DoorDash CEO Tony Xu said a new California law will have "disastrous results" for the "gig economy."
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The law, known as Assembly Bill 5 or AB5, reclassifies independent contractors as employees in order to get them better pay and more benefits. It's slated to take effect in January.
"It would have disastrous results if it's implemented because it's trying to impose an imperfect solution into a very big problem," Xu said during the WSJ Tech Live conference in Laguna Beach, California. "The net impact of AB5 would be a lot of lost economic opportunity and income for the state of California."
Xu said the law will mean restaurants will lose money and increase prices. DoorDash drivers, he said, aren't actually looking to relinquish their independent contractor designation because it gives them more flexible hours.
The company intends to band together with other companies that depend on "gig workers" -- such as ride-sharing giants Uber and Lyft -- on a $90 million ballot measure that would force these companies to give more benefits to their drivers without calling them "employees."