With the air of the recently passed AB5 hanging over California like a smog, and with executives from ride-sharing tech giants Uber and Lyft failing to appear at a Congressional hearing over lax safety oversight, lawmakers are turning their focus to independent contractor classification in the country.
Debates in Congress have been spurred on by regulations out west in California where legislation was passed by the State Assembly in May and the state Senate in September, outlining a way to determine the work status of independent contractors, such as truck drivers or ride-sharing drivers.
The hearing, which was overseen by the Highways and Transit subcommittee of the House Transportation and Infrastructure (T&I) Committee in October, honed in on the need for driver background checks for transportation network companies. This has all happened in the wake of homicides and assaults committed by people posing as ride-sharing drivers.
“It’s hard to imagine that Uber and Lyft didn’t actually show up here today – it’s really disrespectful to the committee and a bad play on their part,” said Thomas Suozzi (D-New York).
The Democrat from New York and his Republican colleague from New Jersey, Chris Smith, threw their support of laws requiring enhanced vehicle identification to make it more difficult to impersonate an actual ride-sharing driver.
Beyond addressing public safety issues surrounding independent contractors, whether in ride-sharing or trucking, Congressional members also debated the topic of worker classification, a big issue coming out of California, as mentioned above. The law will go into effect on January 1, 2020, and will lower the threshold in California for classifying a worker as an employee. This is projected to have major cost implications for everyone from ride-sharing companies to freight companies who hire truck drivers on a daily basis.
Certain Congressional members have shown support for the AB5 legislation, detailing its goal of identifying the difference between independent and permanent employees. This will surely have freight companies rethink the way they hire employees and classify them in their truck insurance options. This issue is gaining attention for its effects on Uber and Lyft in a state where ride-sharing arguably got its start or at least its growth.
The debate around whether or not to elevate stricter tests on independent contractor status outside of California, using the state as a jumping-off point, was also brought up with Republicans on the Hill shooting it down and Democrats wanting to push it along.
“I don’t necessarily think that this committee should blindly follow the state of California,” said Pete Stauber (R-Minnesota). My state is much different than the state of California. It’s much more rural, and I think we have to have a broader look at this issue the transportation network companies, and how we can serve not only urban but rural communities.”
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