NEW YORK, NY - JULY 30:  A Lyft ride hailing vehicle moves through traffic in Manhattan on July 30, 2018 in New York City. After a significant increase in local traffic and a spate of suicides by taxi drivers, New York City is planning to vote on capping ride-sharing services such as Uber and Lyft. The  City Council's move to vote on the measures could come as soon as Aug. 8. If the vote was to succeed, New York City would become the first major U.S. municipality to cap ride-sharing services.  (Photo by Spencer Platt/Getty Images)
New bill would make rideshare drivers benefits-eligible
00:55 - Source: HLN
CNN  — 

California has had it with the companies that control the so-called gig economy.

The state is on the verge of passing AB-5, a bill that would make it more difficult for employers to treat their workers as independent contractors, also known as gig economy workers.

But what is the gig economy? Let’s try and sort through the noise.

What is the gig economy?

If you’ve ever been a freelancer, a temp or really any sort of independent contractor, you’ve participated in the gig economy.

“Gigs” in this sense are essentially short-term or project-based work, and “gig workers” are the independent contractors hired to do those jobs. The gig economy is essentially based on corporations who contract these people for temporary jobs, rather than hiring for permanent positions.

Who is a gig worker?

For starters, gig workers are not homogeneous. Independent contractors include anyone from Uber and Lyft drivers to independent consultants.

The Gig Economy Data Hub, a project by the Aspen Institute Future of Work Initiative and Cornell University’s Industrial and Labor Relations School, collects demographic data on gig workers.

They break it down like this: “Some work pays particularly well, offers high levels of flexibility and control, and tends to be held by advantaged groups, often on a supplemental basis. Other non-traditional work provides low wages, and tends to be held disproportionately by disadvantaged groups, who often rely on it for their primary livelihood.”

And that’s where the problems come in.

Gig workers don’t typically have the rights that actual employees enjoy – things like minimum wage, overtime pay, paid sick leave, or other benefits. They are also sometimes expected to pay their own expenses. If you make a lot from your gig, like as a consultant, this might be doable. But if your primary work is as an Uber or Lyft driver, it can be harder.

Are there any benefits to gig work?

As a gig worker, you’re the boss. You decide when to work, how much you work and what type of work you do – all without being locked into a 9 to 5 for the rest of your life.

Wait, gig work doesn’t sound so bad…

It doesn’t have to be, especially for those making the most money or for people just looking for a side hustle.

But not every gig is equal, and the lowest-paying ones are often held by disadvantaged groups, as the Gig Economy Data Hub pointed out.

And yes, the gig economy is praised for its flexibility – one of the points Uber CEO Dara Khosrowshahi made in an op-ed in the San Francisco Chronicle arguing for the continued use of independent contractors.

But others have called the gig economy exploitative, especially for those who depend on low-paying gigs as their main source of income – as 1 in 10 workers do. Some don’t have access to better jobs or pay, leaving them with little choice.

Some Uber and Lyft drivers around the world protested earlier this year, demanding livable incomes, job security and regulated fares, among other things.

They’re the kind of demands that many employed workers are guaranteed.

“The drivers are the ones who are running the business, driver Muhumed Ali told CNN at the London strike. “We are collecting pennies.”