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On January 1, a law took effect in the union stronghold of California that poses a dire threat to the so-called “gig economy” by drastically restricting the use of independent contractors, upon which many tech companies depend. The law, referred to as AB 5, was apparently directed primarily at transportation network companies such as Uber and Lyft, which treat their drivers as contractors instead of employees. AB 5, which was promoted by labor unions wishing to organize the drivers, sought to remove the legal impediment of IC status by effectively banning the use of contractors in California. Instead of forcing Uber and Lyft to capitulate, as intended, the overly-broad law has backfired by also threatening long-established practices in the trucking industry, and even the livelihoods of freelance writers in the Golden State.
