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NewsTrucking Regulation

New ballot measure targeting California’s AB5 gains steam


A California measure that would allow app-based drivers to work independently while providing them with benefits has collected about one-third of the signatures needed to qualify for the November ballot, intensifying pressure against AB5, the controversial state law limiting the use of contract labor.

Funded by gig economy giants Uber (NYSE: UBER), Lyft ( NASDAQ: LYFT), and DoorDash, the Protect App-Based Drivers & Services Act focuses on drivers who work for rideshare or restaurant and grocery delivery services such as DoorDash and UberEats. It does not cover owner-operators in trucking, as that employment structure is “a completely different model” from app-based work, campaign spokesperson Stacey Wells explained to FreightWaves.

App-based delivery platforms “enable truly unique on-demand work, providing complete flexibility and control over when, where and how [drivers] work,” she said in an email.

The Act, which needs 623,212 signatures to qualify for California’s November ballot, would change employment classification rules so app-based drivers could continue to work as independent contractors — while providing them with earning guarantees and benefits.

So far more than 230,000 Californians have signed the petition in the first three weeks of the campaign.

Since the scope of the measure is limited to rideshare or delivery services provided by passenger vehicles, bikes, scooters, walking and public transportation, the California Trucking Association has not taken a position on the measure, Vice President of Government Affairs Chris Shimoda told FreightWaves.

Joe Rajkovacz, director of government affairs for the Western States Trucking Association, is also staying neutral.

That said, any effort “to water down AB5,” even by select industries, “just magnifies how wrong it was for the legislature to rush this through just to placate trial lawyers and unions,” Rajkovacz opined.

Backers of the Act expect to collect approximately 1 million signatures — exceeding the number of valid signatures required to qualify the measure for the November ballot.

The initiative joins a flurry of legal actions filed by diverse groups opposed to AB5. A federal judge has issued a preliminary injunction indefinitely halting the implementation of AB5 for trucking. Two freelance journalist groups have also filed a lawsuit, alleging that AB5 unconstitutionally restricts free speech and the media.

Labor, community and port trucking groups defend the new law, saying it prevents exploitation of misclassified workers.

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Linda Baker, Staff Writer

Linda Baker is a FreightWaves staff reporter based in Portland, Oregon. Her beat includes mobility, emissions regulations and autonomous trucking. Please send tips and story ideas to lbaker@freightwaves.com.

2 Comments

  1. Independent contractor misclassification :

    Laws need to be clearly established to prevent such an occurrence . In this manner we diminish the ambiguity gap and unethical competitive edge at the unfair expense of another .

    A contractor has the privilege to set their “rate” . They can set their rate as compensation for all their time and expenses etc. An employee doesn’t have that privilege aside from OTR drivers who are allocated a fixed daily amount for certain expenses for meals & showers .

    Employee misclassification creates an unfair competitive loophole . This loophole needs to be eliminated . An employee is considered to be controlled by an employer . A contractor is considered to be independent from an employers control , and is accorded certain tax privileges due to its integral business structure . An employee “depends” on an employer . We must assure that an employer acts with integrity in regards to the classification and treatment of its employee(s). This is not the case in general within the trucking industry .

    Employers aka businesses keep on finding creative ways to decrease their costs while increasing their profits at another’s expense . This should not be done unethically at an employee’s expense . Anyone can cheat . However, “cheating” is unethical .

    A business can find and or create ethical ways to diminish their costs and increase their profits . Therefore regulations should be established based on ethics . We all know the difference between what is right and what is wrong . We don’t need laws to tell us , just to remind us .

    However , laws should be established to draw the line between what is acceptable and what is not in an attempt to assure there is no ambiguity between the two . Finding a loophole and using it to take advantage of another is unethical . If you’re savvy , you don’t need to cheat another in order to obtain a gain . A law is not necessarily ethical just because it’s a law either .

    I’ve always stated since my arrival on this site that a lack of ethics is the major cause of the problems in this world and in this industry .

    Therefore , establishing a strong sustainable foundation can only be achieved upon ethics , not based on what we can or cannot do , but based on what we should do , the “right” thing to do . That’s the challenge . Find the right thing to do and render it prosperous and fair for everyone involved . We keep competing with one another unethically .

    That’s where I draw the line . If we allow ourselves to act unethically among one another , where’s the limit ? There is no limit !

    You will always attract resistance . Anyone can outsmart another unethically . We’ve been doing it since the beginning of time ! Where has this lead us ? At an extreme , people are still killing each other in retaliation due to unethical behavior , or worse to force another to submit to unethical desires . Like attracts like .

    We need to reorient our thinking . Why ? To evolve as a human species and because it’s the right thing to do . Frustration does not need to lead to unethical behavior . Nor does greed . We have the freedom of choice . We want to avoid fighting . We want to avoid pain . We want to gain pleasure and there are an abundance of ways to avoid pain while attaining pleasure ethically .

    That’s all it comes down to , ETHICS ! Apparently that’s what we all appear to be most challenged with .

    Being in business or politics is not a carte blanche which gives one the right to act unethically too gain an advantage . However, most appear to believe that it does . Those who do are greatly mistaking .

    With unity power is achieved based on volume and then used as leverage . Unity is power that can serve to prevent a fight , war , and hardship . Unity is not to be used to cause hardship or an unethical advantage , but as leverage for ethical progress .

    In my humble opinion ………

  2. Quote :
    February 4 2020

    New fines, inspections coming in ‘Driver Inc.’ fight

    OTTAWA, Ont. – Canada’s federal government will roll out a series of initiatives this year in the fight against Driver Inc. – a business model that involves mis-classifying employees as independent contractors.

    Legislative changes to come into force in 2020 will include fines and the naming of employers that don’t comply with obligations under the Canada Labour Code, an Employment and Social Development Canada spokesman told trucknews.com.

    “Targeted inspections will also be initiated with carriers who may be mis-classifying their employees,” he said. “The timelines for targeted inspections will allow the employers to consider proactively making the required changes in their organizations to ensure compliance with the Code and support the education and awareness campaign where companies are not aware of their obligations.”

    This spring, the federal Labour Program is also scheduled to launch an education and awareness program that focuses on road transportation companies.

    “This will include information sessions on both labor standards, and occupational health and safety. The goal is to increase awareness of carriers and drivers of the requirements of the Code,” the spokesman added.

    Limited enforcement

    Few additional enforcement initiatives have emerged since October 2018, when then Minister of Employment, Workforce Development and Labour Patty Hajdu publicly referenced the challenge of truck fleets that mis-classify employees as independent businesses.

    “In trucking in particular, we heard both from employer and employee groups that mis-classification was a real challenge and created a sense of instability and an unlevel playing field,” she said after an industry briefing.

    Online information resources have been unveiled to help clarify whether businesses are considered contractors or employees. Other communications material is being developed to raise awareness for couriers and drivers, to clarify their obligations and rights under the Code.

    The greatest sign of crackdowns on the business practice has come in the form of Ontario Workplace Safety and Insurance Board fines against selected carriers. The Ontario Trucking Association reported late last year that dozens of Ontario-based fleets have been sanctioned for using Driver inc. to avoid paying premiums. Audits of two trucking companies in September led to corrective debit adjustments of more than $200,000.

    The ESDC spokesman said it will be working with the Canadian Trucking Alliance to inform carriers about labor standards and occupational health and safety obligations.

    Public policy push

    The alliance recently launched a public policy campaign that incorporated a group company letter, driver petition, and emails to MPs, explaining the growing challenge of the business model and its impact on the economy.

    The alliance estimates that Driver Inc. costs federal taxpayers at least $1 billion. Much of that would involve drivers who have not paid required income taxes, claiming business-related expenses to which they are not actually entitled.”

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