The new bill will affect companies like Uber and Lyft, which are based in California and depend on those working in the gig economy. The rise of the gig economy, where people accept work on a per job basis, has spawned a swathe of mobile apps, normally putting people in touch directly with drivers or riders. However, fears that these tech companies are exploiting their scale to erode workers’ rights have caused lawmakers to look at how to protect those workers.
One of the results of the new bill could be an increase of 30% in costs for these companies if they have to treat workers as employees. Opponents of the bill say it will hurt those people who want to work flexible hours, according to BBC.
Employee status can entitle them to benefits like health care, minimum wage and paid time off. That would change the nature of the gig-economy, which has been a cornerstone of the model adopted by a raft of valuable new companies.
Uber and rival ridesharing service Lyft joined forces to push back again the bill.
In the UK, Uber lost its bid to convince the Court of Appeal that its workers werent staff. It asked the court to overturn an employment tribunal decision that Uber drivers be treated as workers rather than self-employed.
The tribunal ruled that two drivers were staff and entitled to holiday pay, paid rest breaks and the minimum wage.
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