Newsom keeping distance in battle over gig workers
Time is running out for Gov. Gavin Newsom to take a stand on an issue that is splitting Sacramento and affects 1 in 10 California workers.
So far, at least publicly, Newsom hasn’t taken the lead on AB5, the state legislation that would turn Uber and Lyft drivers and other gig workers into company employees instead of independent contractors, with access to benefits such as health insurance and workers’ compensation. The Assembly has passed the measure, and if the state Senate does the same before this year’s session ends Sept. 13, it will land on Newsom’s desk.
Newsom has long wanted something “audacious” when it comes to addressing one of his
favorite subjects — the future of work. In his inaugural address, Newsom said that “it’s time to develop a new modern compact for California’s changing workforce.” He called for bringing together labor and tech to “come up with new ideas to expand worker opportunity without extinguishing innovation or flexibility.”
Newsom’s staffers have been involved in talks with labor and tech leaders over just who would be covered by AB5 — many companies’ business models are dependent on gig workers, and the list of industries hoping to be exempted from the state bill is long. But Newsom himself hasn’t had a high profile, and now those talks have reached a stalemate. On Thursday, 1,600 gig workers signed fullpage newspaper ads calling out the governor, pleading: “Will you help?”
Don’t count on it. When Newsom was asked in June on The Chronicle’s “It’s All Political” podcast about what his position was on AB5, he replied, “If my position was explicit, those conversations would end.”
It’s time for him to “convene stakeholders and reinvigorate a process that has stalled,” said Vikrum Aiyer, vice president of public policy for Postmates, an online delivery service in San Francisco. Aiyer has been involved in the talks on the side of companies with gig workers.
“It’s the perfect ballgame” for Newsom to umpire, Aiyer said. It is a rare moment when the leaders of rival tech companies — Uber and Lyft, Postmates and DoorDash — are cooperating at the negotiating table. It is an equally rare moment when unions are at that same table and at least talking about a different way to compensate workers and give them a voice in the workplace.
And it is most rare to have a governor who has the ear of both sides.
Tech and labor are two of Newsom’s favored constituencies. On one side are the disruptive tech leaders who appeal to his entrepreneurial business instincts and have supported his campaigns since he was San Francisco’s mayor. On the other is organized labor, which contributed millions to his campaign for governor.
Newsom himself often talks about finding “a third way” to address the core issue of their dispute: Who should be an employee?
“He’s uniquely positioned to establish proworker and proinnovation policies to guide the future of work in California and lead the country,” Aiyer said. But to do that, he has to bring labor and industry “together to look one another in the eye and try.”
Newsom insists that while he’s not out front on AB5, he is involved behind the scenes. “I had robust conversations for two hours yesterday and six hours the day before,” the governor said at an event Thursday in San Francisco, adding that the issue consumes much of the day for his chief of staff.
The challenge for Newsom is that labor in particular has little incentive to remain at the table. Unions are backed by a 2018 California Supreme Court decision in the Dynamex case that toughens standards for companies to contend workers are not employees. AB5, by Democratic Assemblywoman Lorena Gonzalez of San Diego, would codify those standards. For labor, that’s where the negotiations start.
“AB5 is the floor of what we’re talking about,” said Jim Araby, director of strategic campaigns for the United Food and Commercial Workers Local 5 and a participant in the talks.
It’s tech firms that have the most to lose here — and it’s the reason they’re still at the table. If they had to make their workers employees, their costs could go up 20% to 30% by some estimates.
So there’s not a lot of political incentive for Newsom to publicly jump into these talks and risk ticking off one of his constituencies. “I am not naive” about the possibility that the final bill would make everyone happy, he said Thursday.
This is complex and uncharted territory. So far, the rookie governor has a mixed record on taking the lead on big, complicated issues.
Newsom said addressing California’s housing crisis was one of his top priorities. He promised to build 3.5 million units of housing by 2025, which would be a far faster pace than the current slog.
His budget included a record $1 billion for homelessness and $1.75 billion to help spur housing production and planning through loans, tax credits and other incentives. But Newsom didn’t flex his muscle to help arguably the most audacious housing measure in Sacramento: SB50. The measure by San Francisco state Sen. Scott Wiener would have made it easier to build apartments and condominiums around public transit. The Senate shelved the bill until 2020.
“There are deep components of that (bill) I support, but a lot of folks in the Legislature don’t,” Newsom told The Chronicle’s editorial board in June. “There are certain things I can control, certain things I can’t.”
When he was pressed on housinglegislation progress, the governor said, “One session is not four years. It’s not eight years. I don’t think there’s ever been this much in energy in the housing space in a long time . ... I’m committed to the long haul.”
Newsom did flash leadership skills in pulling together complex legislation in July to shield California’s utilities from future wildfire costs while creating a $21 billion fund to compensate victims. And he’s made a career out of being on the leading edge of issues that others don’t touch. He was at the front of the parade on legalizing samesex marriage and recreational cannabis and on tightening guncontrol measures.
But on the gigworker issue, he runs the risk of falling behind the Democrats running for president — and losing his chance to lead a national conversation.
On Wednesday, Massachusetts Sen. Elizabeth Warren — no doubt with an eye on the March 3 California primary — wrote in a Sacramento Bee opinion piece that “this is a crucial moment in the fight for workers in this country. It’s a time for us to show whose side we’re on. All Democrats need to stand up and say, without hedging, that we support AB5 and back full employee status for gig workers.” Vermont Sen. Bernie Sanders has taken a similar position.
It’s unlikely that Newsom will say that. Or that he’ll say he opposes AB5. But some are waiting for him to spell out that third way that he’s been searching for. San Francisco Chronicle staff writer John Wildermuth contributed to this
report. Joe Garofoli is The San Francisco Chronicle’s senior political writer. Email: jgarofoli@sfchronicle.com Twitter: @joegarofoli