Earlier this month, a confident Dara Khosrowshahi, chief executive of Uber, told investors that Proposition 22 was only the beginning. The contentious ballot measure, which was voted into law by millions of Californians this month, allows Uber and Lyft to subvert a new state labor law that required them to reclassify drivers as employees. On a November 5 earnings call, Khosrowshahi said that going forward, “You’ll see us more loudly advocating for… laws like Prop 22.”
Proposition 22 passed in California on Tuesday. Uber, Lyft, and other gig economy companies spent more than $200 million on the ballot measure, which will allow them to classify drivers as independent contractors rather than employees.
Here’s what has changed:
Uber and Lyft are at war with the state of California after a judge ruled last month that ride-hailing companies, like other businesses, should be subject to a new law that classifies their workers as employees rather than independent contractors.
Instead of complying with the ruling, which would fundamentally change how the companies operate and make its workers eligible for protections and benefits, Uber and Lyft have floated the idea of becoming franchises and have also threatened to shut down completely. …
In 2009, the year Uber launched, FedEx made a change to its business model. The shipping firm had previously relied on independent contractors who owned their own trucks and were paid by the delivery or mile rather than the hour. For years, the company faced an onslaught of lawsuits arguing that the people who delivered mail in a FedEx branded truck and uniform should actually be classified as employees, rather than contractors, and protected by minimum wage and other labor laws.
To avoid treating workers as employees as a result of these lawsuits, FedEx pivoted instead to contracting with “independent…
Uber is less a business than a constellation of fantasies. The same goes for Lyft.
Early on, Uber and Lyft positioned themselves as “ridesharing” companies that were a key part of the buzzword-emblazoned “sharing economy.” Uber offered luxury on demand, and Lyft claimed to be a fun, environmentally friendly alternative to taxis. Both sold themselves as efficient and city-friendly and promised to help cut down on miles traveled. That was a fantasy that evaporated before the first pink Lyft mustaches fell off the bumpers. …
Lyft has launched a marketplace where drivers on the front lines of the pandemic can buy personal protective equipment (PPE) such as hand sanitizer spray and face masks. The shopping hub, known as the Lyft Store, has been live since June, according to the company.
Throughout the health crisis, Lyft has been criticized by gig labor advocates for failing to support drivers with little to no safety net. The CDC strongly recommends everyone over two years old wear face masks in public settings, as Covid-19 mainly spreads from person to person through respiratory droplets. …
There was a time when Lyft sent drivers fuzzy pink mustaches to hang on the grill and asked passengers to fist-bump drivers when they got into the front seat. Uber, on the other hand, launched as a black-car-only service with the motto “everyone’s private driver.”
But these days, the mustaches have been trimmed, Uber has ditched its high-end focus, and both companies have gone public to a similarly dismal tune. The Lyft and Uber experiences may seem almost interchangeable. But look a little closer, and there are still some big differences in the way the two companies operate.
When I started reporting on gig workers in 2014, I was surprised to find some of the people who represented labor organizations would respond to my inquiries with mild irritation.
Why would you write about Lyft and Uber’s labor issues, they’d ask me, when there are so many sectors with bigger workforces? Lawrence Mishel, then the president of the Economic Policy Institute (EPI), wrote in 2015 that “dwelling on these companies too much distracts from the central features of work in America that should be prominent in the public discussion.”
A California bill that is on the brink of becoming law threatens the business model of the gig economy. Called Assembly Bill 5 (AB 5), it would make workers for companies like Uber, Lyft, and DoorDash employees under state law, rather than independent contractors, as they are currently classified. That change would legally entitle them to a minimum wage, unemployment insurance, and other benefits.
It’s one thing to pass such a law, but it’s another thing to enforce it. Companies that dispatch workers using smartphone apps typically require those workers to handle disputes outside of court, and those same apps…