Gig drivers remain contractors
Lyft scored a major victory when California voters passed Proposition 22, allowing app-based companies to treat drivers as contractors instead of employees.
The outcome was viewed as a defeat by labor leaders who hoped to cement a California law which would have given drivers benefits such as overtime and sick days. Ride-hailing and delivery companies won an exception, arguing drivers enjoy flexibility as contractors and threatening to leave California if they had to pay a full slate of employee benefits. Instead they’ll offer limited benefits such as health care subsidies to drivers who clock 25 hours per week.
We talked with John Zimmer, president and co-founder of Lyft Inc., about the legislative goals of the company.
Lyft formed an alliance with a major competitor to get this done. Do you foresee teaming up with Uber again?
There are some opportunities to do so and there are some opportunities where it won’t work. This was not the company or industry pushing back on the law and saying no. This was saying, let’s find the right approach that had both independence and includes benefits.
How do you justify the level of spending on this proposition when ride-hailing is struggling to reach profitability?
It was important to do this because it’s right for drivers, riders and the economy, but also to create a model that is the turning point for the future of work in America.
In the tough times that we’re in, independent, flexible work is critical and a growing part of the U.S. economy. Many people find the gig economy as a safety net, especially during COVID-19. It was really important to show what we stand for, and this was about us standing for independence and benefits, not standing against something.
Some labor leaders call this a setback for working conditions for app-based workers.
I’ve had many conversations over the last two years with great leaders in labor. I respect them, I want to work with them, and we’re trying to stand for something, to stand for benefits and independence, and I believe there’s across the country more work we can do, and I hope we can find ways to work together.
Federal legislation has been introduced to treat drivers as employees. Will you fight that?
Having a model that we can point to that was broadly supported across Democrats, Republicans and independents, having that conversation federally so that we can answer this question and grow the economy... we would love to be part of that conversation.
Bringing people from all different viewpoints, working with both parties, working with labor, working with the industry, I really believe that this model is the key step forward and that there’s a lot of good we can do by working together.