If anyone thinks they’re seeing fewer trucks ripping up and down Interstate 5 or slogging through the perpetual 405 gridlock, it might not be their imagination. California law is strangling the freight-hauling business.
There has been “a wave of bankruptcies among California trucking companies,” reports Floor Covering News, a trade publication, partially the result of the economic decline of the freight shipping industry.
The wretched AB 5 that outlawed independent contracting, or gig work in California is also a major factor as many truck drivers are independent contractors.
Before AB 5 was enacted in 2019, there were more than 70,000 independent truckers in California. The law has inflicted severe harm on them ever since. Through the California Truckers Association, they filed the first court challenge before the law went into effect. CTA’s Chris Shimoda told FreightWaves then that “we’re really doing this because we believe the owner-operators have the right to continue their businesses and want to continue to be independent truckers. They don’t want to be forced to become company drivers.”
Shimoda noted that “at the core of the trucking industry of this fight” are the “80% of our drivers don’t have college educations.”
“The pathway for them to become entrepreneurs and to become part of the middle and upper-middle class that has been an opportunity is to own multiple trucks and become part of the American dream,” he said.
The U.S. Supreme Court declined to hear the CTA case, so six years later, we’re seeing that “wave of bankruptcies among California trucking companies.”
Even those outside the state have been affected by AB 5’s restrictions because they utilize California drivers.
Owner-operator Dee Sova, who drives for Prime Inc., is one refugee who had to leave California after “proudly” building her “career as an independent contractor in the trucking industry” over three decades.
“Being my own boss allowed me to raise my four daughters, support my family, and chart my own path forward as a business owner,” she wrote in an August guest commentary. “But in 2020, that livelihood was thrown into chaos by a law from Sacramento, California, lawmakers who ignored how real truckers work and threatened to put thousands of us out of business.”
Sova said “thousands of independent truckers” – women, veterans, immigrants, first-generation business owners – “across the country watched what happened in California with fear.” Their “ability to choose when and how” they work, “isn’t just a perk,” she added, “it’s a lifeline.”
Trucking company Bloom Services noted last year that there had been “a steady exodus” of class A truckers “leaving the state for other parts of the country.” AB 5 was singled out for its “significant impacts on the trucking industry in the state”, which trucking companies have argued “will lead to increased costs and reduced flexibility for independent contractors.”
Truckers, says Bloom, are uncomfortable feeling forced “to give up their independence and become employees of trucking companies, which could limit their ability to set their own schedules and choose their own loads.”
Same story, the one that’s been told many times since 2019 but clearly isn’t being heard in Sacramento.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.
