Uber and Lyft’s Gig Work Law Could Expand Beyond California

The companies are backing proposals in other states that would give workers the ability to form unions—but still consider them contractors, not employees.

In November, gig companies including Uber, Lyft, DoorDash, and Instacart helped pass California’s Proposition 22, effectively writing their own labor law. Now the companies plan to bring similar legislation elsewhere.

Last month, the companies launched a group called the App-Based Work Alliance to support their agenda. Industry-supported bills in the works in New York state and Illinois would, like the California ballot measure, deny gig workers status as employees, and the workers’ compensation, paid family leave, sick pay, unemployment insurance, and minimum wage guarantees that come with it.

But the bills could give gig workers the right to form something resembling a union, allowing workers to bargain with multiple employers to create wage floors and standards. US workers in trucking, auto manufacturing, and grocery stores have participated in types of industry-wide bargaining, though the arrangement is more common in Europe.

The scheme—first floated in California in 2019—has divided labor advocates. Some labor allies say that allowing gig workers to unionize would give them a much-needed seat at the table, in an industry where work and wages are dictated by algorithm and where access to the “bosses”—the companies that pay their wages—is hard to come by. Gaining the right to collectively bargain, these people say, is a vital first step in making the low-wage, high-turnover job more fair.

Others say that allowing gig companies to continue to treat their workers as independent contractors is a mistake. Legislation giving workers the right to a union without employment status would effectively be a government rubber stamp to gig companies’ business models, “in which the most low-income workers don’t have access to basic safety net benefits,” says Veena Dubal, a professor of labor law at the University of California, Hastings College of the Law.

Some California drivers are warning others of the downsides of a compromise with gig companies. “We’re absolutely against anything that puts us in a second-class worker status,” says Nicole Moore, a ride-hail driver and organizer with California-based Rideshare Drivers United, a workers’ advocacy group. “That’s why we say employment rights are nonnegotiable.”

The California ballot measure, called Proposition 22, was written by gig companies, who then poured $205 million into supporting it, the most expensive campaign in the state’s history. It reverses a 2019 law known as AB 5, which clarified the status of independent contractors in the state. Now, gig companies don’t have to pay into state unemployment insurance for their workers, and don’t need to provide benefits like health care. Instead, for California workers who qualify by driving or delivering for a certain number of hours a week, the companies say they will provide a health care subsidy and guarantee a minimum wage for the hours spent driving to or picking up riders (but not for the hours spent waiting for a fare).

Proposition 22 is near-irreversible—the law needs a “supermajority” of seven-eighths of the state’s legislature to be changed.

At the same time, gig companies invested in bringing the Proposition 22 fight elsewhere. Lyft stood up a political action committee called Illinoisans for Independent Work that spent at least $660,000 on ad buys and political contributions in local elections. In August, Uber released a white paper laying out its plans for “Independent Contractor+,” a new employment category it hopes to promote across the country.

Now New York, a less-than-traditional gig market in many ways, is set to be among the first states where a post-Proposition 22 battle might play out. A constellation of gig companies and allies on Monday introduced the New York Coalition for Independent Work, which describes its mission as “protecting self-employed, app-based contractors’ independence and flexibility while also working to provide them with needed benefits.” But the state’s relatively labor-friendly climate means that gig companies will have to tread carefully—and that a pitched battle is likely ahead.

In New York City, drivers for Uber and Lyft need special licenses, meaning drivers there are more likely to be professionals and work full-time in ride-hail. The city’s Taxi and Limousine Commission has used decades-old regulations to improve workers’ lot. Ride-hail drivers in New York City are guaranteed a minimum wage, of $17.22 per hour. The city has also capped the number of ride-hail vehicles on its streets, on the grounds that flooding the area with ride-hail cars drives down wages for workers and creates terrible traffic. In July, a federal judge ruled that Uber and Lyft must pay into the state’s unemployment insurance program.

Local drivers and advocates say they’re due more protections and benefits. Even the Independent Drivers Guild, a nonprofit workers’ advocacy group founded in 2016 with financial support from Uber, says it’s looking for a more effective way to push the gig companies to make pro-driver changes. IDG has called for legislation giving local drivers the right to bargain as an important first step. “Passing legislation [giving drivers] the right to bargain would allow drivers to negotiate benefits and working conditions directly with the companies,” says Brendan Sexton, the guild’s executive director.

IDG is affiliated with the Machinists Union and represents some 200,000 drivers across New York, New Jersey, and Connecticut, and it has pushed ride-hail companies to make some driver-friendly changes, like allowing in-app tipping and creating an appeals panel for drivers who have been booted off one of the platforms. The group also offers its members some benefits, like telemedicine and counseling. But Sexton says the IDG still has plenty on its agenda. “We need to make sure workers have unemployment insurance, workers’ compensation, a livable wage,” he says.

Other driver advocates are looking to the federal government and Congress for help. President-elect Joe Biden has said that he supports gig workers and AB 5, though a number of people who once worked at the gig companies are participating in his transition. A national labor panel supportive of gig workers could grant them the right to organize even without state legislation.

In statements, spokespeople for Uber, Instacart, and DoorDash said the companies would work with legislators to protect flexible work schedules for their gig workers, something they have said would be impossible if they were forced to treat the workers as employees. DoorDash vice president of communications and policy Liz Jarvis-Shean said the company wants to work with state and federal lawmakers “to help create a new portable, proportional, and flexible framework that embraces today’s modern workforce.” Uber spokesperson Matthew Wing said the company supports state laws to require “all gig economy companies—including ours—to provide new benefits and protections to all independent workers.”

Back in California, drivers say plenty of organizing can happen without official bargaining rights or recognition from the gig companies. Moore, the Rideshare Drivers United organizer, says her organization is now focused on recouping unemployment insurance for drivers for the months before Proposition 22 went into effect, when, she says, drivers legally should have been treated as employees. “We’re not going away,” she says.

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