You Call It the Gig Economy. California Calls It ‘Feudalism.’ – The New York Times
Until now, the ride-share drivers have fallen into a labor netherworld, classified as independent contractors by the National Labor Relations Board and thus not entitled to protected union activity. Organizing efforts have bogged down in a welter of court rulings and confusion over federal laws and pre-emptions. A Seattle law to allow ride-share drivers to organize a labor union was struck down by a federal-court decision that only states could confer such a right on independent contractors.
That appears to create an opportunity for California to establish a mechanism for drivers to unionize under the auspices of a state labor board, which could be extended to oversee union activity for other gig workers excluded from federal jurisdiction. Organizations of ride-share drivers, encouraged by their success in helping lobby for the California bill, will take on that goal next.
Ride-share companies will continue to fight the California measure, which they maintain would cripple their business model. Barclays has estimated that to comply next year would cost Uber $507 million and Lyft $290 million. Uber, which insists that its drivers don’t qualify as employees, has said it will force them to make claims for employment status individually. Uber, Lyft and the food delivery service DoorDash have together committed $90 million to financing a 2020 ballot initiative to overturn the law, a quest that would face dubious prospects.
The companies’ offers to give drivers greater benefits and some input have all been rejected as insufficient, but Governor Newsom has said that, even after signing the bill, he will continue to attempt to forge some compromise that might create a third category of worker — not an employee, but an independent worker with certain enforceable rights and benefits.
All of the scenarios suggest rethinking the role of the state in protecting workers’ rights and economic security, accelerating a shift that has been going on for years. As union membership declined, states — in particular California — have been the mechanism to insure benefits including higher minimum wages, access to affordable health care and portable retirement plans.
Uber, which has reported huge losses and laid off hundreds of workers in recent weeks, has warned that the California measure will have broad ramifications. A coalition of labor groups in New York has already proposed legislation modeled on the bill, and Gov. Andrew Cuomo has indicated support, saying he “does not like to lag California in anything.”
In the end, in whatever form Uber survives the changed landscape, it may have served as a vehicle to usher in new models of labor laws for the 21st century.