ab5

California’s political leaders are pushing rideshare companies and consumers will suffer

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San Francisco, CA – On Wednesday, the CEO of Uber said that if California’s AB5 law is carried out against rideshare firms, the company will consider pulling all of its services from the state.

Yaël Ossowski, deputy director of the Consumer Choice Center, a consumer advocacy group, calls it a “sad day” for California rideshare consumers drivers.

“Through AB5 and similar legislation, California’s politicians have been sending the signal that rideshare companies are not welcome in the Golden State. But that’s not what consumers want,” said Ossowski. “The flexible model that has so far propelled the growth of companies like Uber, Lyft, and others has been beneficial for both drivers who want independence and consumers who want convenience and competitive prices.

“If Uber and other companies shut down in California, it will prove that the state is no longer a hotbed of innovation, but rather the place where innovation goes to die. It’s unfortunate that millions of Californians will be deprived of more choice if that happens. The same has also proven true for the thousands of freelancers who now find themselves out of work.

“California politicians may have the noblest of intentions, but forcing rideshare companies to become taxi companies does nothing but help the taxi cartel maintain its monopoly and deprive people of earning a living on their own terms.

“Hopefully, voters will choose to support Prop 22 in the fall to reverse course and restore the ability of drivers and other freelancers to earn a living how they want,” said Ossowski.

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The Consumer Choice Center represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva, and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

CONTACT:

Yaël Ossowski

Deputy Director

Consumer Choice Center

yael@consumerchoicecenter.org

As Predicted, California’s Gig Economy Labor Rules Are Already Backfiring

California unions protest for passage of AB5, to make all contractors and freelancers employees.

Back in September, the state of California passed AB5, the law requiring all companies using contract workers in the state to treat them as employees.

Labor activists and unions were insistent that this law was necessary to provide security and stability to the thousands of contractors and gig economy workers throughout the state.

At the time, we warned it would be very harmful both for consumers and contractors. Our comments were featured in a Mashable article, as well as hosted on our website. Now, it seems it panned out, unfortunately.

Because of the stricter regulations on companies based in the state, various media outlets have announced they would be laying off thousands of freelance and contract workers they can no longer afford to employ.

Specifically, Vox Media, who called the law a “victory for workers everywhere“, announced it was parting ways with all of its California-based freelancers.

The layoffs are, of course, unfortunate. No one supports large and systematic firings, and certainly not in the news media, a vital industry to our democracy. But the economic trends in journalism have been negative for several years.

However, at the same time, it’s important to note that these kinds of laws, those that seem the most well-intentioned, actually end up having very detrimental effects.

That’s a lesson for practically every piece of legislation, and why we will continue to be active at the Consumer Choice Center. Laws have consequences that are very real and impact people’s lives.

Let’s hope California can clean up its act and allow freelancers and contractors to make a living without too much interference.

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