On Tuesday, California Attorney General Xavier Bacerra filed a lawsuit against ride-sharing companies Uber and Lyft for classifying their drivers as contractors rather than employees as supposedly required by the state’s controversial new law, AB-5. Signed last year, AB-5 restricts the ability of companies to hire contractors except in limited circumstances, thereby entitling more workers access to an hourly wage, health insurance, and other benefits.
While this sounds like a worthy ideal, the Golden State is making a big mistake pursuing this lawsuit. Classifying ride-sharing drivers as employees will likely lower the income of good drivers while leading to more expensive rides for customers. Especially in the middle of a pandemic, California should be making it easier for entrepreneurs to do work instead of hassling them.
