 An estimated 57 million U.S. workers participate in the gig economy. And over 1.5 million of these free agents pick up their assignments through the internet. While these workers enjoy the flexibility of being their own bosses, a fight is brewing over how to classify them. The gig economy is a term that emerged with app-based companies like Uber and Lyft and DoorDash. Erin Mulvaney covers labor and employment for Bloomberg Law. And the companies say they'd advise innovative business models that essentially connect customers to workers. The term gig first started popping up in the 1920s. Jazz musicians often used it to refer to a paid performance. The 1940s and 50s saw the rise of temporary staffing agencies. By the late 1990s, the internet connected people through sites like Craigslist and Upwork. Then startups began developing apps and websites like Mechanical Turk, Airbnb and TaskRabbit. But in 2010, the launch of one app in particular turned the gig economy upside down. That year, Uber accepted its first ride. While the online marketplace for connecting workers to gigs has thrived by creating new efficiencies, an issue still to be resolved is how they classify the workers that use them. An employee in the most traditional sense is somebody who is hired by a company and they get a salary and they get benefits and they work a nine to five job. So an independent contractor has complete flexibility. They set their own hours. They don't answer to a boss. They can take whatever clients or whatever jobs they want at any given time. It's about the only job I can do where I can be flexible with my time and my hours. And I love being an independent contractor. There are a lot of benefits to being an independent contractor. A lot of freedom and a lot of movement. But there is also a downside. Our country's social safety net system is based around the idea of an employee. And that means pretty much every kind of benefit, the right to minimum wage, overtime, healthcare guarantee, the right to file discrimination lawsuit, the right to form a union. All of those rights are guaranteed to employees and not guaranteed at all to an independent contractor. To ensure workers have access to benefits and to add to their own coffers, state and local governments want these companies that rely on gig economy workers to pay up. States can issue their own laws revolving around tests that determine these lines between who is an independent contractor versus who is an employee. One state leading the charge in changing how companies classify the gig workers using their apps is California. Assembly Bill 5 actually codified a 2018 California Supreme Court decision called Dynamics Operation West. And what the California Supreme Court did in 2018 was create a new test. And it's a rigid standard that lays out three specific criteria for a business to follow in order to label its workers as contractors. The A factor is that really is about control and how much control the employer has over the worker. The B standard says that the worker must perform work outside of the ordinary course of business of that business. The C part is also difficult for companies to overcome because it requires the worker to have its own entity and its own business self in order to be considered an independent contractor. The bill was largely successful in accomplishing its main goal of reclassifying ride share drivers as employees. The app-based companies have responded fiercely to AB 5 with a couple different tactics. The first is a ballot petition that would overturn AB 5. If this ballot initiative does not pass, my world will be turned upside down. And the companies like Uber and Lyft have funneled over $200 million into the cause. Uber and Postmates have also sued to say that the law should not be enforced against them. As the lawsuits pile up, many believe that our system needs a new classification for workers that accounts for new technologies and new ways of finding work. There have been proposals first by some academics and later adopted by gig economy companies that would create a third classification of worker. And that is something that has never been in the United States before. Many app-based companies struggle to turn a profit without gig workers on their payroll. That's one reason they support a system that makes benefits portable, staying with the worker, regardless of which app the worker used to find the work. Technology and the way people find work continues to evolve, still governed by laws created for an earlier era. These businesses are becoming so much more popular and more are being invented, more are coming along. And they really don't fit with the structure that we have in place.