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Uber, Lyft and other gig economy companies misclassify workers

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Democratic presidential candidate Sen. Elizabeth Warren (D-Mass.) as she campaigns at the Seattle Center on February 22, 2020.

Karen Ducey

The coronavirus pandemic has delivered a one-two punch to American workers – a public health emergency paired with a brutal economic crisis. Our country has lost millions of jobs and has already experienced some of the highest unemployment numbers since the Great Depression. Essential workers are risking their safety on the job, often without adequate protections. Senate Republicans have made shielding employers from liability, while dismantling federal labor protections, their top priority for the next relief package. We need to respond to this crisis by putting power in the hands of workers – and a key part of that is ending worker misclassification.

Gig economy companies like Uber, Lyft, GrubHub, and Amazon misclassify workers as “independent contractors” rather than employees, enabling them to deny workers collective bargaining rights, health care, a minimum wage, overtime protections and access to unemployment insurance and paid sick leave guaranteed to employees under state and federal law.

This model harms workers who rely on these jobs to support themselves and their families. Competitors who are trying to follow the rules also can’t compete with the artificially low costs enjoyed by companies that shirk worker protections by misclassifying workers. State and local governments also suffer, because these companies don’t pay into state unemployment or workers compensation funds or pay employer payroll taxes for misclassified workers.

Misclassifying workers as independent contractors can be a popular tool for employers looking to strip workers of basic rights and protections to pad their own pockets. And if we don’t act, this anti-worker practice will be embedded deep into our economy.

Right now, Uber is leading the charge to seek a new legal classification for gig economy workers that would write into law a way for companies to evade their responsibilities to workers. Along with other gig economy companies, it is trying to convince the public and policymakers that everyone will benefit if it is allowed to flout the rules that apply to all other employers. And a former lawyer from the firm defending it, its former counsel, who now leads the Department of Labor, is rushing to issue a rule to make it easier for companies to misclassify workers.

Instead of helping giant companies evade the law, we should follow the lead of states that have taken steps to protect workers. In Massachusetts and California, there are comprehensive laws in place and a stringent test to stop companies from misclassifying their workers. Known as an “ABC test” for the three conditions that must be met for a worker to be classified as an independent contractor, it’s a clear, straightforward way to ensure that workers aren’t denied rights and protections so companies can maximize their profits. Attorneys General Xavier Becerra and Maura Healy recently sued Uber and Lyft under this test for continuing to misclassify workers in violation of California and Massachusetts law, and a California judge has agreed that the drivers must be classified as employees under the test. We need to apply that test to federal laws like the National Labor Relations Act and Fair Labor Standards Act so it protects every worker.

Ending worker misclassification is just one part of what Congress should do to protect workers.  The weak labor market is giving employers the power to hold wages flat or cut them as a condition of rehiring, or to replace full-time, union-represented jobs with part-time or contractor positions that don’t offer benefits, stability, or protections. Early data suggest that people who are out of work during the economic fallout of the pandemic are returning to jobs offering fewer hours and less pay. Communities of color and low-income workers have been hit hardest by the economic impact of Covid-19, and are most at risk of further harm if we fail to act.

After more than a decade with no increases, it is long past time for Congress to raise the federal minimum wage – and make further increases automatically tied to inflation. Millions of workers earned wages so low before the virus hit that after losing their jobs, they’ve seen an income boost from unemployment benefits. That doesn’t mean benefits are too generous: it means wages are too low. Workers also need strong health and safety guarantees. Congress must include an Essential Workers Bill of Rights in the next coronavirus relief package to guarantee benefits and protections for essential workers, who have been left unprotected and underpaid by big employers.

Unemployment coverage provided in the CARES Act has been a lifeline for families and for our economy. The full $600 supplement to weekly benefits should be extended immediately, and those benefits, as well the additional unemployment benefit expansions like Pandemic Unemployment Assistance, should be tied to real-time economic data, not an arbitrary cut-off date. While this administration has worked to dismantle workers’ rights to unionize and collective bargaining at every turn, it is also time for Congress to weigh in by protecting and strengthening workers’ rights.

Our country faces an unprecedented health and economic crisis, and our failure to protect workers has added fuel to the fire. If workers had more power at the onset of this crisis, companies might have implemented protections that would have slowed the spread of the virus. If workers had fair wages, families might have had more cushion to weather a recession. We can’t change how this crisis started, but we can still change how we emerge from it.

Elizabeth Warren is the senior senator from Massachusetts and a member of the Senate Health, Education and Labor Committee. Shannon Liss-Riordan is a Massachusetts-based labor lawyer and former candidate for the U.S. Senate who once sued Uber in a class-action lawsuit for drivers.

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Gig Workers’ Only Chance to Pee Is Apparently an App

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Nowhere has COVID-19’s tendency to accelerate the worst trends in our economic order been more clear than in the gig economy.

Before the pandemic, gig workers—already forced to demean themselves to make ends meet—were regularly denied reliable access to clean bathrooms at restaurants, Uber facilities, and airports. The problem has only gotten worse, and things so dire that a rather dystopian app has launched to find drivers places to relieve themselves.

The Whizz App pitches itself as a solution that “gives gig workers ‘pee’ace of mind with hassle-free access to restroom facilities.” The gist of it is simple: “travelers, gig economy workers, and soccer moms” can sign up to use the app, and partner restaurants let Whizz users use their bathrooms. According to the app’s website, in exchange Whizz offers “Free Advertisement for any Restaurant who allows Whizz essential partners to use their Restrooms During the Covid 19 crisis.” The app’s first partner is the WaBa Grill chain of restaurants, which has made bathrooms at 200 locations available to subscribers.

Whizz did not immediately respond to Motherboard’s request for comment.

On one hand, any bit of help is welcome for gig workers who are working long hours at sub-minimum rates to enrich investors that conspire to deny them basic worker protections and benefits. And yet, the reason why things have gotten so bad as to give rise to an app for completing a basic human function is not simply because of the exploitative companies at work here, but the political and regulatory authorities that have been slow to act.

For years, dozens of the nation’s largest airports—where ride-hail drivers sit all day waiting for trips and are forced to use unclean bathrooms that often don’t work—had seemingly no interest in paying for new restrooms, maintaining existing ones, or applying adequate pressure on ride-hail companies to force them to provide bathrooms for their drivers.

In fact, instead of paying for bathrooms, Uber left it up to airports to “what facilities to provide and how to maintain them.” Adding insult to injury, the company  constructed an elaborate (and likely illegal) system to steal millions from ride-hail drivers at airports.

In New York City—one of the largest ride-hail markets in the world—gig workers have, for years, had woefully inadequate facilities and unreliable access to them. Before the pandemic, the city only provided 32 relief stands for over 100,000 drivers.

“On top of the physical challenges of working out of their cars daily, most drivers are working increasingly long hours, often far from home and at an unrelenting pace,” the Whizz team wrote in a press release. “Adding to their challenges, drivers are often denied access to restrooms leading to a growing indignity of having to find relief in parks, alleys, and even containers they carry around in their own vehicles.”

And yet, while the app attempts to solve a real problem, we shouldn’t lose sight of the fact that  things are this bad because they were allowed to get this bad, inch by inch. Over the past ten years, gig companies have forced workers to fend for themselves, state officials have been slow to challenge this exploitation and often legitimized it, early media coverage was uncritical and helped embed corporate propaganda into the public imagination, and researchers were convinced to publish findings that happened to align with gig economy talking points.

Sure, the app might help a few workers in a few areas, but maybe an even better solution might be actually mandating restaurants and other facilities allow gig workers to use their bathrooms. Or, alternatively, building relief stands that are reliably accessible and clean for gig workers.

We can imagine a million incremental reforms that make things a little better for workers, but all of them assume, on some level, that the gig model is legitimate(a debatable point) and that it simply needs to be made more humane. Nor do piecemeal reforms answer the question of why it is that gig workers are not allowed to do something as simple as use a bathroom in the first place.

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It’s a Ballot Fight for Survival for Gig Companies Like Uber

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OAKLAND, Calif. — By late August, the urgency was becoming clear. Top executives of Uber, Lyft and the delivery service DoorDash met to discuss a California ballot measure that would exempt them from a new state labor law and save their companies hundreds of millions of dollars.

The survival of their businesses was on the ballot.

Days later, political strategists responded to the executives’ concerns by telling the companies, which had already pledged $90 million to back the measure, that they needed to spend a lot more if they wanted to win, said three people familiar with the discussions, who were not allowed to talk about them publicly.

The fight over the ballot measure, Proposition 22, has become the most expensive in the state’s history since then, with its backers contributing nearly $200 million and 10 days still to go until the Nov. 3 election. Along the way, the companies have repeatedly been accused of heavy-handed tactics; a lawsuit filed on Thursday claims Uber is coercing the support of its drivers.

Despite the big spending and a barrage of television advertising, only 39 percent of likely voters said they supported Uber and Lyft in a poll last month by the University of California, Berkeley, while 36 percent opposed their proposal and others were undecided. People close to the campaign said they would want to see close to 60 percent approval in polling before they could breathe a sigh of relief.

The ballot measure, which is also being backed by Instacart and a delivery company that Uber is acquiring, Postmates, could be a harbinger for gig companies in the rest of the country.

Prop 22 would exempt the companies from complying with a law that went into effect at the beginning of the year. The law is intended to force them to treat gig workers as employees, but Uber and its peers have resisted, fearing that the cost of benefits like unemployment insurance and health care could tip them into a downward financial spiral.

Though Uber and Lyft, for example, are publicly traded companies with a combined worth of $70.5 billion, they have never been profitable. They lose billions of dollars each year, and the pandemic has made turning a profit even more difficult. DoorDash, which has filed to go public, has also struggled. Analysts estimate that complying with California’s gig-worker law could cost Uber, which lost $1.8 billion in its most recent quarter, as much as $500 million a year.

Uber said it planned to cut off work for the approximately 158,000 California drivers who were active on the platform each quarter if its ballot measure failed. It would employ roughly 51,000 remaining drivers, it said, and raise fares to meet the higher business costs.

The ballot fight gained additional urgency Thursday evening when the California First District Court of Appeal ruled that Uber and Lyft must treat their California drivers as employees under the new labor law. The state attorney general and the city attorneys of San Francisco, Los Angeles and San Diego had sued the companies in May to enforce the law.

“If Prop 22 does not win, we will do our best to adjust,” said Dara Khosrowshahi, Uber’s chief executive, in a Wall Street Journal interview this week. “Where in California we can operate is a question mark, and the size and scale of the business will be substantially reduced.”

In past dust-ups with local regulators, Uber rallied its passengers for support. The pandemic has made that difficult, so it has urged its tech employees to get involved and used its app to reach out to drivers for support.

The Yes on 22 campaign also started an effort to organize drivers, a move copied from the labor groups that have long tried to organize drivers to fight for better working conditions. And it has forged relationships with high-profile advocacy groups, like Mothers Against Drunk Driving and the California chapter of the N.A.A.C.P.

“Drivers want independence plus benefits by a four-to-one margin, and we’re going to fight for them,” said Julie Wood, a spokeswoman for Lyft. “We believe California voters are on the side of drivers, too.”

A spokesman for DoorDash, Taylor Bennett, said, “Our support for Prop 22 is part of our commitment to protecting the economic opportunity that tens of thousands of Californians value and the access to delivery that so many restaurants rely on, especially at such a critical time.”

A spokeswoman for Instacart declined to comment. Postmates did not respond to a request for comment.

In an effort to gain support, the companies have bombarded riders and drivers with push notifications, campaign ads that appear in their apps and emails promoting Prop 22. Before logging on to start work, Uber drivers have been presented with a slide show of warnings about how their lives could change if the proposition fails.

“A no vote would mean far fewer jobs,” one of the slides on the Uber app warned. “That’s why we’re fighting so hard to win.”

In the lawsuit filed against Uber on Thursday, drivers claim that the messages violated a state law that forbids employers to coerce their employees to participate in political activity.

“I can’t rule out that employers have engaged in coercive tactics like this in the past, but I have never heard of an employer engaging in this sort of barrage of coercive communications on such a broad level, ever,” said one of the attorneys for the drivers, David Lowe, a partner at Rudy, Exelrod, Zieff & Lowe. “It is such an extraordinary thing, from my perspective, for Uber to exploit this captive audience of workers.” Mr. Lowe said he opposed Prop 22.

Matt Kallman, an Uber spokesman, said, “This is an absurd lawsuit, without merit, filed solely for press attention and without regard for the facts.” He added, “It can’t distract from the truth: that the vast majority of drivers support Prop 22.”

In early October, the Prop 22 campaign was denounced by Senator Bernie Sanders after a fake progressive group calling itself Feel the Bern endorsed the proposition in a campaign flier that implied Uber had the backing of progressive leaders. The mailers were, in fact, sent by a firm that creates political mailers representing different views.

“The Prop 22 campaign is working hard to reach voters across the state and the political spectrum to ensure they know that drivers overwhelmingly support Prop 22,” said Geoff Vetter, a spokesman for the Yes on 22 campaign, which is funded by Uber, Lyft, DoorDash and other gig economy companies.

Questions have also been raised about the N.A.A.C.P. endorsement. A political consulting firm run by Alice Huffman, the leader of the California N.A.A.C.P., has received $85,000 from the gig companies’ campaign, public records show. The payment was reported earlier by the news site CalMatters.

Mr. Vetter said the payments were for “outreach.” The N.A.A.C.P. did not respond to a request for comment.

Uber held an all-hands meeting this month for employees to meet drivers who support the proposition, and sent several emails encouraging staff to lobby friends and family.

Although the internal messages were upbeat, the policy staff raised concerns with campaign consultants during the meetings in late August and early September, the people familiar with those meetings said. Among their worries: that the ballot language was unfavorable to the companies, and that people were voting earlier than usual because of the pandemic, meaning advertising would need to be rapid and aggressive.

“We look at the data every day, and our metrics show a tight race,” Justin Kintz, Uber’s head of public policy, said in an early October email to Uber employees, obtained by The New York Times. “At the same time, with continued strong execution against our plan, we’re confident we can win.”

While the email noted that campaigning was optional, Mr. Kintz encouraged employees to participate in texting banks to contact voters and to promote the campaign in conversations with friends.

“The big reason that you’re seeing so much spending is because of the high stakes in this election,” said Mr. Vetter, the spokesman for the campaign. “Hundreds of thousands of jobs are on the line. These are services that millions of Californians rely on.”

The opposition campaign, which is funded by labor unions, has raised about $15 million. Supporters of the No on 22 campaign have argued that voters should reject the push by tech companies, and that the measure would harm workers already at a disadvantage during the pandemic.

“Proposition 22 will make racial inequality worse in California at the worst possible time,” said Representative Barbara Lee, a California Democrat. “You have very clearly crossed the line when you try to claim the equity mantle for a campaign that has always been about allowing multibillion-dollar app companies to write their own law so that they can keep exploiting the labor of drivers, eight in 10 of whom are people of color.”

No matter the outcome of the vote, the gig companies and their opponents are likely to take their campaigns to Washington. Massachusetts has filed a lawsuit similar to the one that the California court decided on Thursday evening, and Uber hopes to avoid continued state-by-state battles by pressing for federal legislation.

Erin Griffith and Noam Scheiber contributed reporting.



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Deliveroo test case over gig economy | Guardian News

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A food delivery rider is taking on Deliveroo in a test case for the gig economy, saying he was sacked without warning at the height of the pandemic.

Deliveroo says it sacked Diego Franco after he had been warned about slow deliveries.

The Fair Work Commission case on Tuesday is the first of its kind against Deliveroo and follows victory for a rider and the Transport Workers Union in a similar case against Foodora in 2018.

The TWU says Mr Franco was sacked by Deliveroo in April after working for the company for three years, leaving the Sydney man and his young family struggling financially.

Deliveroo denies the claim, saying it will be contested in the FWC.

“Mr Franco’s contract was ended after repeated slow deliveries. He was notified of this, however continued to deliver food late,” it said in statement on Tuesday.

“Riders frequently tell us that the freedom that comes with self-employment is the key reason why they choose Deliveroo, and we are defending this claim to protect those freedoms.

“Mr Franco himself regularly made use of these freedoms, which is a flexible way of working that would not be available to him or anyone else if they were an employee.”

TWU national secretary Michael Kaine said the case would be a test for the gig economy.

“Diego is bravely standing up against one of the biggest gig economy companies in the world,” he said in a statement.

“This case could have significant implications for the gig economy in Australia and, with the absence of federal government regulation in this sector, this is a way to hold companies to account.”

He said riders were regularly sacked without warning, had no minimum rates, no guaranteed wages, no right to sick leave and no adequate insurance cover if they were injured or killed while working.

Australian Associated Press



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