Article from Reason by Billy Binion.

California is on the verge of passing a bill that would reclassify all “gig economy” workers—those who drive for Uber or Lyft, for example—as employees rather than contractors. Ride-sharing companies have responded by offering to pay drivers a minimum hourly wage of $21, but labor activists say the hike isn’t enough.

The measure, known as AB 5, passed the California State Assembly in May and is expected to pass the state Senate next week. It will then head to Gov. Gavin Newsom, who has put his full support behind the bill.

Such a move would require gig economy companies to provide a wide array of benefits—including paid time off, worker’s compensation, and reimbursement for expenses—to every employee, upending the flexible business model where drivers can choose their own hours, answer to themselves, and work for competing companies simultaneously. This would fly in the face of national practice: The Department of Labor and the National Labor Relations Board have ruled separately that gig economy workers are indeed contractors.

Uber and Lyft countered that they would provide a $21 minimum wage, which would apply both when driving a passenger and when en route to pick up a new one. Labor rights activists, including the ones behind AB 5, demurred at the offer. “The voters of California won’t stand for billionaires allowing their workers less rights than Walmart employees,” Assemblywoman Lorena Gonzalez (D–San Diego), who authored the bill, said in a statement.

Read the entire article at Reason.

Image Credit: By Henri Sivonen from Helsinki, Finland (flickr: California State Capitol) [CC BY 2.0 (], via Wikimedia Commons