Prices may rise while availability drops for rideshare companies like Uber and Lyft in California. Assembly Bill 5 will take effect in January, moving nearly two million people from independent contractor to employee status. Uber and Lyft drivers are considered independent contractors, meaning they can be taxed by the company. The switch to employee status will not allow rideshare companies to tax their drivers, increasing labor costs by up to 30%. Uber and Lyft drivers are pushing for the new bill to be passed, while the companies themselves are preparing to file a ballot to exempt them from this new law.