Uber Vows To Keep Fighting Sweeping California Labor Bill

California lawmakers confronting the changing definition of work approved sweeping legislation Wednesday designed to give many contract workers new pay and benefit protections, but tech giants Uber and Lyft vowed to keep fighting the changes, possibly by bankrolling an expensive fight on the 2020 ballot.

The measure heading to Democratic Gov. Gavin Newsom outlines a three-part test that makes it harder for companies to classify workers as independent contractors who are not entitled to minimum wage and benefits like workers compensation.

Uber has argued that forcing its drivers to become employees would upend a business model that is built on flexibility. General counsel Tony West suggested to reporters that the ride-hailing company won’t start treating its workers as employees come Jan. 1, instead defending its model if it faces legal challenges.

“Just because the test is hard does not mean we will not be able to pass it,” he said.

Newsom has pledged to sign the measure, but his office hopes to bring ride-hailing and meal delivery companies to the table with labor unions to negotiate a separate set of rules for workers who pick up jobs on their own schedules in the so-called gig economy.

The freshman governor faces a test of his ability to broker a compromise between powerful interest groups in Silicon Valley and organized labor. Steve Smith of the California Labor Federation, a sponsor of the legislation, said the companies so far haven’t made acceptable proposals.

“We’re committed to creating the conditions for (negotiations) to happen,” Newsom spokesman Nathan Click said.

If Newsom signs the legislation, it could have national implications as politicians and businesses confront the shifting nature of work.