Gig Economy: An American Dream or an American Nightmare?

California is all set to implement the Assembly Bill 5 which favors the independent contractor in Gig economy as an employee entitling them to job security, medical claims, life insurance and all perks offered to a traditional employee in a structured economy. Uber, Lyft and Postmates Inc. are nearly threatened by these laws as it'll have a massive impact on their business model. Companies refer these laws as unconstitutional. Uber and Postmates argue that legislative process around California’s Assembly Bill 5 is unfairly targeting gig economy companies while favoring other industries and that the law will threaten workers’ flexibility.

To understand the current scenario, we first have to take a look on what a gig economy really is and how is it different from a traditional economy. The word gig means a job that is temporary. Therefore, gig economy implies a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

In contrast with a traditional economy which generally has an employer-employee structure with fixed work hours, minimum wage and a contract, gig economy is oppugnant as workers are their own boss, can decide their work hours but with no perks or whatsoever. The speculation is, California, specifically is targeting Uber and other big tech giants as drivers have often complained about how stressful their "independent job" is and they are barely able to make their ends meet. Most of these drivers don't have / can't afford a medical insurance. In the midst of this angst, although the intention of California state is to protect drivers, this whole law is threatening the liberty of other workers. The bigger question is, can a government snatch a worker's Independence and make him an employee just to make sure that they get job benefits?

Or perhaps should we question the practice of companies like Uber & Postmates that, in the name of " Independent contractors " leech out profit from them, don't regulate the incentives to driver's liking and they're not even able to pay their bills.

A balance between regulation and workers should be sought here.

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