California regulator rules that drivers for ride-hailing services are employees 

post-title

The ruling will see drivers for services like Uber will now qualify for employee benefits.

The San Francisco Chronicle has reported on a new ruling by the California Public Utilities Commission (CPUC) in the U.S that drivers of e-hailing services (referred to as ‘Transportation Network Companies’, or ‘TNCs’) like Uber are to be considered as employees. The state government body responsible for licensing and regulating some transportation officially ruled Tuesday that the decision was a newly-enacted state law known as AB5, which determines parameters from defining workers contractors or employees who have various legal rights and protections, including better pay, benefits and the ability to unionise. 

The law has made it more difficult for companies to classify employees as independent contractors and that, along with the recent CPUC ruling, is bound to have a significant impact on the gig economy in California. 

Reads the ruling: ”For now, TNC drivers are presumed to be employees and the Commission must ensure that TNCs comply with those requirements that are applicable to the employees of an entity subject to the Commission's jurisdiction.”

Prior to AB5, contractors, freelancers and drivers of ride-hailing services in the U.S have not been able to receive benefits that their full-time counterparts receive like healthcare and paid leave. Companies using the services of these contract workers have therefore not been required to abide by certain labour regulations, such as minimum wage, or payroll taxes for those workers, which feed into programs like unemployment insurance.

Related articles

From creative to strategic communicator: Why Thuso Khoeli believes organisations need to fix the “broken telephone”

For years, Thuso Khoeli was known primarily as a creative. His work centred on ideas, storytelling, campaigns and brands. But after years of working with organisations, leadership teams and employees, he began to recognise a different challenge, one that was happening far beyond the traditional boundaries of marketing and external communication. The problem was often inside the organisation.

Empowering women is an investment in the future of work

Women’s empowerment in the workplace is often discussed in the language of representation, targets and transformation. Those measures matter. But they are not the destination; they are evidence of whether we are changing the conditions in which women enter, grow, lead and succeed. The question is no longer whether organisations can afford to invest in women. It is whether they can afford not to.

Top