Sep 11, 2019

Lyft exec: California bill would radically change ride-hailing

Photo: Justin Sullivan/Getty Images

Uber, Lyft and others are fighting hard against a California bill that would force them to classify drivers as full employees.

What they're saying: In Lyft's case, if the bill becomes law as is, the company would have to shift to a smaller pool of full-time drivers, Lyft president John Zimmer said on Tuesday at the Deutsche Bank Technology Conference in Las Vegas.

  • "You would manage a smaller population of drivers, so you would have less on-boarding costs, less background [check] costs, and you would be able to have more control over the hours and duration that someone works for you," Zimmer said.
  • He emphasized that 91% of Lyft drivers drive less than 20 hours per week for the company, which means the company would "only get a certain type of workers" who would fit this more strictly defined job.

Between the lines: In short, Lyft is telling advocates for the bill: Be careful what you wish for — the result may work out for some drivers, but it won't end well for others. Uber, Lyft, and other gig-economy companies have long responded to criticism by arguing that their workers say "flexibility" is the most important attribute of the job.

Yes, but: Zimmer said this scenario is the least likely one. Instead, he believes it's more likely that either Lyft and its peers will strike a deal with California's government over the next several months, or they will prevail in a state ballot measure challenging the bill.

What's next: The California State Assembly has already approved the bill, AB5, and the Senate is expected to hold a final vote by the end of this week. If it passes, it will head to the governor's desk.

Go deeper: A California bill could upend the gig economy

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Uber remains confident in face of California gig worker bill

Photo: Justin Sullivan/Getty Images

Uber is confident that a California bill codifying stricter requirements for classifying workers as independent contractors, which is on its way to become law, won't force the firm to reclassify its drivers in the state.

What they're saying: One part of California's new legal test defining contract employment looks at whether a worker's work is "outside the company's usual course of business." Uber general counsel Tony West told reporters Wednesday that Uber believes its main business is building a technology marketplace, not transporting passengers, a familiar refrain from ride-hailing companies over the years.

Go deeperArrowSep 11, 2019

California gig workers bill clears major step

Photo: Lane Turner/The Boston Globe via Getty Images

The California state Senate passed a bill late Tuesday imposing more stringent requirements for companies to classify workers as independent contractors.

Why it matters: Gig economy companies including Uber, Lyft, DoorDash, and Postmates are fiercely opposing bill AB5 as it would force them to convert their drivers into employees with benefits and other protections. The bill will go back to the state Assembly to reconcile it with that chamber's version before the end of this week. If approved, it will head to the desk of Gov. Gavin Newsom (D), who endorsed the bill this month.

Keep ReadingArrowSep 11, 2019

California plays by its own rules

Illustration: Sarah Grillo/Axios

California's embrace of new rules covering gig-economy employers like Uber and Lyft is only the latest example of the state's willingness to regulate business faster and farther than the federal government.

Why it matters: California is the most populous and richest state and home to 3 of the 5 biggest U.S. tech companies, so its laws often become models for other states' rules — and even de facto national standards.

Go deeperArrowSep 12, 2019