Faced with a looming threat to their way of doing business, Uber, Lyft and other major on-demand companies are trying something they’ve historically been reluctant to do: seeking compromise.
Anxious to preserve the freelance work arrangements upon which they’ve built their vast workforces, these companies have been pushing for a grand bargain that will satisfy labor groups’ demands and stave off a California bill that could force them to treat workers in the state as employees — an outcome that would damage their hopes of long-term profitability.
If it were to become law, AB 5 would codify and give additional legal force to the April 2018 state Supreme Court ruling, which created a three-part test for companies across industries seeking to classify their workers as independent contractors. Its most stringent requirement is that workers must be treated as employees if they provide a service that’s core to a company’s business.
What companies are proposing would look a lot like the broad framework Lyft and Uber executives laid out in an op-ed in the. It would include some kind of wage protection, potentially tied to the state minimum wage; a portable benefits fund that each company would contribute to; and some sort of formal worker association through which contractors could voice their concerns.
“Modernizing a safety net that decouples the delivery of benefits from an historical employment model is hard work,” Vikrum Aiyer, the vice president of public policy at Postmates, said in a statement. “These companies have had their chance to do right by the drivers,” said Stack-Martinez, who also is a member of labor group Gig Workers Rising. “But I think it’s come to a point where drivers realize Uber and Lyft can no longer be trusted to do the right thing. And so it’s going to take this legislation to force them to do the right thing, even though I would say the majority of drivers would prefer to stay independent contractors.
“If they were going to go the way of legislation and make sure that this was something regulated and not just promised by companies, I think drivers would be all about that,” Stack-Martinez continued. “But unfortunately, that’s not on the table at this moment.” But there’s little disagreement when it comes to the proposal for a worker association that is not run independently of the companies and thus may come with conditions such as an inability to strike.
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