Assembly Bill 5 Demolishes Autonomous Driving as Biggest Trucking Threat

Assembly Bill 5 Demolishes Autonomous Driving as Biggest Trucking Threat

Despite technological advancements to the movement of goods, trucks will still transport and deliver and incredible amount of goods in 2020. But automation and self-driving research are not the biggest threat to truckers anymore. California’s contested Assembly Bill 5 has emerged as the main crisis threatening truck operators.

The regulatory sucker punch from state lawmakers and the governor came last fall with the passage of Assembly Bill 5.

Truck drivers were one of the many classifications of workers that did not receive an exemption from the new law. It’s no surprise that many truck drivers and the firms that employ them are not Fortune 500 companies. Sure, they can be very successful, but bringing on truckers as full-time employees ruins the industry’s owner and operator business model, along with profitability and freedom to choose jobs and routes.

The California Trucking Association is trying to fight back. They’ve sued the California attorney general and other state agencies. The trucking association is looking for injunctive relief in the federal district court in Southern California. A federal judge granted some staying power to the lawsuit by blocking the new law in favor of the 70,000 independent truckers it impacts. U.S. District Judge Roger Benitez could impose a permanent injunction in the name of interstate commerce.

The association says in the lawsuit, “Given the realities of trucking, it would be impracticable if not impossible for CTA’s motor-carrier members to provide interstate trucking services by contracting with independent owner-operators and to simultaneously comply with California’s onerous requirements for employees.”

Shawn Yadon, California Trucking Association CEO, has tried to make that point again and again. In a September 2019 interview, Yadon says the seasonality of trucking and transportation of goods mean that flexibility is needed, not a traditional 40-hour a week schedule.

One truck operator, mentioned in the same news story, said he enjoyed picking and choosing his own hours because of family commitments. The new gig economy bill will probably reduce, if not eliminate, those freedoms.

To get around the new provisions, truckers could do a few things: one is to start their own LLC company. That isn’t free, though. They could join a larger trucking company, sacrificing the freedom to pick their schedule and where they drive. Or, they can leave. A recent story from Bakersfield said that Prime Inc., a major trucking company, is offering relocation packages to its 6,000 California drivers.

In our recent “3rd Annual PRI All-Stars Year End Awards” podcast, PRI’s Communications Director Tim Anaya picked Assembly Bill 5 as the most underreported story of 2019 because of the impact the new law will have.

The California Trucking Association, independent journalists, and all those about to be impacted by the new law would probably agree with him. Trucking moves a tremendous amount of goods in this country.

According to the U.S. Department of Transportation estimates, trucks moved 62.7 percent of all freight in 2018. Truck freight use was up more than five percent from 2017, quadrupling the second-place freight mover, trains. By weight, trucks moved 71.4 percent of the nation’s freight in 2018.

In a Fortune op-ed, Tusk Ventures founder Bradley Tusk predicted the expansion of autonomous trucking will increase in 2020. Tusk compared the push for autonomous trucking with that of passenger vehicles saying, “Autonomous cars are a political hot button. Trucks are not.”

It’s evident that autonomous trucking is picking up speed. In December 2019, an autonomous truck completed a cross-country drive from California to Pennsylvania, delivering butter. The 41-hour trip was made possible by an autonomous driving system built by Plus.ai, a California-based artificial intelligence company. A safety driver was riding in the truck for the duration of the 2,800-mile trip.

Plus.ai is one of 65 companies who hold an autonomous vehicle testing permit in California and is competing with other companies like Xos Trucks and TuSimple who count UPS and the U.S. Postal Service as partners, respectively. In 2018, another company completed a cargo-less autonomous truck trip from Florida to California.

Self-driving truck programs will eventually threaten the careers of human drivers. In the meantime, Assembly Bill 5 has the capacity to put the brakes on trucking and take a lot of jobs with it.

Evan Harris is the media relations and outreach manager for PRI.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.