SACRAMENTO – According to the San Jose Mercury News, app-based delivery company Deliv is laying off nearly 600 California drivers, “just months after the company changed its business model to cope with controversial state rules regarding independent contractors.”
From the Mercury News:
Last June, ahead of the pending approval of AB 5… Deliv launched a sweeping change in how it would categorize many of its workers.
Deliv created a subsidiary, Deliv California, that would hire its drivers in California as full-fledged employees of the Deliv unit.
The company expressed confidence that transforming its gig workers into official employees wouldn’t harm its enterprise.
“Deliv’s ability to offer cost-effective same-day delivery is driven by its proprietary technology and unique business model, not the classification of workers,” the company stated last June.
In January, legislative bill AB 5 became a California law, but just a few months later, Deliv began to falter badly.
“Due to a confluence of events over the past few months, Deliv will, unfortunately, be winding down our operations over the next 90 days,” Daphne Carmeli, chief executive officer of Deliv, wrote in an email to employees in early May.
The largest cluster of layoffs affected 591 drivers for Deliv California, according to the notice.
Experts have warned that removing drivers’ ability to work as independent contractors would eliminate hundreds of thousands of app-based jobs in California.