I Don’t Know, I Just Work Here

Cal­i­for­nia moves to give Uber driv­ers a hand “Driv­ers are bet­ter off un­der what we’re propos­ing”

Bloomberg Businessweek (Europe) - - POLITICS / POLICY - The bot­tom line Cal­i­for­nia is de­bat­ing a law that would let Uber driv­ers union­ize, but that hasn’t set­tled ar­gu­ments about how to treat gig work­ers.

Cal­i­for­nia, home to the head­quar­ters of Uber and a sig­nif­i­cant chunk of the com­pany’s U.S. busi­ness, was the first state to is­sue reg­u­la­tions cov­er­ing the ride-hail­ing gi­ant, in 2013. It’s once again at the fore­front of the de­bate about how to man­age Uber— specif­i­cally, what its obli­ga­tions to its driv­ers should be. Uber says its more than 400,000 driv­ers—“part­ners” in its lingo—are in­de­pen­dent con­trac­tors who work for them­selves. In June a state Un­em­ploy­ment In­surance Ap­peals Board judge de­ter­mined that a for­mer Uber driver should be treated as an em­ployee. In Septem­ber a fed­eral judge in San Fran­cisco granted class-ac­tion sta­tus to Uber driv­ers who con­tend they’re re­ally em­ploy­ees and should be re­im­bursed for gas and other ex­penses.

Cal­i­for­nia’s Demo­crat-led assem­bly is con­sid­er­ing what would be the first statewide law to give Uber driv­ers the right to cre­ate a union­like sys­tem for in­de­pen­dent con­trac­tors, fol­low­ing the pas­sage of a sim­i­lar ci­ty­wide or­di­nance in Seat­tle late last year. “This bill en­sures that the mil­lions of Cal­i­for­ni­ans who aren’t treated as em­ploy­ees, in­clud­ing work­ers in the evolv­ing gig econ­omy, sim­ply have the op­tion to or­ga­nize,” As­sem­bly­woman Lorena Gon­za­lez, a San Diego Demo­crat who spon­sored the bill, said in a March state­ment.

Uber has stead­fastly main­tained that its app is just a means for match­ing driv­ers with riders. “Nearly 90 per­cent of driv­ers say the main rea­son they use Uber is be­cause they love be­ing their own boss,” Uber said in a state­ment. Last year the com­pany suc­cess­fully ap­pealed a rul­ing by Florida’s De­part­ment of Eco­nomic Op­por­tu­nity that an ex-driver should be treated as an em­ployee.

Not all worker ad­vo­cates are on board with the Cal­i­for­nia pro­posal. Some say Uber driv­ers should be treated like reg­u­lar em­ploy­ees and ac­corded rights like ac­cess to un­em­ploy­ment ben­e­fits and min­i­mum-wage pay. Oth­ers ar­gue that work­ers in the app-en­abled shar­ing econ­omy are un­like ei­ther tra­di­tional em­ploy­ees or con­trac­tors and shouldn’t be wedged into ex­ist­ing le­gal cat­e­gories. In De­cem­ber two for­mer Obama ad­min­is­tra­tion of­fi­cials pro­posed cre­at­ing a le­gal def­i­ni­tion for so-called in­de­pen­dent work­ers, who have more au­ton­omy than em­ploy­ees but less than in­de­pen­dent con­trac­tors. “The cur­rent set of la­bor laws and em­ploy­ment laws are ob­so­lete for this emerg­ing sec­tor,” says for­mer Coun­cil of Eco­nomic Ad­vis­ers Chair­man Alan Krueger, who put for­ward the pro­posal in a pa­per for the Brook­ings In­sti­tu­tion with for­mer act­ing Sec­re­tary of La­bor Seth Har­ris.

Un­der Krueger and Har­ris’s pro­posal, in­de­pen­dent work­ers would be granted some of the ben­e­fits ac­corded to reg­u­lar em­ploy­ees, in­clud­ing pay­roll tax con­tri­bu­tions from their em­ploy­ers. But the des­ig­na­tion would ex­clude some guar­an­tees, such as a min­i­mum wage and over­time pay, be­cause Uber driv­ers or peo­ple who de­liver gro­ceries for In­stacart have con­trol over their time that shift work­ers don’t. “There’s no ques­tion the driv­ers are bet­ter off un­der what we’re propos­ing,” Krueger says.

Cre­at­ing a new worker cat­e­gory would re­quire fed­eral ac­tion, which isn’t likely un­der the Repub­li­can­con­trolled Congress. Courts and fed­eral law­mak­ers have long wran­gled over which work­ers qual­ify for which la­bor law pro­tec­tions. In 1947, af­ter the U.S. Supreme Court up­held a rul­ing re­quir­ing Hearst Publi­ca­tions to ne­go­ti­ate pay and ben­e­fits with the news­boys who de­liv­ered its pa­pers, Congress amended the Na­tional La­bor Re­la­tions Act to ex­clude in­de­pen­dent con­trac­tors, like the news­boys, from cov­er­age. Un­der cur­rent law, courts as­sess who’s an em­ployee or a con­trac­tor based on a se­ries of ques­tions, in­clud­ing who pro­vides the tools, whether the work is in­te­gral to the com­pany’s busi­ness, and how much con­trol the boss ex­erts over a worker’s time and ac­tiv­i­ties.

The Seat­tle city or­di­nance still treats driv­ers as con­trac­tors but of­fers them the right to choose an or­ga­ni­za­tion to rep­re­sent them for the pur­pose of win­ning bet­ter pay and treat­ment from com­pa­nies like Uber. The com­pany will be re­quired to rec­og­nize such a driv­ers as­so­ci­a­tion, even though fed­eral la­bor law doesn’t re­quire that. “A lot of driv­ers don’t nec­es­sar­ily want to be an em­ployee,” says Seat­tle Coun­cilmem­ber Mike O’Brien, who cham­pi­oned the city’s ap­proach. “They like the flex­i­bil­ity, but they say, ‘I just have no say in what’s go­ing on.’” The law pro­posed in Cal­i­for­nia ex­pands the model to in­clude all shar­ing-econ­omy work­ers.

Seat­tle’s fix, which was backed by Team­sters who’ve been try­ing to union­ize Uber driv­ers, is be­ing chal­lenged by the U.S. Cham­ber of Com­merce. In March it sued in fed­eral court, claim­ing that driv­ers would vi­o­late an­titrust laws if they teamed up to ne­go­ti­ate rates with Uber. The city is fight­ing the suit. The Cal­i­for­nia Cham­ber of Com­merce has put the leg­is­la­tion pend­ing there on its an­nual list of “job killer bills.”

Some worker ad­vo­cates say com­pro­mises that clas­sify driv­ers as any­thing other than em­ploy­ees fall short of treat­ing work­ers fairly. “It serves the Uber busi­ness model,” says Bhairavi Desai, ex­ec­u­tive di­rec­tor of the New York Taxi Work­ers Al­liance, which sup­ports class­ing driv­ers as em­ploy­ees. Wilma Lieb­man, who chaired the Na­tional La­bor Re­la­tions Board in Obama’s first term, says, “There are very strong ar­gu­ments you can make that Uber driv­ers are em­ploy­ees, given the na­ture of the con­trol Uber has.” Half­way cat­e­gories such as the one Har­ris and Krueger

“The cur­rent set of la­bor laws and em­ploy­ment laws are ob­so­lete for this emerg­ing sec­tor.” For­mer Coun­cil of Eco­nomic Ad­vis­ers Chair­man Alan Krueger

are propos­ing, she says, “might re­sult in fur­ther ero­sion rather than fur­ther pro­tec­tion of stan­dards.”

Uber’s chief ri­val, Lyft, has shown some will­ing­ness to com­pro­mise. In Novem­ber, Lyft’s co-founders joined Seat­tle la­bor leader David Rolf in re­leas­ing a state­ment back­ing the ex­ten­sion of ben­e­fits like in­jury com­pen­sa­tion to in­de­pen­dent work­ers—a fea­ture of the Har­ris-Krueger pro­posal but not of the union­iza­tion mea­sure be­ing con­sid­ered in Cal­i­for­nia. Har­ris says he’s con­fi­dent oth­ers will come around to his view: “Both sides have to lose some, and they have to re­al­ize that com­ing to­gether in a grand com­pro­mise is the bet­ter path to pro­tect­ing their in­ter­ests than try­ing to beat the other over the head.”

Karen Weise and Josh Eidel­son

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