AB5 and the Gig Economy

When you think Gig Economy, probably your mind strays to Uber and Lyft, the big guys in the industry. Perhaps, if you are more aware, DoorDash and GrubHub come to mind. However, most people will not think of the many other ways workers are exploited by businesses, both large and small.

This part of the economy has been growing over the last generation. What it does is that it allows people to work for many industries as independent contractors. Meaning, they are not employees, and the companies can save a lot in things like unemployment insurance and even benefits. The worker is responsible for both.

This significantly lowers the cost for employers. Why they like it a lot. It also outsources costs to the state, in the form of food stamps and other benefits. Granted, Walmart has the same effect though minimum wage with little benefits. Walmart loves it, and we get to pay for it. But so do the big boys of the gig economy such as Lyft and Uber, as well as DoorDash and Ubereats.

However, this will also affect the relationship between freelance writers and employers, as well as graphic designers, and many others. This new legislation is meant to protect their rights and their economic position. It intends to make these relationships less transitional and to transfer some power to workers away from management. It seeks to formalize a business relationship. And if this expands beyond California to other states, this could change the American economy in significant ways.