It is sometimes mind-boggling how far some companies will go to avoid doing the right thing.
In 2018, California passed “AB-5” — a bill designed to protect workers rights and stop the practice of companies who abuse the “contractor” status of workers. “Gig” companies like Uber, Lyft, and DoorDash have lived off that contractor status to avoid paying certain taxes, benefits, overtime, or minimum wages to tens of thousands of drivers. As self-employed contractors, drivers haven’t had a legal right to form labor unions or negotiate contracts.
California passed the law to try to help workers after hundreds of thousands of Uber drivers sued the company to stop what they viewed as Uber’s abusive business practices.
Uber drivers spent more than six years fighting the company in court, saying they had been intentionally mis-classified. They claimed that drivers should be considered employees because the company has so much control over their workday, including strict rules on their vehicle conditions, what rides they can take, and which routes to use.
Over the years, Uber has refused to reclassify drivers, maintaining that drivers are not employees because they set their own schedules and provide their own cars.
However, in May, Uber settled the main court case with 13,600 Uber drivers, agreeing to pay them $20 million but without changing their status as independent contractors. The other 350,000 drivers who were part of the initial class-action lawsuit had signed mandatory arbitration agreements, so a federal judge is requiring them to pursue their cases in a private forum, where they are less likely to win their case.
The companies lobbied against AB-5 and threatened to keep fighting even if the law was passed. It did, and they are.
The Protect App-Based Drivers & Services campaign, which is being funded by Uber, Lyft, and DoorDash, will file paperwork on Tuesday to put a referendum on California’s 2020 ballots.
AB 5 requires companies to hire workers as employees, not independent contractors, with some exceptions. The change will likely give hundreds of thousands of California workers — this includes Uber drivers and other gig workers who are currently classified as independent contractors — basic labor rights and benefits for the first time ever.
At a bizarre press conference, one that did not feature any executives from any of the companies, but rather a small handful of drivers, a Chamber of Commerce official, and the founder of Fathers Against Drunk Driving. This looked like an attempt to make it look like this was some “grassroots” effort vs one that is totally corporate.
One driver tried to explain that as an employee, they wouldn’t have as much flexibility in their work schedule. That was the best reasoning they had … as if no company ever offers flex time or things of that sort. Also, a little less flexibility in scheduling is probably a pretty good trade-off for better wages, benefits, and the right to organize to protect their own rights.
It is also fair to speculate that if the drivers were employees, then drivers could enjoy even better earnings as the territories could be regulated instead of the dog-eat-dog, everyone out for themselves climate that exists now.
Since the bill passed the state assembly in May, California businesses had been in a panic. The state’s Chamber of Commerce and dozens of industry groups lobbied for exemptions, and a long list of jobs were excluded from the bill: doctors, dentists, lawyers, architects, insurance agents, accountants, engineers, financial advisers, and a few others.
Notice the exempted jobs tend to be ones that are closer to the top of the “food-chain” of employment vs the bottom. Few would argue that doctors and lawyers are getting a raw deal when it comes to their employment status.
California certainly, in many people’s eyes, have done the drivers a great service in passing AB-5, who tend to not be paid nearly as well as doctors and lawyers. Other low-wage workers who typically get classified as contractors can also benefit.
Perhaps these companies should consider taking those millions of dollars and using them to actually treat their workers right instead of trying to undermine a law with propaganda so the executives can take home bigger checks on the backs of their workers. Those same executives who didn’t even bother to show up to their own press conference to announce the ballot referendum plan.