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I'm in finished vehicle logistics, and I've worked directly with a wide variety of truckers, including three years in California. You are very right that the am

I'm in finished vehicle logistics, and I've worked directly with a wide variety of truckers, including three years in California. You are very right that the amount of cargo that needs to be moved will not change because of this law, but you are, in my opinion, wrong about everything else. I don't want to stereotype truckers because it is a diverse group. But I will say that in my anecdotal experience, this is a job that tends to attract people who want to be left alone. These are people who value freedom and hard work above everything else and many of them will change careers or retire if they are forced to work for big corporations. The average trucker is 55 years old, and many of them will just sell their and retire if AB5 is not overturned. Supplying a $150,000 truck is not at all a barrier to entry. There is a major shortage of truckers and employers are offering free training, big sign on bonuses, and high starting pay to attract talent. Walmart, which is certainly not known for paying its employees well, pays truckers an average of almost $88,000 per year--and Walmart supplies the truck. The people spending $150,000 on a truck are doing it because they want to, not because they have to. This is not a medallion situation. As for your "wink wink" comment, ELD's have been mandated since the end of 2017, and even companies that are small enough to not legally be compelled to use one are often forced to comply due to customer contracts. (Shippers want the data the ELD provides to offer better ETAs to their customers.) In my opinion, the most likely outcome of this law is that some truckers retire and sell their rigs to big corporations, some decide to work for big corporations, and prices go up for everyone who ships goods or buys shipped goods. Unless you're in asset based trucking and looking to expand, the chances are that AB5 is going to hurt you, not help you.

trianglem 7y ago
Everything you said makes sense except for the part where prices go up. Why would prices go up?
- ska 7y ago
  Net drop of supply (truckers) I think was the reasoning.
- MaulingMonkey 7y ago
  Less supply of able and willing truck drivers at their current level of compensation means companies will have to increase said compensation to try and keep or attract truck drivers to avoid decreasing capacity. Increased driver compensation means increased costs for the company employing said drivers, which in turn means passing on the costs to whomever wants things shipped. Econ 101 supply and demand curves.
  - wahern 7y ago
    Why would there be less supply? Because the drivers won't have the burden of payroll taxes or workers compensation? Costs may go up, but they could very well go down--economies of scale in accounting, payroll, etc. Even if they go up, the real question is by how much, and the portion that would be passed on to customers; depending on elasticities of the supply and demand curves, some of it might be borne by the trucking companies themselves. And then there's the elephant in the room: the presumption that the ABC test would necessarily rope in all independent truckers and completely destroy the business model. There's an outside chance that some segment of "independent" truckers--the kind driving the narrative--with multiple, varied customers and schedules of their choosing will remain as independent contractors, especially if they travel interstate. More likely they'll have significant latitude in being able to incorporate themselves, so long as their business entity rigorously handles payroll taxes, insurance, etc. Because those things are trivial to automate--and I'd bet there's at least one startup founder on HN providing and bundling these services--the impact might prove minimal in the long haul. Independent contractors are supposed to be managing these things by themselves, anyhow; otherwise we're simply defending scofflaws. The new test for independent contractors may turn out to be a bad idea, but it's not so obviously bad on its surface that we can make sweeping claims irrespective of context. Remember, UPS has more revenue and better profits than FedEx, even though UPS relies on unionized, employee truckers while FedEx flounders with their independent contractor model. And the new test originated in court in response to legitimate concerns with the ride-sharing model. If it makes sense there, maybe it's worthwhile to keep an open mind about its salience in the trucking industry. Is independent trucking dead in Massachusetts; did trucking costs rise? Massachusetts has had a similar test since the 1990s and an identical test since 2004. I can't find hard data, just a few court cases (suggesting litigation might be minimal) and hyperbolic reporting by industry, bereft of revenue numbers.
bsder 7y ago
> In my opinion, the most likely outcome of this law is that some truckers retire and sell their rigs to big corporations, some decide to work for big corporations, and prices go up for everyone who ships goods or buys shipped goods. Unless you're in asset based trucking and looking to expand, the chances are that AB5 is going to hurt you, not help you. So why won't the logistics companies simply swing this to: "A load is a starting point X. The destination is ending point Y at time Z. Bid for it." The problem is that everybody wants to control the hours, control the price, etc. rather than letting people actually bid for things and control the variables themselves. And, to be fair, if you want to impose control on the employee variables, well, that's not really a contractor now is it? To be fair, I would much rather see a law along the lines of "for every 40 hours of contract work--you have to supply the equivalent benefits (healthcare/retirement/vacation) as one full time employee or get fined the equivalent amount of money." That way, the whole "We'll subcontract it because it's cheaper" actually gets whacked for being cheaper for fobbing off the externalities but not if cheaper is simply that subcontractors are more efficient."
- ropman76 7y ago
  They already do. Many logistics companies have a "brokerage" area where try and get trucking companies (or truckers) to bid on loads going from x to y. I used to support software that did this. Not a fan of the software, but the people where blast to work with. In the area I worked with, it could get pretty crazy (lots of yelling across the room and the yelling at people on the phone LOL). They occasionally had less than ethical truckers holding loads hostage for more money....
a3n 7y ago
Well said. I would add, "setting their on schedule" likely refers to independents choosing which loads to take and where.
BurningFrog 7y ago
Note that if trucking prices do go up, the amount of cargo that gets moved will go down.
- fzeroracer 7y ago
  No, not necessarily. Correlation is not causation and what not. If trucking prices go up, companies might opt to move more cargo at the same time (same amount of moved cargo, but less trucks on the road) or they might simply eat the loss (if they're already making massive profits) or any number of alternatives. If we were to take your argument into absurdity, the best thing to do would be to reduce trucking prices to $0, because then we would fundamentally move a lot more cargo, which would drive down prices across all of the US benefiting a lot more than just the small minority of truckers. It's an overly simplistic way of looking at things that reminds me of the assumption that raising the minimum wage would cause the prices on everything to hike up by the same amount.
  - badtux 7y ago
    The Fortune 500 made $1.1 trillion in corporate profits last year. The notion that they'll buy less stuff because shipping now costs $5 extra is ludicrous. Their problem is what to do with all that surplus cash now that they've bought down short-term Treasuries to basically 0% interest, a 1-3% increase in shipping costs wouldn't even appear on their "OMG!" radar.
  - stickfigure 7y ago
    absurdity, the best thing to do would be to reduce trucking prices to $0 What is absurd about that? If we could wave a magic wand and reduce the real transportation cost of goods to 0, it would have massive beneficial effects in the overall economy. In large part we're seeing the benefit of that in the macro due to the (formerly) falling cost of global shipping. It's magical thinking that an increase in the cost of transport won't have some sort of negative effect on the economy.
    - fzeroracer 7y ago
mistrial9 7y ago
a bicycle ride in the Port of Oakland seeing idling trucks, shows many hundred very sketchy "contractor" truckers who I doubt have seen the kind of large, steady number of dollars you are quickly citing there.. the condition of their vehicle, their health, their English language skills and other superficial indicators would be the evidence
- refurb 7y ago
  I think your “superficial” qualifier is key - none of them are proof the trucker isn’t making good money.
nradov 7y ago
There is no "shortage" of truckers. Never has been and never will be. New truckers can be trained in a few months. Customers and employers just don't want to pay. Claiming that there is a shortage of workers in a particular field is generally nonsense. Is there a shortage of gold? No, I can buy as much as I want tomorrow ... at the market price.
- mycall 7y ago
  https://www.forbes.com/sites/stevebanker/2019/09/11/the-driver-shortage-is-fake-news https://www.forbes.com/sites/stevebanker/2019/09/11/the-driv...
- jjeaff 7y ago
  There is such a thing as elastic demand. If you can't find people to pick strawberries without paying $150 an hour, you are probably going to go out of business. That is usually considered a labor shortage.

trianglem 7y ago

Everything you said makes sense except for the part where prices go up. Why would prices go up?

ska 7y ago
Net drop of supply (truckers) I think was the reasoning.
MaulingMonkey 7y ago
Less supply of able and willing truck drivers at their current level of compensation means companies will have to increase said compensation to try and keep or attract truck drivers to avoid decreasing capacity. Increased driver compensation means increased costs for the company employing said drivers, which in turn means passing on the costs to whomever wants things shipped. Econ 101 supply and demand curves.
- wahern 7y ago
  Why would there be less supply? Because the drivers won't have the burden of payroll taxes or workers compensation? Costs may go up, but they could very well go down--economies of scale in accounting, payroll, etc. Even if they go up, the real question is by how much, and the portion that would be passed on to customers; depending on elasticities of the supply and demand curves, some of it might be borne by the trucking companies themselves. And then there's the elephant in the room: the presumption that the ABC test would necessarily rope in all independent truckers and completely destroy the business model. There's an outside chance that some segment of "independent" truckers--the kind driving the narrative--with multiple, varied customers and schedules of their choosing will remain as independent contractors, especially if they travel interstate. More likely they'll have significant latitude in being able to incorporate themselves, so long as their business entity rigorously handles payroll taxes, insurance, etc. Because those things are trivial to automate--and I'd bet there's at least one startup founder on HN providing and bundling these services--the impact might prove minimal in the long haul. Independent contractors are supposed to be managing these things by themselves, anyhow; otherwise we're simply defending scofflaws. The new test for independent contractors may turn out to be a bad idea, but it's not so obviously bad on its surface that we can make sweeping claims irrespective of context. Remember, UPS has more revenue and better profits than FedEx, even though UPS relies on unionized, employee truckers while FedEx flounders with their independent contractor model. And the new test originated in court in response to legitimate concerns with the ride-sharing model. If it makes sense there, maybe it's worthwhile to keep an open mind about its salience in the trucking industry. Is independent trucking dead in Massachusetts; did trucking costs rise? Massachusetts has had a similar test since the 1990s and an identical test since 2004. I can't find hard data, just a few court cases (suggesting litigation might be minimal) and hyperbolic reporting by industry, bereft of revenue numbers.

bsder 7y ago

> In my opinion, the most likely outcome of this law is that some truckers retire and sell their rigs to big corporations, some decide to work for big corporations, and prices go up for everyone who ships goods or buys shipped goods. Unless you're in asset based trucking and looking to expand, the chances are that AB5 is going to hurt you, not help you. So why won't the logistics companies simply swing this to: "A load is a starting point X. The destination is ending point Y at time Z. Bid for it." The problem is that everybody wants to control the hours, control the price, etc. rather than letting people actually bid for things and control the variables themselves. And, to be fair, if you want to impose control on the employee variables, well, that's not really a contractor now is it? To be fair, I would much rather see a law along the lines of "for every 40 hours of contract work--you have to supply the equivalent benefits (healthcare/retirement/vacation) as one full time employee or get fined the equivalent amount of money." That way, the whole "We'll subcontract it because it's cheaper" actually gets whacked for being cheaper for fobbing off the externalities but not if cheaper is simply that subcontractors are more efficient."

ropman76 7y ago
They already do. Many logistics companies have a "brokerage" area where try and get trucking companies (or truckers) to bid on loads going from x to y. I used to support software that did this. Not a fan of the software, but the people where blast to work with. In the area I worked with, it could get pretty crazy (lots of yelling across the room and the yelling at people on the phone LOL). They occasionally had less than ethical truckers holding loads hostage for more money....

a3n 7y ago

Well said. I would add, "setting their on schedule" likely refers to independents choosing which loads to take and where.

BurningFrog 7y ago

Note that if trucking prices do go up, the amount of cargo that gets moved will go down.

fzeroracer 7y ago
No, not necessarily. Correlation is not causation and what not. If trucking prices go up, companies might opt to move more cargo at the same time (same amount of moved cargo, but less trucks on the road) or they might simply eat the loss (if they're already making massive profits) or any number of alternatives. If we were to take your argument into absurdity, the best thing to do would be to reduce trucking prices to $0, because then we would fundamentally move a lot more cargo, which would drive down prices across all of the US benefiting a lot more than just the small minority of truckers. It's an overly simplistic way of looking at things that reminds me of the assumption that raising the minimum wage would cause the prices on everything to hike up by the same amount.
- badtux 7y ago
  The Fortune 500 made $1.1 trillion in corporate profits last year. The notion that they'll buy less stuff because shipping now costs $5 extra is ludicrous. Their problem is what to do with all that surplus cash now that they've bought down short-term Treasuries to basically 0% interest, a 1-3% increase in shipping costs wouldn't even appear on their "OMG!" radar.
- stickfigure 7y ago
  absurdity, the best thing to do would be to reduce trucking prices to $0 What is absurd about that? If we could wave a magic wand and reduce the real transportation cost of goods to 0, it would have massive beneficial effects in the overall economy. In large part we're seeing the benefit of that in the macro due to the (formerly) falling cost of global shipping. It's magical thinking that an increase in the cost of transport won't have some sort of negative effect on the economy.
  - fzeroracer 7y ago

mistrial9 7y ago

a bicycle ride in the Port of Oakland seeing idling trucks, shows many hundred very sketchy "contractor" truckers who I doubt have seen the kind of large, steady number of dollars you are quickly citing there.. the condition of their vehicle, their health, their English language skills and other superficial indicators would be the evidence

refurb 7y ago
I think your “superficial” qualifier is key - none of them are proof the trucker isn’t making good money.

nradov 7y ago

There is no "shortage" of truckers. Never has been and never will be. New truckers can be trained in a few months. Customers and employers just don't want to pay. Claiming that there is a shortage of workers in a particular field is generally nonsense. Is there a shortage of gold? No, I can buy as much as I want tomorrow ... at the market price.

mycall 7y ago
https://www.forbes.com/sites/stevebanker/2019/09/11/the-driver-shortage-is-fake-news https://www.forbes.com/sites/stevebanker/2019/09/11/the-driv...
jjeaff 7y ago
There is such a thing as elastic demand. If you can't find people to pick strawberries without paying $150 an hour, you are probably going to go out of business. That is usually considered a labor shortage.