California Governor Gavin Newsom signed legislation Wednesday which could slam the brakes on the so-called “gig economy” by requiring rideshare firms to treat contract drivers as employees, challenging the economic models of giants such as Uber and Lyft.
The legislation, which is being closely watched in other states, responds to critics who argue that rideshare firms shortchange contract drivers by denying them employee benefits.
The new law comes with growing numbers of workers relying on short-term “gigs” which offer greater flexibility but lack the benefits of regular employment.
The governor called the measure known as AB5 “landmark legislation for workers and our economy” and said it would reduce “worker misclassification” that denied benefits such as minimum wage, sick leave and health insurance.
“The hollowing out of our middle class has been 40 years in the making and the need to create lasting economic security for our workforce demands action. Assembly Bill 5 is an important step.”
The law challenges the business model of the rideshare platforms and others which depend on workers taking on “gigs” as independent contractors.
The measure was hailed as a watershed moment for labor activists seeking more rights for gig and freelance workers.
“Big thank you to all the gig workers, union members & activists who spent countless hours rallying to deliver this historic win,” the California Labor Federal said in a tweet.
State assemblywoman Lorena Gonzalez, author of AB5, lauded its signing as a “massive win” for workers.
“I’m proud to have had a small part in redefining labor law in this state and starting a path to reducing income inequality and rebuilding the middle class.”
But the state’s Republican Caucus fired off a tweet contending that Newsom signed “California’s largest anti-free market legislation” and that it could effect some two million jobs.
– Referendum sought –
Uber and Lyft, whose business models may be jeopardized by the law, said they would press on for a referendum that would overturn the measure, asking voters to approve a new system for independent workers with benefits.
The rideshare rivals said they have set aside $30 million each to support a ballot initiative next year.
“We’ve been proudly advocating for a new progressive framework that would for the first time give minimum earnings guarantees, access to benefits, and a right to organize to independent workers,” an Uber spokesman said.
“We believe California is missing a real opportunity to lead the nation by improving the quality, security and dignity of independent work.”
The two firms are seeking a new classification that considers workers independent while guaranteeing benefits and enabling collective bargaining.
Lyft policy communications director Adrian Durbin said the firms would seek a referendum if there is no negotiated deal with the governor.
“We are confident that with his leadership we can reach a historic agreement, but if necessary we are prepared to take this issue to the voters to preserve the freedom and access drivers and passengers want,” Durbin said.
Uber has said it has no plans to immediately reclassify drivers as employees in January, when the law takes effect.
The law “does not provide drivers benefits; give them the right to organize, or classify them as employees,” Uber chief legal officer Tony West said on a call last week with reporters.
‘They deserve it’: Republican strategist tells GOP it’s their own fault for going down with Trump because ‘they know better’
Republican strategist Susan del Percio said that there is no excuse for GOP members who failed to do the right thing and fight back against President Donald Trump when they had the opportunity.
Speaking to MSNBC's Joy Reid Thursday, del Percio called Trump "the anchor" around the GOP's necks, "dragging them down."
"But, you know what, they deserve it," she continued. "There are Republicans out there that deserve this because they know better. They should have been better on impeachment. They should have been holding him accountable all along. Now they are scared and worried about themselves. Well, boohoo, you brought it on. there's no excuse."
‘The monarch has taken a body blow’: Ex-prosecutor explains why Court ruling is devastating for Trump
On MSNBC Thursday, former federal prosecutor John Flannery broke down the implications of the Supreme Court's ruling against President Donald Trump on immunity from subpoenas.
"I think what it says is that the monarch has taken a body blow as a result of what will be an historic decision, as we've indicated," said Flannery. "I think that the position of the DA in New York is very special, because he can speed this up in a way that the House can',t and has a specific strength, I think, in this case, that it is criminal."
"The most significant thing about it is this is the first Supreme Court case in which there's ever been agreed that a prosecutor could subpoena a president," added Flannery. "Prior prosecutions have been federal, that have been treated by the Supreme Court. So this is a big difference. The majority of the court, 7-2, basically said, from 1740 on, the public is entitled to the testimony, to the evidence of any person. They said that the documents — the question is the character documents, not the character of the person. In this case, what we have is a situation which I bet that the DA is going to go to the court as soon as possible, move to compel an appearance to their subpoena, and going to have the discussion as to what if anything may be limited or excluded and get production as quickly as possible."
Trump officials demanded the Army ‘dig for misconduct’ to justify firing Lt. Col. Vindman
This week, Lt. Col. Alexander Vindman willingly left the Army after decades of honorable service. He cited a concerted campaign of "bullying" from the highest branches of power in the United States, and now more details are becoming known.
A New Yorker report revealed that top aides to President Donald Trump were told that they needed to find dirt on Vindman that could justify the firing of the decorated war hero.
"Vindman expected to go to the National War College this fall—a low-profile assignment—then take another foreign posting," the New Yorker reported. "But, in a final act of revenge, the White House recently made clear that Trump opposed Vindman’s promotion. Senior Administration officials told [Defense Secretary Mark] Esper and Ryan McCarthy, the Secretary of the Army, to dig for misconduct that would justify blocking Vindman’s promotion. They couldn’t find anything, multiple sources told me. Others in the military chain of command began to warn Vindman that he would never be deployable overseas again—despite his language skills and regional expertise."