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California truck drivers fear economic overhaul from AB5

Truck drives along Highway 99 in Bakersfield, Tuesday, December 31, 2019. KBAK/KBFX)
Truck drives along Highway 99 in Bakersfield, Tuesday, December 31, 2019. KBAK/KBFX)
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BAKERSFIELD, Calif. (KBAK/KBFX) - AB5, dubbed the "gig economy law" will go into effect January 1, requiring companies to treat contracted workers as full-time employees, providing them with benefits including paid sick days, minimum wage, and health insurance. But other industries, from freelance writers to nannies, are implicated by this law. The big one for Kern County is the trucking industry.

"The law was intended for the gig economy, the Ubers and the Lyfts," Roy Peters, general manager at Affinity Truck Center in Bakersfield, said. "The trucking industry has been a casualty of this legislation."

The California Trucking Association is challenging AB5 in federal court, claiming the law will forbid carriers from contracting with owner-operator truck drivers, which represent over a quarter of the state's truck drivers.

Peters expects he'll sell fewer commercial trucks next year as a result of AB5.

The CTA expects many drivers will leave the state, as carriers opt not to hire drivers from California.

Prime Inc, a major trucking company, has offered relocation packages to its 6,000 California truck drivers, according to trucking consultant and CTA member, Bill Burgemaster.

Starting Wednesday, to stay in business, California truck drivers will either need to pay thousands of dollars to become their own LLC company, and include workers' compensation, health care, and payroll, or chose to work for a larger fleet, pitting autonomy against economy.

"The benefit of being an owner operator all these years was, golly, I'm in business for myself, so if I wanted to haul for Safeway, Albertson's, Walgreens, it was irrelevant," Burgemaster said. "I could choose who I haul for, and it's no big deal. Now, with this, it's a huge deal."

Over the long haul, if carriers agree to pay more for California truck driver employment, the cost of the products they transport would go up too. It's already expected for ride share services.

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"If you are in California and you get Uber or Lyft rides, you'll probably see a 30 percent increase in your fare," Ryan Vet, CEO of Boon, and a gig economy expert, said, noting it would average an extra dollar or two a ride. "Over a year, that's going to be a lot."

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