What do carriers think of AB5? It’s less clear than you might think

A FreightWaves survey of carriers suggests most believe California’s AB5 independent contractor law will affect their business.

California’s AB5 has made for the kind of articles media outlets dream about. 

As it’s been litigated over the past couple of years, we’ve seen unions jostle with lobbyists, spirited protests slow commerce (see last month’s blockade at the Port of Oakland) and a larger ideological showdown that pits ideals of workers’ rights against the flexible labor that gig economy proponents say is a feature, not a bug.

Amid the rancor, a lot of uncertainty still surrounds AB5: uncertainty about what it means and to whom it applies as well as about how it will even be enforced.

Essentially, the bill requires that many companies using independent contractors reclassify those workers as employees, which in the trucking world could have industry-shifting implications.

In a recent survey, FreightWaves asked carriers what they thought about AB5.

We left the survey open from July 21 to Aug. 1, and 171 people completed it. Respondents were not asked to identify themselves or their company.

The survey found that some respondents view the bill as an existential threat to the current way American supply chains function. To others, it’s a necessary legislative step to prevent companies from taking advantage of workers.

Source: FreightWaves Research – August 2022

The majority of respondents (53.8%) said they were in management positions, while 11.11% identified as drivers.

Source: FreightWaves Research – August 2022
Source: FreightWaves Research – August 2022
Source: FreightWaves Research – August 2022

There’s substantial disagreement with the statement, “California’s independent contract law (AB5) has no impact on my business.” It scored the lowest weighted average of the bunch — 1.95 or, in effect, “moderately disagree.” A full 56.73% of respondents selected 1, however, which equals “completely disagree.”

But the rest of the statements are more split. The only other one that enjoyed fairly significant agreement is “AB5 has limited my freedom of choice,” which scored a 3.67, indicating moderate agreement.

In the survey we asked the open-ended question, “What do you think about AB5?” [Note: This is a small selection of the responses received, and some have been lightly edited.]

“It will hurt the California economy and therefore the U.S. economy. With the Ports of L.A. and Long Beach being the largest import berths in the U.S., this will only further increase the supply chain issues.”

SONAR: Container Atlas — Altogether, the Ports of Long Beach and Los Angeles imported 810,399 TEUs from July 13 to Thursday.

“This is a good move by the government, and it needs to be adopted across the nation. Too many companies are taking advantage of the owner-operators and they need to get all of the benefits that are due to them. Many owner-operators do not understand this law and think that it was intended to hurt them, while it will actually help them in the long run. Many companies are intentionally offering high-mileage old trucks to drivers so that they can keep them off of their company roster and avoid the taxes and benefits that they would otherwise have to provide. Because of this third-party relationship with the shippers, many owner-operators are finding that the carriers are baking the books to take money off of the drivers’ rates. It all needs to stop. All truck drivers should get paid fairly. This model is a smoking mirror, making owner-operators think that they are in control when they actually are not, but instead are getting taken advantage of.”

“It’s completely stupid. Truckers are having a hard time as it is. First the CARB law, now ELD, now this. Being a trucker is not easy work, though it can be when you’re rolling. Let drivers decide their own fate. AB5 will throttle the entire business. For those truckers who break the law and cause accidents, the rules should be swift and severe. But don’t penalize the entire industry. Give the truck driver some autonomy to choose their own path.”

To see more reader responses, download the PDF of the full article.

Source: freightwaves - What do carriers think of AB5? It’s less clear than you might think
Editor: Joe Antoshak