Matt Schrap, the CEO of the Harbor Trucking Association in Long Beach, California, offers some free advice to independent drivers after the US Supreme Court threw their employment status into legal limbo.
“Find a lawyer,” he said.
California truck owner-operators must comply with California’s Assembly Bill 5 after the high court on June 30 refused to review a case challenging the legislation that sets out the tests for employment-status classification.
Schrap is projecting some level of capacity loss as drivers exit the market because they either don’t want to be employees, or they don’t want to obtain their own operating authority.
The cost to transition from an owner-operator model may reach $20,000 annually as truckers file for the appropriate licenses and pay additional fees and insurance, he said.
California passed the AB5 law in 2019, aiming at gig-economy giants including Uber, Lyft and DoorDash. But these companies won exemption, along with other professionals, including musicians, freelance writers and architects.
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