How AB5 affects Uber and Lyft
The destruction of the AB5 law has wreaked havoc on the gig economy, and many people have fallen victim to it from freelance writers to freelance photographers to musicians to drivers for Uber and Lyft. The devastation in its wake has left hundreds of thousands of people without a job in California. Their entire income gutted in a single night because of a selfish woman's passing of the bill known as AB5.
The Responsible: Lorena Gonzalez
Meet the California politician responsible for the passing of AB5. Lorena Gonzalez, a short-sighted Democrat representing the 80th assembly district passed this bill that forever negatively changed the landscape for Uber and Lyft drivers. Some believe she allegedly and corruptly passed this bill because of union funding, but most people want the option to participate in a union, rather than being forced into one. People have lost homes, and all we can do is call it Lorena's success story.
Fierce Political Battle Erupts
For those on the receiving end like Uber and Lyft drivers, the argument was that they should be classified as employees, rather than independent contractors. Uber and Lyft joined forces with DoorDash, and they have vowed to spend up to $90 million on passing a ballot initiative that will exempt their workers from this destructive bill.
How Does This Impact Drivers?
While the ferocious fight has begun to exempt drivers, this may not happen if ever where they will get excluded. It could take at least several months before it gets passed. While some Uber drivers support being unionized, you have others who don't want this. Some legal challenges could arise as a result of this bill getting passed. If this bill stays in place, for example, it could mean that hundreds of drivers will lose their jobs because of how Uber and Lyft can't afford to keep them on.
How Passengers will Suffer
Much of this comes down to speculation, but passengers will see it as less convenient for them to order through the app because of how the number of drivers will most likely plummet. As an employee, this could be beneficial to drivers in some ways if they can manage to keep their jobs, but not everyone will be able to keep their jobs because of the costs of keeping employees over keeping independent contractors.
In addition, some drivers would hate it because of how they will lose the flexibility to schedule their work as they see fit. As a passenger, Uber and Lyft will most likely raise the costs of the fares to deal with the higher costs.
Ignorant Bill Harms the US Economy
Perhaps in the world of daydreamers and the delusional, everything could be fair to everyone, but the reality is that those who work as independent contractors will most likely lose their job because of this bill. Not to mention, the enforcement of this law will be difficult for regulators because of how you have a range of obstacles. Without enforcement, they will still have a difficult time making this a reality.
Employees Cost More
Experts give an estimate of a 30 percent higher cost to workers who classify as employees over independent contractors, and that's why many businesses can't afford to keep them on. This means that Uber and Lyft could have to pay millions of dollars more every year. The cost-shaving measures could get accelerated if AB5 remains in place, and the company has already laid off 800 employees because of AB5. While raising the prices could help to offset some of the costs, it will also mean that fewer passengers will choose to ride with the app.
The Biggest Victims
Lorena Gonzalez has harmed thousands of people with the passing of AB5. The biggest victims don't come from the corporations, but it comes from the people who previously had a job. If more drivers get laid off because of this law, it will mean that they have fewer rights because they couldn't be afforded to be kept on. Not to mention, the American dream has always been one where we have a right to choose our type of work. With the passage of AB5, many workers will lose their right to choose their hours, and they will have to work as employees under the new law.
With the passing of AB5, an era of cheap rides in the city may soon come to an end. Even people in other states have begun to pay attention to this frightening law because of how it guts your freedom to work as you wish, and it could even mean a potential loss of income. The consequences of this bill could be huge considering how the gig economy is worth approximately $455 billion in total. This bill will make it harder for businesses in general, which is why we have to fight this on a broad level for everyone who has been affected.