December 6, 2021

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Uber and Lyft’s Gig Work Law Could Expand Beyond California

In November, gig companies including Uber, Lyft, DoorDash, and Instacart helped pass California’s Proposition 22, effectively writing their own labor law. Now the companies plan to bring similar legislation elsewhere.

Last month, the companies launched a group called the App-Based Work Alliance to support their agenda. Industry-supported bills in the works in New York state and Illinois would, like the California ballot measure, deny gig workers status as employees, and the workers’ compensation, paid family leave, sick pay, unemployment insurance, and minimum wage guarantees that come with it.

But the bills could give gig workers the right to form something resembling a union, allowing workers to bargain with multiple employers to create wage floors and standards. US workers in trucking, auto manufacturing, and grocery stores have participated in types of industry-wide bargaining, though the arrangement is more common in Europe.

The scheme—first floated in California in 2019—has divided labor advocates. Some labor allies say that allowing gig workers to unionize would give them a much-needed seat at the table, in an industry where work and wages are dictated by algorithm and where access to the “bosses”—the companies that pay their wages—is hard to come by. Gaining the right to collectively bargain, these people say, is a vital first step in making the low-wage, high-turnover job more fair.

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Others say that allowing gig companies to continue to treat their workers as independent contractors is a mistake. Legislation giving workers the right to a union without employment status would effectively be a government rubber stamp to gig companies’ business models, “in which the most low-income workers don’t have access to basic safety net benefits,” says Veena Dubal, a professor of labor law at the University of California, Hastings College of the Law.

Some California drivers are warning others of the downsides of a compromise with gig companies. “We’re absolutely against anything that puts us in a second-class worker status,” says Nicole Moore, a ride-hail driver and organizer with California-based Rideshare Drivers United, a workers’ advocacy group. “That’s why we say employment rights are nonnegotiable.”

The California ballot measure, called Proposition 22, was written by gig companies, who then poured $205 million into supporting it, the most expensive campaign in the state’s history. It reverses a 2019 law known as AB 5, which clarified the status of independent contractors in the state. Now, gig companies don’t have to pay into state unemployment insurance for their workers, and don’t need to provide benefits like health care. Instead, for California workers who qualify by driving or delivering for a certain number of hours a week, the companies say they will provide a health care subsidy and guarantee a minimum wage for the hours spent driving to or picking up riders (but not for the hours spent waiting for a fare).

Proposition 22 is near-irreversible—the law needs a “supermajority” of seven-eighths of the state’s legislature to be changed.

At the same time, gig companies invested in bringing the Proposition 22 fight elsewhere. Lyft stood up a political action committee called Illinoisans for Independent Work that spent at least $660,000 on ad buys and political contributions in local elections. In August, Uber released a white paper laying out its plans for “Independent Contractor+,” a new employment category it hopes to promote across the country.

Now New York, a less-than-traditional gig market in many ways, is set to be among the first states where a post-Proposition 22 battle might play out. A constellation of gig companies and allies on Monday introduced the New York Coalition for Independent Work, which describes its mission as “protecting self-employed, app-based contractors’ independence and flexibility while also working to provide them with needed benefits.” But the state’s relatively labor-friendly climate means that gig companies will have to tread carefully—and that a pitched battle is likely ahead.