After California passed a law in 2019 that effectively gave contract workers legal status, companies like Uber and Lyft spent about $200 million on an initiative. vote to exempt their drivers.
To avoid such threats in other states, companies have urged legislation that classifies drivers as contractors, meaning they are not entitled to protections such as minimum wages and unemployment benefits.
The most serious initiative in the field, in New York state, has stalled amid opposition from labor groups as the state’s legislative session ends this week.
But the effort seems certain to be revived, and negotiations – in which companies offer to grant workers bargaining power and certain benefits but not all protections jobs – showed what a final deal could look like in New York and beyond.
Gig companies like Uber and Lyft have long resisted categorizing workers as employees, claiming in regulatory filings that doing so would force them to change their business models and risk being affected. finance. Industry officials have estimated that hiring a driver could increase labor costs by 20 to 30 percent.
As California considered a bill under which contract drivers could potentially be classified as employees in 2019, the companies were in constant meeting with several major unions, including the National Employee Service. and the Study Group, to discuss an agreement along what they have proposed in New York. But negotiations fell apart because many in the labor movement refused to make substantial concessions while retaining the legislative upper hand. The bill was passed in September of that year.
However, after a vote in favor of exempt drivers was passed last fall, some in labor have become more receptive to the deal. New York, where the discussions have been conducted, is a natural place to look for one.
Several companies have labor ties in the state, mainly the International Association of Mechanics, where Uber founded and funded a driver organization in 2016, called the Drivers Association. Independence. In a few ways, the drivers union heralds the arrangement companies are seeking today: It provides a way for drivers to resolve concerns with the company but agree not to contest eligibility. contractors of drivers.
At the same time, labor had leverage. Several rulings in New York granted drivers the usual gig of unemployment benefits in the state, potentially leading to hundreds of millions of dollars in debt to the companies. And there are New York City regulations — like the minimum wage standard for drivers that go up to more than $17 an hour after expenses — that some gig companies have sought to reduce.
A draft legislation, produced by industry officials in consultation with labor groups, considers contract workers to be “cyber workers.” That would essentially make them contractors with certain protections and the right to join a bargaining union on an industry basis, meaning all at once with the big companies. . The arrangement will create more than 150,000 new union members in the state.
Negotiating will happen exclusively for drivers and delivery workers and will include minimum wages, “mobile benefits” such as retirement contributions and a termination appeals process.
But the details of such proposed unions have raised eyebrows. As outlined in the draft, companies will sign an agreement with a single union allowing access to employees through the company’s email system. Once the union has contracted with 10 percent of the industry’s eligible workers and the state labor commissioner certifies the arrangement, the union becomes the exclusive agent of all workers in the industry. No union will have a chance to represent them.
Critics complain that gig companies haven’t consulted extensively enough beyond some benefiting labor groups – among them mechanics, it seems, First to have email access for drivers, and the American Transport Workers Union, which appears to be the first in line to get email access for delivery workers.
“Companies sectoral bargaining bill was drafted without worker involvement,” said Ligia Guallpa of the nonprofit Worker Justice Project, which helps delivery workers build an organization with more than 10,000 members said. “They cannot decide on their own representation. It was pre-arranged. “
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Ms. Guallpa, like other labor leaders and workers’ organizations, said she became aware of the proposal in mid-May, after Bloomberg reported its existence.
Aziz Bah, organizational director of the Independent Drivers Association, said in a statement that “the choice of which union or union to join is with the worker.”
Critics also complain that union funding – possibly more than $20 million a year for drivers’ unions alone – will come from the companies through a fee on the rides they collect, causing employees feel respect for the company. And under the original proposal, workers would be barred from striking while they were negotiating with companies, stripping them of a vital source of leverage.
According to Kate Andrias, a professor at the University of Michigan Law School, some of those features stand in contrast to federal employment law, which typically prohibits unions that companies effectively select, sponsor or control. However, the law does not apply to contractors.
The proposal would also replace the usual unemployment benefits many drivers are currently eligible for with a new system that could lead to lower benefits and that could be harder to collect for some drivers. employees in certain situations.
And the proposal would ban most municipalities from regulating work done through ride-hailing or delivery apps, reverting to the minimum wage standard for drivers in New York City, though workers may have bargained for a floor as high as that minimum or higher.
“They’re talking about bargaining power that is what they’re talking about,” said Bhairavi Desai, executive director of the New York Taxi Workers Union, which has helped ride-hailing drivers win unemployment benefits in the state. Trojan horse. “That union would be complicit in giving them cover when they really seek to dominate the industry.”
Some labor groups involved in the discussions, like the state’s AFL-CIO, have been reticent in their support. John Samuelsen, president of the Transport Workers Union, supported the proposal, citing concerns that workers will not be allowed to strike and Opposition from the delivery man.
An Uber official, who is not authorized to speak publicly, said the company was open to changes that would make it easier for more unions to represent workers in the ride-hailing or delivery services industry. A later draft relaxed strike restrictions in negotiations with companies.
Uber, Lyft and DoorDash said in statements that they remain interested in working with “stakeholders” on the law.
But for all those opposed to the proposal, the episode suggests that some sort of deal is still possible in New York and other states where gig companies or industry groups have explored the law. Independent contractors, including Illinois, Massachusetts and Connecticut, all have Democratic-controlled legislatures. . Some states have policies that allow drivers to be considered employees.
State Senator Diane J. Savino, who has been a major participant in the legislative efforts in New York, said in an interview Monday that she has been in contact with more groups recently and the discussion will continue in the coming weeks. “The clock may have run out of legislative session, but time is not up on this issue,” she said.
Crucially, even many of the labor groups that rejected New York’s proposal stopped demanding all rights and protected employees’ status. “Their priority is living wages, organizational rights and more safety protections,” said Guallpa of the Worker Justice Project when asked about the importance of segregation. employee type is delivery worker. “Nobody organized around that.”
If gig companies offer more meaningful concessions, such as securing a more independent union, some labor groups may be willing to take them on, in return for their status. Staff.
“If large groups of workers see a way to improve their current economic situation by participating in initiatives that allow them to form unions,” said Mr. Samuelsen of the Transport Workers Association. .”