Nearly 100 owner-operators protested in downtown Los Angeles on Thursday after receiving letters in late May stating the city was ending their contracts for its As-Needed Haul Truck Program, citing the independent contractor law AB5.
Assembly Bill 5 — which requires companies to use a three-pronged ABC test to determine whether a driver is an employee or independent contractor — continues to face legal challenges after the U.S. Supreme Court denied a petition from the California Trucking Association to hear the case in June 2022.
Victor Vasquez Sr. is one of the independent truckers who protested the decision by the city’s Department of Public Works to end its 130-year-old program to haul paving and resurfacing materials. He said the move by the city will have a devastating impact.
“We have some families that have five generations of truckers who participate in this program,” Vasquez told FreightWaves. “Many of us spent thousands of dollars to upgrade our equipment to make sure we complied with the new regulations that took effect in January.”
The extensive list of requirements to participate in the city’s hauling program, which consists of more than 87% of minority-owned owner-operators and receives millions of dollars in federal funding, was removed from the city’s website early Thursday.
Vasquez, who serves as the president of the Los Angeles City Contract Truck Association and as a board member of the Western States Trucking Association (WSTA), said many independent truckers now have steep truck payments to comply with the California Air Resources Board (CARB) Truck and Bus rule that required them to include 2010 model year or newer diesel engines by the end of last year.
While this was a one-day protest, Vasquez said his group plans to meet again soon to decide its next steps.
“I have a 2020 truck and pay $3,000 per month, while some have 2023 trucks and are paying up to $5,300 per month,” Vasquez said. “We complied and considered this an investment because, after 132 years, how could they possibly get rid of us? But that’s what they intend to do.”
In a letter to owner-operators, which was reviewed by FreightWaves, Keith Mozee, executive director and general manager of the Bureau of Street Services, known as StreetsLA, said the California Department of Industrial Relations “has indicated that the new ABC test applies to public entities such as the city.”
Mozee invited the owner-operators to participate in the City of Los Angeles Department of Public Works Career Fair on June 29, the letter states.
In a statement, the city’s Department of Public Works said it cares “very much about the livelihoods of our partners and have been working aggressively at the direction of the Mayor [Karen Bass] to ensure that our 93 contract truck drivers are given the opportunity for city employment and that operations continue seamlessly.”
Joe Rajkovacz, WSTA director of governmental affairs, said there is no mention of what happens to the equipment the owner-operators purchased to comply with the city’s hauling program and CARB.
“Is the city going to satisfy their mortgages on the trucks and trailers they own? No. City employment is virtually a nonstarter for these owner-ops because it means bankruptcy,” Rajkovacz said. Given market conditions, “many would take a bath financially if they tried to sell” their used trucks.
He said the city would pass all three prongs of the ABC test if they had told “owner-operators to incorporate and become employees of their company if there was really a concern.”
Some participants said they may become homeless if the city proceeds with the move to end the contract hauling program because they used their homes as collateral to finance newer equipment to meet the city’s requirements and CARB regulations.
Even if they are offered employment with the city, Vasquez said it won’t be enough to cover their equipment payments.
Vasquez said since Southern California sustained record-level flooding this year, the services the hauling program provides are badly needed.
“The city’s streets are in bad shape with potholes everywhere, and we know the routes and know what is needed,” he said. “Many of us have worked around the clock to be available when needed, and this is how we are repaid. If we had known the city planned to cut ties with us, many of us would not have gone out and purchased these newer trucks when our old trucks were paid off.”
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