California's new gig economy law could impact trucking industry

OAKLAND, Calif. (KTVU) - The hard-fought battle for the employment law Governor Newsom signed Wednesday that could convert hundreds of thousands of independent gig workers into full-blown employees already has some scary, unintended consequences. 

It could very well have a devastating impact on one of the state's most basic and necessary industries. Come New Year's, the law to transform Uber drivers from independent contractors to employees, may wreck the entire port trucking system. 

Of the 9,000 truckers serving the Port of Oakland, about 8000 are independent truckers. Some 437 port trucking companies broker work for them. 

"We can't use them at the beginning of the year and they have no home. They have no way to get work. They have no way to communicate with anybody because we're the ones that give them the work and we coordinate all the communication for them," said AB Trucking owner Bill Aboudi. 

That includes port and Homeland Security registry, making sure they have right permits, insurances, get paid, pay taxes and have loads to haul. On really busy days, AB Trucking may hire as many as 50 drivers who own or lease their own trucks. Come January, the law forbids AB Trucking from using any trucker it does not directly employ. 

"I think it's gonna be mass confusion and the system will collapse," said Aboudi.

Manufacturers, shipping companies, terminal operators, railroads, and those who order the goods all depend on truckers. They all count on each other in a worldwide supply chain. None of these firms are likely to hire thousands of drivers. 

"And, once you take that link of owner-operator out, everything falls apart," said Aboudi.

If this was just a port trucking problem, that would be bad enough. But the fact is, it spreads over the entire trucking industry in California and nobody can live without trucks. 

"It's gonna drive up pricing. The jobs, you know, come Jan. 1, it's gonna be a real problem," said Greg Menna's, owner of a construction hauling company who also uses many independent truckers. "We're really busy from April through December and then we're slow for two or three months," said Menna. 

So, could Menna keep them busy as employees? 

"No, they'd get all laid off in the wintertime," said Menna. 

Many independents like their situation. 

"We have a lot more opportunity to make a lot of money than being an employee," said independent trucker Thomas Thivouvot. 

UC Davis grad Thien Tran, gave up a career setting up computer networks to become an independent trucker. 

"I don't think I'd be doing trucking if I wasn't owner-operator," said Tran. 

"Maybe my company will last through May and then I'll be forced out of business with all these owner-operators. They'll be done," said Menna.

Powerful trucking unions like the change and a chance for many new members. But, at least four independent truckers told KTVU that even though they pay the expenses for owning and maintaining their vehicles, they make twice than employees driving company-owned trucks.