San Francisco Chronicle - (Sunday)
Ensuring voice, ‘earnings floor’ for Uber drivers
Tony West, Uber general counsel, was the first person that Dara Khosrowshahi hired in fall 2017 after he became CEO of the ridehailing company as it struggled to recover from a string of scandals and prepare for an initial public offering.
As legislators in Sacramento focus on a pending bill, AB5, that could turn Uber and Lyft drivers, along with many other independent contractors, into employees, West is heavily involved in negotiations seeking an
alternative for gigeconomy companies.
This interview has been edited for length and clarity.
Q: Is AB5 the biggest threat that exists for Uber — bigger than Didi Chuxing? Bigger than not making money? Bigger than the Travis Kalanickera scandals?
A: (Laughs) No, it’s not. I’ve been here almost 19 months. When I started, we had a lot on our plate. We were facing a lawsuit with Waymo. My first day we announced a data breach from 2016. We had a number of investigations going on. We had a culture in need of serious repair. We’ve come from that to a company with bestinclass governance. We resolved the Waymo case with those adversaries now investors; we resolved the data breach with all 50 states and with regulators around the world; and we’ve been on a journey to really repair the culture and improve morale. And now we’re a public company. And we are a brand that is a verb, a very highprofile company. We are upfront that we still have a lot of work to do.
Q: What are the ramifications of AB5? A: People don’t fully appreciate that AB5 is a codification of what the (California) Supreme Court has already determined, so it is already the law of the land. The Dynamex decision underscored the need to improve the quality of independent work. We have many, many people working in the ondemand economy. How do we make sure that (it offers as much) protections and security and fulfillment as any other type of work? This goes far beyond some argument about whether or not someone’s an employee. We have an opportunity here to be very, very deliberate and not stumble into an economic disruption as independent, flexible work becomes more and more mainstream.
Q: How would you do that?
A: We’ve been working
“My guess is that everybody would end up paying more.” Tony West, general counsel for Uber
really hard to negotiate with labor and other stakeholders to create a framework that allows for flexibility and security. We put on the table a standard for drivers to have earnings stability and transparency, by creating a floor for earnings. Drivers can always earn more, but they (would) know with some certainty that their earnings will never fall below a certain level. We’re also (proposing) a basket of benefits, whether retirement benefits, paid time off, lifelong learning, a whole host of benefits. And the third leg of the stool is making sure that workers have a voice, have representation, have an ability to weigh in on the policies that shape how we conduct business.
Q: All of those things could be provided very easily by making workers employees. AB5 author Assemblywoman Lorena Gonzalez said she’d be happy to enshrine into the legislation that employers can be as flexible as they want; they do not have to schedule their workers; they can let them punch in and out at will. So why not go with the existing model?
A: Drivers don’t want to be employees. We’ve polled them and the overwhelming majority say they value the fact that they don’t have a boss, no one tells them when, where or how to work, they choose when to work, and they choose for whom to work. Folks in the ondemand economy make that choice every single day and that flexibility is what they value the most.
The other thing is that they don’t just work for one company. Many have both Uber and Lyft decals on their windows. This idea that you could simply work for one company one day and another company another day and have that flexibility as an employee is simply not realistic.
They can decide not to work for three weeks, and guess what, they will never be fired because of that. That kind of dynamism where people are making the decisions minute to minute whether to work simply does not exist in the traditional employment framework.
Q: In exchange for these protections of a wage floor, benefits and driver voice, you want legislation saying that drivers are independent contractors, correct?
A: We can create a framework to support individuals who choose independent work. We do need a legislative vehicle to enshrine this kind of framework. This is about creating something very new to improve the quality of independent work. As competitors, we can’t engage in some of these things, such as (agreeing on) drivers’ earnings without running afoul of antitrust laws.
Q: Many drivers don’t feel that they have “dignity of work” when Uber can change rates arbitrarily. They feel trapped because they value the flexibility but lack the control over their earnings of being truly independent.
A: We’ve heard from drivers that the inability to predict earnings over time can be difficult because there are times where you can make a whole lot driving for Uber, and then other times where it’s not as clear. That’s why we want to create this earnings floor, a standard that would be at least minimum wage plus expenses.
Q: How would you determine expenses? Would you use the IRS rate of 58 cents a mile?
A: There are different ways to calculate that; that’s not the only standard. That detail is one I’m absolutely confident we can work out.
Q: You’re offering that pay floor from the moment a driver accepts a ride request until the ride ends. What about times when drivers have the app on and are cruising around waiting for riders?
A: We wouldn’t be paying for time in which someone is not working and could have many, many apps on. If someone wakes up in the middle of the night and turns on the app, and they’re not even in their car, I don’t know if it’s fair to expect that they would be compensated for that time.
Q: Your proposal says you’d charge a pertrip fee to support a benefits plan, so riders would pay more. Would you pay for the
benefits as well?
A: My guess is that everybody would end up paying more. There is no question there would be increased costs (for) the company, but there would be increased costs for riders as well. I think everybody would pay a fair share to support drivers.
Q: How would you ensure that your proposed drivers association actually had some clout? There’s a similar group, the Independent Drivers Guild in New York, that gets slammed as being toothless because it doesn’t have the same rights as an actual union; it cannot engage in collective bargaining, for instance.
A: We are committed to creating a mechanism where drivers’ voices are heard. Real input can lead to different results; we welcome that kind of involvement. Exactly what it looks like is still to be worked out.
Q: Your sisterinlaw Kamala Harris, along with several other Democratic presidential candidates, tweeted support for drivers when they staged protests outside this very building and held a worldwide strike last month. Your wife is her campaign manager. Did that cause any dissent at home?
A: No. We definitely support workers’ right to make their voices heard. If that is through demonstrations, protests or strikes, we support that because we live in a country that supports free speech. I’m 100% supportive of my sisterinlaw’s campaign for president. As a family member, she makes me proud. As a citizen, she gives me great hope.