- California Uber and Lyft drivers are looking to unionize even after the recent passage of a law that would require workers to be recognized as employees rather than independent contractors.
- Gov. Gavin Newsom signed the bill, known as AB5, into law on Sept. 18, but it still faces challenges from Uber and Lyft.
- Lyft and Uber said they have restricted the number of drivers who are able to pick up riders in unpopular areas of New York City to comply with minimum wage requirements.
Uber and Lyft drivers in California are looking to unionize after the passage of a bill that would recognize them as employees rather than independent contractors.
Democratic California Gov. Gavin Newsom signed AB5 on Sept. 18. However, the law is in limbo as rideshare companies fight back with promises of a more “progressive framework,” according to a Washington Post analysis Monday.
“We’ve been proudly advocating for a new progressive framework that would for the first time give minimum earnings guarantees, access to benefits and a right to organize to independent workers,” an Uber spokesperson told the Daily Caller News Foundation in a statement.
“We’ve engaged in good faith with the Legislature, the Newsom administration and labor leaders for nearly a year on this issue, and we believe California is missing a real opportunity to lead the nation by improving the quality, security and dignity of independent work,” the spokesperson continued.
Analysis: Uber, Lyft drivers vow to continue fight for unions despite company pushback https://t.co/2GWHL5mWgm
— The Washington Post (@washingtonpost) September 23, 2019
Uber, Lyft and DoorDash pledged to spend a collective $90 million against the bill.
Some drivers feel the companies are cheating drivers out of fair wages and benefits by vowing to dispute the laws.
“We have heard from the industry that they’re not going to follow the law, so we have quite a few fights ahead,” driver and Rideshare Drivers United organizer Nicole Moore told WaPo. “We are committed to basic employment rights, a basic wage. We can’t count on anything from [Uber and Lyft].”
Others say unionizing may be an overall better option than AB5 because the act of collective bargaining would force the rideshare apps to meet their demands.
“The main obstacle is they wouldn’t be able to bargain over pay without a union,” Data and Society research lead Alex Rosenblat told WaPo. (RELATED: What We Learned From Uber Making Its IPO Filing Public)
A new California law could mean that Uber and Lyft would have to reclassify their drivers as employees pic.twitter.com/opsCJyy3ut
— Bloomberg TicToc (@tictoc) September 22, 2019
Lyft communication director Adrian Durbin said in a statement the company is “confident” California and rideshare companies can “reach a historic agreement.”
“We agree with Gov. Newsom that California still has an opportunity to support the overwhelming majority of rideshare drivers who want a thoughtful solution that balances flexibility with earnings guarantees and protections. We are confident that with his leadership we can reach a historic agreement,” Durbin said according to WaPo.
One consequence of AB5 and potential legislation like it in other places such as New York, however, is the impact it could have on low-income areas if the apps cut driver availability in outskirt areas, Reuters reported.
Today in unintended consequences:
NYC tries to increase driver pay by capping supply and mandating wage floors. Uber/Lyft comply, limiting drivers in low-demand areas.
Net result? New Yorkers in predominantly low income areas lose access to transport.https://t.co/mQuBDwcPmE
— Zak Kukoff (@zck) September 17, 2019
About 70% of over 500 Uber and Lyft drivers were “extremely” or “very” satisfied with their jobs, a September survey found. Many drivers are also working other part-time jobs. Uber said 92% of people who drive for its app work fewer than 40 hours a week, and 45% work fewer than 10 hours, The Wall Street Journal reported citing RBC Capital Markets.
For example, Lyft and Uber have restricted the number of drivers who are able to pick up riders in unpopular areas of the city in response to New York City’s minimum wage requirements, according to WSJ. The city’s Taxi and Limousine Commission guaranteed a minimum wage of $17.22 for drivers in February.
New York also requires the rideshare companies to reduce “cruising” rates — or the amount of time drivers spend traveling from one customer’s destination to another customer — by 5% starting in February and later 10%, Reuters reported.
Both companies have argued against such measures, saying it not only makes work less profitable for drivers when they are recognized as employees but also complicates transportation for people living in low-income areas.
Drivers recognized as employees could also lose perks that come with being recognized as independent contractors like schedule flexibility, Harry Campbell, founder of rideshare blog The Rideshare Guy and a former part-time Uber and Lyft driver, said in an interview with CityLab.
“Sometimes, I need a two- to three-hour break. I can’t always be relied upon to be at work at specific times,” 43-year-old Lyft driver Rachel Hudson, who has arthritis and an anxiety disorder, told WSJ. She added that working for Lyft “is the only way I can afford a car. It makes a huge impact on my life.”
Lorena Gonzalez, the Democratic California state assemblymember who wrote AB5, told WSJ that nothing about the law “prevents these companies from offering flexible scheduling to employees.”
2020 Democratic candidates including Julian Castro, Bernie Sanders, Kamala Harris, Pete Buttigieg, Andrew Yang and Elizabeth Warren expressed support for the legislation.
Discussions about the law will resume in January, when AB5 goes into effect, according to WSJ.
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