OAKLAND – A law designed to force gig-economy companies like Uber, Lyft and DoorDash to accept workers as employees is also having a profound impact on the trucking industry. AB5 was intended to give transport workers more workplace protections, but for truckers who own and operate their own rigs, they said it may be the end of the road.
On Thursday, June 28th, the U.S. Supreme Court made news again, this time by refusing to hear a challenge by California truckers to the new law that requires truck drivers to be employees of the trucking companies they do business with.
“This ruling really took everybody off-guard, especially at the speed that they kicked this back and essentially made it law,” said Paul Brashier, Vice President of ITS Logistics, a commercial transport company.
The problem is, nearly all of the state’s goods are transported by truck, many of which are owned and operated by individual drivers.
That’s especially the case at the Port of Oakland.
“There’s 9,000 trucks that serve the port on a daily basis, and 90% of them are independent contractors. So, this is a big, big impact,” said Bill Aboudi, owner of AB Trucking in Oakland.
Aboudi employs his own drivers, but also uses independent contractors to handle overflow business, which he just said became illegal. Aboudi says he won’t be able to use trucks owned by the drivers anymore.
“It just doesn’t work. You own your own truck, it’s your truck. I can’t take possession of it and start using it,” he said. “In a case like my company, we just eliminate owner/operators and just reduce the workload.”
That’s a disaster for Hedayatullah Abrahami, who just bought his own truck a month ago.
He, like other owner/operators, spent tens of thousands of dollars to not be someone’s employee, and feels a sense of pride in owning his own truck.
“Oh, yeah, why not?” said Abrahami. “Yeah. That’s my own truck, working for myself, that’s really good. I’m happy for that.”
Now his truck will be useless unless he wants to become his own trucking company, booking his own loads and dealing with the port bureaucracy. That kind of paperwork was always done for him by AB Trucking.
“They arrange everything,” he said. “They talk to the big companies, to the port and everything. They pick all the loads for us.”
Abrahami’s dream of being a truck driver just got a lot more complicated.
Brashier predicts many won’t stay in California, which, he said, will only make the supply chain problems worse and the cost of everything in the state even more expensive.
“It’s going to adversely affect everybody,” he told KPIX 5. “And at the end of the day, with where we are with inflation being as high as it is, this is going to put inflationary pressure on the consumer, right?”
Ironically, companies like Uber and Lyft were exempted from AB5 with the subsequent passage of Proposition 22. But Brashier said he believes AB5 was always intended to force independent truckers into trucking companies, making them easier to unionize.
Now that it is law, no one seems to know how it will be enforced or who will enforce it. But there isn’t much time to figure that out. By court order, it is supposed to go into effect seven days from last Thursday.