. I went to the website and searched on AB 5, and didn't get any hits, so I think the next step may be for the AG to issue implementing regulations?