Ride-hailing giants Uber and Lyft are teaming up with restaurant delivery service DoorDash to fight California’s AB 5, a law that would force gig-economy companies that survive on contractor labor to register their drivers (or dashers) as employees and offer them benefits, Vox reported.
The coalition, the Protect App-Based Drivers and Services campaign, is attempting to place a referendum on the 2020 California ballot that would give voters the choice to exempt ride-sharing services from the law. That would presumably include DoorDash, which is not a ride-hailing service but essentially iterated Uber’s business model, employing drivers to escort food instead of passengers from A to B on demand.
Pared, the platform matching restaurant and hospitality workers with businesses in need of staff to cover shifts, is expanding to DC. Pared is already live in New York and San Francisco, and it plans to expand to Philadelphia, Boston, and other locations in 2020.
The San Francisco-headquartered startup claims its service offers a prime deal for workers and businesses alike. It says it offers hospitality and food service workers higher wages and flexibility while offering businesses a ready workforce amid perennially high turnover in the industry.
The landmark California gig economy bill that may force companies such as Uber, Lyft, and DoorDash that employ thousands of drivers as independent contractors to hire those people as employees became law today. Democratic Governor Gavin Newsom signed the bill.
If the bill does ultimately affect Uber, Lyft, DoorDash, and other companies in the so-called gig economy thriving on venture capital for the last decade, it will severely disrupt their business models, which rely on cheap labor.
Uber and Lyft are already losing billions of dollars, and long-term concerns about whether they will ever hit profitability have endured, making for relatively weak runs on the public market. If the companies cannot come close to profitability with cheap labor forces without benefits, having to treat drivers as employees could pose an existential threat. At the very least, it may require Uber and Lyft to slow down expansion and rein in their ambitions, suggesting that the heyday (or hallucinatory days) of Web 2.0 could be coming to a close.