Tech companies are at the center of a major shift in the relationship between workers, consumers, and businesses - and executives are reacting

California's AB5 law, which makes it significantly harder to classify workers as independent contractors, went into effect on January 1 and affects tens of thousands of gig, freelance, and contract workers across the state.

The law was originally targeted at sharing economy businesses like Uber, Lyft, and DoorDash that rely heavily on contractors, but already its impact is being felt in industries from trucking to media. Uber and delivery company Postmates have already sued to block the law.

New York also implemented a minimum wage in 2019 for ride-hailing drivers, which drove up prices for Uber and Lyft rides.

As employees take stronger stands against issues like workplace harassment, hiring bias, and pay discrimination, tech companies are paying much closer attention to how they manage their workforce.

"It impacts their cost, it impacts their ability to attract talent, and it really impacts in many cases how they build their business model," said Alison Kutler, leader of strategic policy advisers at PwC and a co-author of its policy trends report.

While healthcare has become a key issue in the presidential race, major legislation is unlikely to happen in the next year. But the tech industry isn't holding its breath.

"A lot of companies have come together to try to create almost a parallel health system to try to lower costs," Kutler said.

Amazon recently launched its own health clinics for employees, and along with other tech giants like Google and Microsoft, has ambitions to get into the healthcare business itself.

At the same time, companies are looking to provide employees — or at least certain ones — with extensive health benefits to gain an edge in recruiting.

"Healthcare and health benefits are something that's important right now as people are looking for jobs and there is definitely competition for talent," Kutler said.

Thanks to an endless onslaught of data breaches and privacy stumbles in recent years, consumers have grown concerned about how companies use their personal information.

In response, more governments have been enacting data privacy laws to give consumers better control over what information companies collect on them.

The EU's GDPR, which went into effect in 2019, has forced companies to spend millions on compliance efforts and already led to massive fines for violations. Companies have also been scrambling to update their privacy policies to comply with the California Consumer Privacy Act, which went into effect on January 1.

As other states follow California's lead, companies are attempting to get their message out proactively by putting "more people, more resources, and more focus on state level activity than they have previously," Kutler said.

But it's not all for show, according to Kutler. She believes companies can gain a business edge by doing things like creating simpler privacy policies and clearly communicating how they're using consumer data.

"Companies that do that better are going to be successful with regulators, consumers, all the way across the board with various stakeholders," Kutler said.