Uber, Lyft, DoorDash threaten ballot fight over gig-worker law
Assembly Bill 5 would classify drivers as employees, a change pushed for by labor unions
SAN FRANCISCO—The battle over a California bill that could upend the business models of companies that rely on gig workers intensified Thursday when ride-sharing giants Uber Technologies Inc. and Lyft Inc. and delivery service DoorDash Inc. threatened to spend a combined $90 million on a ballot measure if a deal can’t be reached this year.
California lawmakers have been weighing a bill, known as Assembly Bill 5, that would classify drivers for those and other similar companies as employees, entitled to better wages and benefits, a change pushed for aggressively by labor unions. The bill would codify a 2018 California Supreme Court decision that restricts when workers can be classified as independent contractors.
On Thursday, Lyft and Uber offered a set of proposals they described as a compromise: a minimum wage of $21 an hour for time spent driving and picking up customers, a fund to pay for benefits such as paid sick leave, and the ability for workers to organize a group that could negotiate with numerous employers of drivers all together, rather than individually.
“We remain focused on reaching a deal, and are confident about bringing this issue to the voters if necessary,” said Lyft spokeswoman Adrian Durbin.
DoorDash is supporting its own set of similar proposals.
If the current version of the legislation becomes law, and no other legislation addressing their concerns passes, the companies
said they would put their resources behind a measure on next year’s ballot featuring the proposals they are backing.
The bill passed the state assembly in May, 59-15, and faces a key vote in a Senate committee on Friday.
Both houses are dominated by Democrats.
Gov. Gavin Newsom, a Democrat, hasn’t signaled whether he would sign the current bill if it
passes. The governor has said his staff is actively trying to broker a deal between the opposing sides behind the scenes.
The threat to go to the ballot box—a common tactic in California when high-stakes legislation threatens major interest groups— was criticized by a federation of state unions and Assembly Bill 5’s lead backer.
“California has a long history of Wall Street billionaires pumping a
fortune into ballot measures to further erode the middle class,” said Assemblywoman Lorena Gonzalez, author of the measure.
“This announcement lays bare the real motivation of multibillion-dollar gig companies,” said California Labor Federation Executive-Secretary Treasurer Art Pulaski.
“They never cared about their drivers or workers. The only thing they care about is their bottom
line.”
The companies have said they believe their measures help drivers by keeping workers’ ability to start and stop working as they please.
While the measure would affect a variety of industries, the unprofitable ride-hailing companies would take a direct hit if the measure passes as currently written. Lyft and Uber together are currently losing billions per year.