Gig worker bill AB-5 passes in California

Assembly Bill 5, the gig worker bill opposed by the likes of Uber, Lyft and DoorDash, has passed in the California State Senate. This comes shortly after California Governor Gavin Newsom officially put his support behind AB 5 in an op-ed.

The bill needed 21 votes to pass in the State Senate. It passed in a 29 to 11 vote this evening.

The next step is for Governor Newsom to sign the bill into law, which he is expected to do. If he signs the bill, it will go into effect at the beginning of 2020.

“AB 5 is only the beginning,” Gig Workers Rising member and driver Edan Alva said in a statement. “I talk daily to other drivers who want a change but they are scared. They don’t want to lose their only source of income. But just because someone really needs to work does not mean that their rights as a worker should be stepped all over. That is why a union is critical. It simply won’t work without it.”

The bill, first introduced in December 2018, aims to codfiy the ruling established in Dynamex Operations West, Inc. v Superior Court of Los Angeles. In that case, the court applied the ABC test and decided Dynamex wrongfully classified its workers as independent contractors based on the presumption that “a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits…”

Those who work as 1099 contractors can set their own schedules, and decide when, where and how much they want to work. For employers, bringing on 1099 contractors means they can avoid paying payroll taxes, overtime pay, benefits and workers’ compensation.

According to the ABC test, in order for a hiring entity to legally classify a worker as an independent contractor, it must prove the worker is free from the control and direction of the hiring entity, performs work outside the scope of the entity’s business and is regularly engaged in an “independently established trade, occupation, or business of the same nature as the work performed.”

In short, AB-5, which has already passed in the California State Assembly, would ensure gig economy workers are entitled to minimum wage, workers’ compensation and other benefits.

Uber and Lyft, two of the main targets of this legislation, are adamantly against it. Last month, Uber, Lyft and DoorDash amped up their efforts to do whatever they can to prevent it from happening. That’s in part due to the fact that the companies cost of operating would increase.

Uber, Lyft and DoorDash each put $30 million toward funding a 2020 ballot initiative that would enable them to keep their drivers as independent contractors.

Assuming Gov. Newsom signs the bill, it will go into effect Jan. 1, 2020.

Vegetarian frozen food brand Strong Roots looks to expand in the US with $18.3 million funding

The U.K.-based vegetarian frozen food company Strong Roots has picked up $18.3 million in funding from the private equity firm Goode Partners as it looks to expand its U.S. presence and build out its technological capabilities.

Advised by global mid-market investment bank Alantra, Strong Roots has a presence in the U.S. in retailers, including Target, Wegmans and Whole Foods, and in the U.K. at Tesco, Asda, Sainsbury’s and Marks and Spencer.

Neither a direct to consumer company nor a novel technology developer, Strong Roots is hoping to use the new financing to expand its research and development efforts to provide more functional foods and nutrients, according to chief executive officer Samuel Dennigan.

The company is on track to move $50 million worth of frozen vegan food items in the calendar year, and it expects its sales to more than quadruple over the next four years.

The company’s exceptional growth comes at a time when consumers globally are looking for healthy options. Strong Roots offers a range of tasty plant-based food designed for busy lives. Found in your freezer aisle, the award-winning line includes premium root vegetables, veggie burgers and freezer favorites like Cauliflower Hash Browns.

The company has found a strong partner in Goode Partners, whose previous investments include AllSaints and La Colombe.

Dennigan’s career in agribusiness stretches back 15 years, but his family has long been in the food production and distribution business.

“I started working with some international brands in the late nineties and saw how CPG companies were doing things in a poor way,” says Dennigan. At first the company thought it would go after fresh foods, but saw more opportunity in the frozen food aisle.

Strong Roots began selling its frozen foods in 2015 just as the vegan and health food craze began to surge.

While the company has spent the past four years building up a brand as a vegan alternative in frozen foods, Dennigan is now ready to expand into other categories. “The pieces of IP that are going to be developed and placed in market in the next 12 months especially around the fortification of the products,” he says. “What our research is showing us is that there’s a huge opportunity between extruded and food and what we’re doing.”

Dennigan is, of course, referring to companies like Beyond Meat and Impossible Foods, which have built protein replacement businesses over the past 10 years and have surged into consumer consciousness with big deals at fast food chains (and no small amount of kerfuffles).

The success of those two companies has set up a feeding frenzy among investors who are voraciously scarfing up vegetarian food companies to add to their portfolios.