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Home / US / California has just passed a bill making employees of gig economy employees. Here's what Uber and Lyft said.

California has just passed a bill making employees of gig economy employees. Here's what Uber and Lyft said.



  Dara Khosrowshahi Carlo Allegri / Reuters

  • The California legislature has passed legislation requiring companies such as Uber, Lyft, DoorDash, and other "Gig Economy" companies to treat workers instead of contractors.
  • Uber and Lyft Suppose that the decision merely qualifies applicable law, harms workers by removing flexibility and encouraging customers to pay more.
  • Watch the trade with Uber and Lyft live.

Californian lawmakers passed legislation requiring Uber, Lyft, DoorDash, and other "gig economy" companies to treat workers as employees rather than contractors. Uber and Lyft previously downplayed the decision as a qualification of existing law, arguing that it harms workers by reducing flexibility and causing customers to pay more.

The Senators of the State passed bill 5 on Tuesday in a vote of 29 to 1

1. The proposed law is expected to pass the State Assembly, receive the green light from Governor Gavin Newsom and come into force on January 1. It would change the rights of at least 1 million workers, including hundreds of thousands of Uber and Lyft drivers in California. According to the New York Times.

The bill could set a precedent for other states: Working groups in New York are pushing for similar protection after securing a minimum wage for hail-damaged drivers last year, and Washington and Washington Oregon failed received, the New York Times said.

The strike against Uber and Lyft's business models follows disappointing public debuts for both companies this year. Uber's stock has fallen by about a quarter since going public, while Lyft's stock has fallen 37%.

Uber and Lyft have recently said this about the bill:

1. It is a specification of state law.

"If AB5 succeeds, it is simply a qualification of existing law," said Uber CEO Dara Khosrowshahi in August on the company's second-quarter earnings announcement. "It does not turn drivers into employees right away, it just changes the way they look in court."

"AB5 is the result of a decision by the California Supreme Court called Dynamex," said Lyste CFO Brian Roberts at a Citi conference last week. "It basically codifies parts of that judgment, there is no magic change."

2. It damages their drivers if they reduce their flexibility.

Turning all drivers into white collar workers "is not the best for the company, because changing all the way to the employees gives you only one type of worker, and in our case, 91% of our drivers drive less than 20% Hours, 76% of our drivers drive less than 10 hours, "said Lyft co-founder and President John Zimmer this week at a conference of Deutsche Bank. Emagazine.credit-suisse.com/app/art…1007 & lang = DE They do so on the basis of extra income and do not want to work shifts, "Zimmer added Day and the size of the workforce, considering how fast we grow.

Uber expressed similar feelings.

"We believe there is a better way," Khosrowshahi said at the group's recent earnings conference. "The fact is, our drivers keep telling us that the reason why they appreciate Uber is that they value their freedom. You are her own boss. They run their own business. You can drive for us or not, whenever you want. "As you wish."

"We believe that there is a better way that will allow drivers to maintain their independent status, but add the counter-protection that we believe is good protection," he added. "We believe that there is a win-win situation there."

. 3 Your customers will accept the higher costs.

Transforming contractors into employees could increase the cost of gig-economy businesses by 20% to 30%, citing industry representatives.

Uber and Lyft have warned that they will do so. Www.socialistgroup.eu/gpes/newsdeta…ome&site=msp The newspaper said that drivers had to be scheduled in advance in order to be in slow phases or on quieter markets no driver to pay. Englisch: www.germnews.de/archive/gn/1996/03/27.html. The result could be fewer jobs for the restraining workers.

Consumers could end up paying too.

"Whatever your operating costs may be," says Roberts. "After all, it's a passage, and I think investors need to understand that."

. 4 This could save them money and give them more control over the drivers.

Lyft expects fewer drivers to be managed if California law is passed, which lowers the cost of introducing and equipping new drivers and conducting background checks, Zimmer said at the conference. The new rules would also tackle the problem of Lyft spending money on the transport of a new driver just to allow them to leave within months, he added. Employee drivers could not get off easily.

The group would also "gain more control over when and how long the drivers work," Zimmer said. It could instruct busy drivers to work in certain shifts at certain times, potentially improving customer availability.


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