AB5 | 婷婷激情五月天 Our Members Bring Choice, Value & Innovation to Agriculture Wed, 06 Jul 2022 15:48:48 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.4 /wp-content/uploads/2023/09/fema-favicon-75x75.png AB5 | 婷婷激情五月天 32 32 AB5 Expected to Worsen Driver Shortage, Supply Chain Issues /shortliner/ab5-expected-to-worsen-driver-shortage-supply-chain-issues/ Wed, 06 Jul 2022 15:48:46 +0000 /?p=18398 After the U.S. Supreme Court last week refused to hear a case that would have reopened the issue of using independent contractors in California, shippers are bracing for the supply chain impact as AB5 makes a nagging truck driver shortage even more acute.

With AB5, California lawmakers took a swing at gig-heavy, same-day delivery services like Uber, DoorDash and Postmates, and in the process also hit the entire trucking sector.

If carriers lose drivers or are unable to pass the increased cost of maintaining company drivers and vehicles along to customers, 鈥淲e鈥檒l see delivery companies exit the California market,鈥 said Fred Miesch, a senior consultant with Argon & Co. 鈥淭his could then lead to a shift back to private fleet model for intra-California shippers as they scramble to replace lost delivery capacity.鈥

Joe Wilkinson, VP of transportation consulting for enVista, called the Supreme Court decision to deny a request from the California Trucking Association (CTA) for a hearing on the issue 鈥渁 real disappointment,鈥 given the driver shortage and supply chain bottlenecks in West Coast ports.

鈥淣ow we鈥檙e going to throw gas on the fire with an entirely new driver model for many carriers,鈥 Wilkinson said. 鈥淭hat may not be a good analogy, as even gas takes a second to ignite, whereas with the denial of the CTA鈥檚 appeal AB5 goes into effect right now. This leaves affected carriers and independent drivers scrambling for a solution.鈥

In order for California companies to continue to classify workers as independent contractors, they have to meet an ABC test established by the state鈥檚 Employment Development Department. The 鈥淏鈥 portion is the real sticking point: proving the person is performing work 鈥渙utside the hiring entity鈥檚 business,鈥 which would not apply to contract drivers.

Bill Aboudi, owner of AB Trucking in Oakland, told CBS News that 90% of the trucks servicing the port there are independent contractors, 鈥渟o, this is a big, big impact.鈥

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