Should ride-hailing services (like Uber and Lyft) be required to offer a tip option if you pay by credit card? A proposed California law says yes.
A.B. 1099, passed by the California Assembly and headed to the State Senate, would require modification of these mobile apps to support credit card tipping. The bill, in its current form, takes no position as to whether these drivers are independent contractors or employees, instead calling them “workers,” but the proposed law is another attempt to legislate controls on the gig economy, rather than letting free market forces play out.
Gov. Jerry Brown has not taken a posiiton on the bill, and it may or may not survive in the California Senate.
California has been a hotbed of litigation for ride-hailing and delivery driving companies, and this latest development shows that State Governments are not afraid to further constrain how companies that use independent contractor drivers run their businesses.
In fact, we saw similar scale-tipping recently in Florida (see blog post here), but that was in an effort to protect ride hailing companies and these companies’ efforts to protect the classification of their drivers as independent contractors.
Keep an eye out for more legislation, especially at the state level, in an attempt to recalibrate the market forces that have brought us the gig economy.