The Economy of Sheep in Decades of Decade of Waiting Growth

13

The gig economy is the technical background.

The California bill passed this week threatening to make drivers for tour-hailing companies in employees rather than independent contractors The latest move by regulators and courts worldwide is that companies could block companies like

Uber Technologies
Inc.

UBER 0.21%

and

Lout
Inc.

LFT 0.99%

and food delivery firms such as DoorDash Inc.

New York City earlier this year established a minimum wage for drivers $ 17.22 hours after costs, among other regulations, the first in the country. There are efforts in some European countries to reclassify drivers as employees, including the K, when an appeal court ruled in favor of employment status, sending the last sentence to the principal court.

Together, the movements show that governments are pushing back, demanding many of the same labor protections and other regulatory requirements that companies launched to their business models.

When Uber and other gig-based companies started as TaskRabbit, consumers were initially delighted with convenience and news. Their employment model does not have to be paid – hourly independent contractors who do not have benefits such as health insurance or unemployment insurance – the companies have helped to stay in charge of duties like taxis that can be mitigation in city wage regulations. Workers could fall in and out as they liked, including putting pressure on work between other jobs. However, as services have grown and become ubiquitous, complaints have been proliferated.

For an increasing number of Americans, it is normal practice. However, almost everyone is facing the challenges of disproportionate income and access to benefits.

At the moment when Big Tech began to lose its luster in Washington, the novelty of the riding companies began to decline. Even when consumers have a wide popularity of services, joint complaints in cities and states began to go up with some of their effects such as crowded streets and low driver pay.

“There has been a lot of that way,” said Meera Joshi, who led the agency governing hailing riding and taxis in New York City and oversaw the minimum wage requirement for Uber and Lyft.

“You see the same issues that occur again and again around the world – congestion, driver pay, environmental impact,” she said. “In New York, much of this happened faster.”

Due to the growth of the sector – Lyft has said that more than two million people drove it at some point in 2018, or that more than 1% of the State workforce – other cities and states – is expected to continue. .

“California is not happening in a vacuum,” Bradley Tusk, a political adviser and venture capitalist said his Tusk Ventures was an early investor in Uber. “Politics in the state government is leaving now,” a problem for the companies as the Democrats are pushing further labor regulations on technology, he said.

The movements have threats that they will bring significant costs to the gig economy, stretching over Uber and Lyft to many delivery companies such as DoorDash and Instacart, where the bicycles and delivery cars now have urban streets around the world. Almost any of these companies are profitable, and Uber and Lyft do not particularly recognize clear pathways to make profitability.

Their stocks have struggled since they started the market this spring. Uber has fallen by almost 25% since its IPO, and Lyft is down 35%. Morgan Stanley analysts estimate that California Uber and Lyft's driving costs could go up 35%.

The companies have said that measures such as California do not want the majority of drivers. Economics will force them to change their business models and reduce the flexibility of workers if drivers are classified as employees, they say.

However, both companies say they will continue to work with future governments. A Lyft spokesman said “the company has long worked with regulators to find solutions that will benefit drivers and riders and support innovation.” T

There is a difference between New York regulation and the regulation being discussed in California. Drivers are still independent contractors in New York, but they make a minimum wage, and the number of cars is limited. As a result, the number of trips in the city has fallen recently, and companies have increased prices – making them closer to taxi fares.

The California bill, known as the Assembly Bill 5, seeks to claim that workers who meet a number of conditions, including without setting their own pay, will be classified as employees rather than independent contractors.

“People who work in these areas need to be protected,” he said

Anthony Rendon,

the democratic speaker of the state assembly. “If it affects its business model they probably need to pay more employees.” T

With strong support from trade unions, the bill passed with the legislature, and

Gav Newsom Gov.

a Democrat, said he would have signed.

Uber, Lyft and other companies including DoorDash are still pressing on an agreement that would exempt them – one where concessions would be offered as a benefit fund and a measure allowing drivers to negotiate with a number of employers.

If they fail, they intend to look at voters. The three companies that promised earlier this month spent at least $ 90 million along with funding a ballot initiative to reverse the effects of the bill.

They do not have the effects of the bill when it comes to law. Lyft says that there would be far fewer drivers able to drive in California as it would have to have scheduled changes to manage the supply of drivers. Drivers would not be able to quit between apps – a common practice – and instead would make a minimum hourly wage attached to one.

Both Lyft and Uber have said that charges for riders will rise and waiting times will increase.

After the bill went on Wednesday, Uber immediately indicated that he was not happy, saying that he did not intend to change his practices, as he believes the measure does not apply to his drivers – jobs he is likely to fight in court. Tony West, Uber's general counsel, said Tuesday that the company will continue to “defend our ability to enable independent on-demand work.” T

Alejandro Lazo

added to this section.

Write Eliot Brown at eliot.brown@wsj.com

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