California's AB5

[Michael Ludwig]

I've been doing a bit of reading lately, and have come to discover that the Biden administration in the U.S. is quite in favour of California's AB5 regulation and it's cumbersome ABC test, and it appears as if the fed would like to roll it out across the U.S. Undoubtedly, if that happens, it will have a cascading effect here in Canada.
If that happens, it appears the only workaround for Owner/Operators would be for them to have their own Company Name, Business Number, CVOR, WSIB, PL, PD, & Cargo Insurance, and be required to invoice the carrier instead of the carrier simply paying them as we do now.
It's a simple lengthening of the food chain ...
Owner/Operators become carriers
Carriers become load brokers
Load brokers become 3PLs
3PLs become 4 PLs
4PLs become 5 PLs (?)
From a government perspective there is no way on this green earth that any one of the governing departments will be able to keep a handle on this situation.
Buckle up boys and girls ... this could be a fun ride !!!

 

[MLCAR]

all AB5 is really going to do, is make the prospect of being an O/O obsolete. This really just helps the mega carrier who's been looking for drivers for their trucks. Its interesting timing too considering California passed the bill during covid with economic heading to the gutter. The single truck or 5 truck O/O's working under mega carriers cant afford the cost of authorities and permits, and also take a load at a 5x discounted rate. The solution: "close up shop, sell you truck and come drive one of ours and you'll be happy." the increase in voluntary revocations for MC's is a sign of that. For now O/O's in other states are able to drive for another carrier under their authorities, if AB5 goes nationwide that'll be a death sentence to the O/O's.

 

[Phantom T]

This has been a threat for a while now. It’s not specific to trucking either; it’s actually for all industries.