The various Ubers of Lawn Service might be in trouble.

tonygreek

LawnSite Platinum Member
Location
Connecticut
This particular shoe dropping, the classification of independent contractors vs employees in the Gig Economy, is something we've been on the look out for and it seems to finally be in the sights of various states.

A fatal flaw, and a piece that's highlighted as a risk in the various prospectuses, is the exposure to, and potential for, the numerous "Ubers of Lawn Care/Landscaping/Dog Walking/Etc" being hit with a forced classification.

Viat today's NY Times

California legislators approved a landmark bill on Tuesday that requires companies like Uber and Lyft to treat contract workers as employees, a move that could reshape the gig economy and that adds fuel to a yearslong debate over whether the nature of work has become too insecure.
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The bill may influence other states. A coalition of labor groups is pushing similar legislation in New York, and bills in Washington State and Oregon that were similar to California’s but failed to advance could see renewed momentum. New York City passed a minimum wage for ride-hailing drivers last year but did not try to classify them as employees.
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“Today the so-called gig companies present themselves as the innovative future of tomorrow, a future where companies don’t pay Social Security or Medicare,” said State Senator Maria Elena Durazo, a Democrat. “Let’s be clear: there is nothing innovative about underpaying someone for their labor.”


https://www.nytimes.com/2019/09/11/technology/california-gig-economy-bill.html

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Via today's LA Times

“Today we are determining the future of the California economy,” state Sen. Maria Elena Durazo (D-Los Angeles) said. “We can either choose to become complicit in the exploitation of hard-working Californians or we choose to rebuild the working and middle class, protect taxpayers and help responsible businesses thrive in the state.”

AB 5 would remake California employment practices by aligning the law with a 2018 California Supreme Court ruling that significantly expanded the number of workers who must be provided benefits as business employees.

Opponents said the bill would harm the millions of Californians who work as independent contractors and have the ability to set their own schedules.


https://www.latimes.com/california/...-independent-contractors-employees-newspapers
 

That Guy Gary

LawnSite Gold Member
Location
SW Idaho
I think the companies like taskeasy and lawn love are pretty safe with their classification.

The contractor has control over what equipment they use, time and date of service, freedom to refuse work, etc.

A lot more than the guys running private taxis.

Reading the text of the bill I don't think they'll be affected.

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5

One of the most important distinctions will probably be running a business that performs similar work for other clients.
 
OP
tonygreek

tonygreek

LawnSite Platinum Member
Location
Connecticut
One of the most important distinctions will probably be running a business that performs similar work for other clients.
Completely agree.

With the A-B-C test, A&B look to be difficult to do an end-around on.

To be classified as a contractor:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
To add to that, the payment price setting via the Ubers of Lawn could be problematic, as are the no raid, non-competes. Trying to slide a 12 month non-compete by, especially when you look at B, is going to be tough.
 
OP
tonygreek

tonygreek

LawnSite Platinum Member
Location
Connecticut
Timely... Uber just offered their end-around to Part B via a media call.

"But just because the test is hard does not mean we will not be able to pass it. In fact, several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces." - Tony West, Uber’s Chief Legal Officer

https://www.uber.com/newsroom/ab5-update
Basically, we're not exempt from Assembly Bill 5 because it's not even applicable to us. Our contractors aren't in the same business as us. They drive cars. We're simply a software company.
 

That Guy Gary

LawnSite Gold Member
Location
SW Idaho
Completely agree.

With the A-B-C test, A&B look to be difficult to do an end-around on.

To be classified as a contractor:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
To add to that, the payment price setting via the Ubers of Lawn could be problematic, as are the no raid, non-competes. Trying to slide a 12 month non-compete by, especially when you look at B, is going to be tough.
Taskeasy and the like don't require non competes, they require no solicit agreements and these are perfectly normal and imo acceptable when hiring contract labor.

You can also attempt to negotiate prices to some extent with them. Not so easy with regular maintenance but something their contractors are successful at often enough for cleanups, one time jobs and such.

I don't really disagree with Uber's interpretation of B either. I wouldn't be surprised if none of their employees ever drive around passengers for compensation, so it's not really work the company normally does.
 

Mumblingboutmowers

LawnSite Senior Member
I would say this whole thing is just a way for them to increase tax revenue. With subcontractors, they may or may not pay their income taxes at the end of the year. Treating them as employees instead would mean instant taxation on the wages. Of course they try to spin it as they are looking out for the working class.
 

Oxmow

LawnSite Bronze Member
Location
Oklahoma
Completely agree.

With the A-B-C test, A&B look to be difficult to do an end-around on.

To be classified as a contractor:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
To add to that, the payment price setting via the Ubers of Lawn could be problematic, as are the no raid, non-competes. Trying to slide a 12 month non-compete by, especially when you look at B, is going to be tough.
So if a business hires a contractor (construction maybe?) and tells them that they have to start after closing, be cleaned up by opening, can only park in a certain part of the parking lot, etc... then that makes them an employee of the company right?
 
OP
tonygreek

tonygreek

LawnSite Platinum Member
Location
Connecticut
So if a business hires a contractor (construction maybe?) and tells them that they have to start after closing, be cleaned up by opening, can only park in a certain part of the parking lot, etc... then that makes them an employee of the company right?
That's a bit too literal of an interpretation.
 

Oxmow

LawnSite Bronze Member
Location
Oklahoma
Lawyers can be quite literal!
 

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