California Senate passes bill that could transform ride-sharing business for Uber and Lyft

  • Los Angeles (CNN Business) - The California state senate passed legislation late Tuesday that could transition tens of thousands of ride-share drivers from independent contractors into full-time employees.
  • The law would change California employment practices by making it more difficult for employers in the state to treat their workers as independent contractors.
  • Those "gig economy" workers don't enjoy many of the rights employees do, such as a minimum wage, overtime pay, workers' compensation, unemployment insurance and paid sick leave.
  • In June, the the CEO of Uber, Dara Khosrowshahi, and the cofounders of Lyft, Logan Green and John Zimmer, wrote an op-ed in the San Francisco Chronicle arguing that being required to classify drivers as employees instead of independent contractors would "pose a risk to their businesses" and ignored two important points.
  • In 2018, the California Supreme Court changed the requirements companies must use to label their workers as independent contractors.

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