A accusation filed by Uber, Postmates and added parties adjoin a accessible California law acclimation gig-economy assignment makes a aged case, U.S. Rep. Ro Khanna told CNBC on Tuesday.
"I anticipate their altercation is actual weak," Khanna, the Democratic adumbrative of California's 17th Congressional District, said in a "Power Lunch" interview. His commune includes genitalia of the San Francisco Bay Area, area Uber, Postmates and added Silicon Valley technology firms are based.
On Monday, Uber and Postmates abutting two contractors alive for the carriage apps in filing a clothing alleging that the accompaniment of California's Assembly Bill 5 is unconstitutional. The law, active by Democratic Gov. Gavin Newsom in September and set to go into aftereffect Wednesday, will force the companies to reclassify gig workers as advisers instead of contractors.
"The altercation is that the rewards of the technology anarchy has gone to a actual few," Khanna said, abacus that accompaniment assembly appetite to "distribute [the profits]. Let's accomplish abiding that anybody alive in this new abridgement is benefiting, not aloof the actual top."
The accusation filed in the U.S. Commune Court for Central California claims that AB 5 was "designed to ambition and asphyxiate workers and companies in the on-demand economy." It additionally argues there are "nonsensical" exemptions for added architect roles, such as "direct salespeople, biking agents, admission writers, architecture barter drivers, bartering fisherman," amid others.
The law does, however, affect workers alfresco the gig economy, which is area bodies about about-face to acquisition adjustable and non-traditional jobs as absolute contractors and freelancers. AB 5 includes freelance writers and added types of contractors. Vox Media said it would cut freelancers in California because of the bill.
Being that drivers are absolute contractors, they are not advantaged to benefits, such as paid time off, overtime or bloom insurance, that companies about action to full-time employees. Uber, which has become a boxy adversary to the auto industry abnormally in cities such as New York, lists 3.9 actor drivers as absolute contractors.
Some of those drivers, including battling Lyft contractors, accept afresh protested adjoin low pay and alive conditions.
Protestors advance through the banking district, ambitious fair accomplishment and added accuracy during a bang adjoin Uber in San Francisco, California, May 8, 2019.
Kate Munsch | Reuters
In a account provided to CNBC, Postmates said the accusation is advised to "preserve on-demand assignment opportunities." The aliment commitment account aggregation says it is advocating that industry and activity leaders and assembly "modernize a able-bodied assurance net" that includes carriageable benefits, balance aloft the minimum allowance and able flexibility.
In August, Uber, Lyft and DoorDash bankrolled $90 actor for a California election action to actualize an another model.
When asked if there could accept been a private-market band-aid to abode the activity practices of Uber and Postmates, Khanna said the bill gives the absolute contractors the adventitious to unionize.
"This bill is adage that if you assignment in the gig abridgement you should accept the appropriate to unionize and the appropriate to arrangement for fair wages," he said.
"This law is all-important so that drivers can accept some account of the gig economy. I beggarly you accept Uber that's account $50 billion," Khanna argued. "What this law is adage is back you accept a aggregation that's as assisting as Uber, in agreement of their bazaar value, again accomplish abiding that the bodies accomplishing the work, the drivers, are benefiting as well."
Representatives of Uber did not anon acknowledge to CNBC's requests for comment.
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