Uber, having prevailed in passing an expensive ballot measure that exempts it from California labor laws, wants to take its new model and message around the world with a brand that sounds like it was stolen from a streaming service: “IC+” — as in “independent contractor-plus.”
“Over the long term, the IC+ model is going to win,” Uber Technologies Inc.
Chief Executive Dara Khosrowshahi said last week in a conference call.
The push will use California’s Proposition 22 as its guide, offering more benefits than current gig work does but avoiding basic protections of employment, such as unemployment insurance. Prop. 22 promises gig workers an earnings guarantee and access to health-care subsidies that depends on the number of hours they work.
Khosrowshahi said he intends to advocate for the IC+ model not only around the nation but also the world. He said it is the best compromise that allows flexibility for gig workers while providing them with better pay and benefits without classifying them as employees.
The approach will face opposition, as it did in California, and the branding risks backfiring on Uber, according to Gerry Corbett, founder of public relations company Redphlagg in Foster City, Calif.
“The drivers will still struggle not having employee status, and Uber benefits financially” despite the messaging by Uber, Corbett said.
“Prop. 22 is not, in any way, an ‘independent contractor-plus’ model,” said Veena Dubal, a labor law professor at UC Berkeley’s Hastings College of the Law. “Like Prop. 22’s political advertising, Khosrowshahi’s framing is inaccurate, misleading and dangerous.”
Dubal added that “independent contractors are small-business people who set their own prices, develop their own clientele, and can grow their business through entrepreneurial acumen. Uber drivers cannot do any of those things.”
While Uber seems to be the only one pushing the “IC+” name, other gig companies such as Lyft Inc.
DoorDash Inc., Instacart and Postmates Inc., which spent a combined $205 million to pass the initiative, also intend to continue to try to carve out their own labor laws in other states, as well as federally.
“We’re looking ahead and across the country, ready to champion new benefits structures that are portable, proportional and flexible,” Tony Xu, chief executive of DoorDash, said in a statement.
Lyft co-founder and Chief Executive Logan Green said on the company’s earnings call Tuesday that the company intends to “engage with legislators” around the nation, and that he hoped Prop. 22 would become “a model for other states.”
Besides portable benefits, the companies are amenable to working with unions through sectoral bargaining, in which unions negotiate with multiple companies in the same industry instead of with individual companies.
Anthony Foxx, chief policy officer for Lyft, said in a statement that “Lyft stands ready to work with all interested parties, including drivers, labor unions and policymakers, to build a stronger safety net for gig workers in the U.S.”
William Gould, emeritus law professor at Stanford University and a former chairman of the National Labor Relations Board, questions whether sectoral bargaining could bring meaningful changes for drivers. The benefits that drivers secure could be “artificial, self-defeating and simply imposed from above,” he said.
But a report released by the Labor and Worklife Program at Harvard University earlier this year — to which unions, labor lawyers, academics and others contributed — recommends sectoral bargaining in part because it says it could be more effective for gig workers: “Among its many virtues, sectoral bargaining addresses the problems of fissuring: It matters not whether someone is employed directly, is employed by a subcontractor or by a franchisee, or is an independent contractor.”
Erica Mighetto, a driver and worker organizer with Los Angeles-based Rideshare Drivers United, is skeptical about the push.
“I’m very concerned about whether drivers will be included in any conversations between unions and employers,” Mighetto said. “You have to be a driver to really understand the day-to-day challenges that we face.”
The Independent Drivers Guild has had some success with bargaining with more than one company. The group, which is affiliated with the Machinists Union and was started with funding from Uber (that ends this year), negotiates with Lyft and Juno, too. The IDG helped secure a minimum wage and other benefits for drivers in New York City and represents 200,000 ride-hailing drivers in New York, New Jersey and Connecticut.
Brendan Sexton, executive director of the Independent Drivers Guild, said that with Prop. 22, “California consumers ended up dictating drivers’ working conditions. On the East Coast, we definitely do not want to be in that position. We want collective bargaining rights.”
Katie Wells, a postdoctoral research fellow at Georgetown University whose research centers on the Washington, D.C., gig economy, is convinced the fledgling effort to organize gig workers will continue. She said there is a move under way to “shift the onus back onto employers to prove that workers are not really employees.”
Gould said he is concerned the result in California will make other states hesitant to move forward in seeking stronger protections for gig workers.
“Plaintiffs were winning against Uber under the pre-ABC standard,” he added. “What [Prop. 22 has] done is render this group of workers completely outside under any independent examination of their status. It’s preposterous.”
New Jersey, Pennsylvania, Massachusetts and Washington, D.C., have been considering measures similar to California’s Assembly Bill 5, which codified a 2018 state Supreme Court decision that adopted a standard for when a worker should be considered an employee or independent contractor. It is this law that the gig companies will no longer need to follow in California because of their victory, which requires them to offer some concessions to drivers and delivery workers but continues to set them apart from other employers that have to pay into Social Security, Medicare and unemployment insurance benefits for their workers.
“Uber and Lyft have built their billion-dollar businesses while denying their drivers basic employee protections and benefits for years,” Massachusetts Attorney General Maura Healey said in a lawsuit she filed against Uber and Lyft in July, which seeks to classify workers as employees under Massachusetts Wage and Hour Laws. “This business model is unfair and exploitative. We are seeking this determination from the court because these drivers have a right to be treated fairly.”
And the fight in California may not be over. Mighetto, the worker organizer for the Los Angeles drivers group, said she and many others remain committed to fighting in California, including by challenging the seven-eighths provision in the measure and more.
“We want to challenge the fact that they had unfair access to voters,” she added, referring to the gig companies sending pro-Prop. 22 messages to their drivers and customers via their mobile apps.
As they look to expand their victory, the gig companies are still facing legal challenges in their home state. This includes a court order for Uber and Lyft to classify their drivers as employees, which the companies are asking to be thrown out in the wake of their Prop. 22 victory.
“Our office remains committed to vigorously enforcing the law and obtaining relief for workers who have been exploited by companies like Instacart, Uber, and Lyft,” said Hilary Nemchik, spokeswoman for San Diego City Attorney Mara Elliott, whose office joined California Attorney General Xavier Becerra in suing Uber and Lyft to force them to comply with the law. “Proposition 22’s ultimate impact on labor practices is still very much an open question, but it certainly does not make up for past harms.”
San Francisco City Attorney Dennis Herrera also joined that lawsuit. John Cote, a spokesman for Herrera’s office, said: “They can’t change the fact that they have been violating the law for years. Drivers and the public deserve restitution and penalties for Uber and Lyft’s misconduct up until the time Prop. 22 takes effect. We are going to continue with our case until justice is served.”
MarketWatch staff writer Elisabeth Buchwald contributed to this article.
UK Supreme Court’s Uber decision is a victory for all gig workers | Business and Economy News
For the past few years, the “gig economy” business model – in which workers are classified as independent contractors and therefore not given basic employment rights – has been on trial across the world.
From Uruguay and the United States to Australia and France, couriers and drivers have been bringing legal challenges against food delivery and passenger transport companies, such as Uber, Lyft, and Deliveroo, arguing that as their “workers” or “employees” they should be entitled to employment protections such as minimum wage, paid holidays and the right to unionise.
The United Kingdom has been one of the main battlegrounds for such cases and things have not gone well for the companies: they have lost virtually every high-profile workers’ rights case that has been brought against them.
And last week, they lost again. In a landmark decision published on February 19, the UK Supreme Court ruled that Uber drivers belong to the legal category of “limb (b) workers”, which entitles them to employment rights.
The court reasoned that “the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber… [It] is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill.”
For anyone who has taken an Uber before, this assessment is no shocker. The decision is also not surprising as Uber had already lost three times in a row before the case reached the Supreme Court. Nevertheless, this decision still has dramatic implications for workers.
“Gig economy” companies often make the people who work for them sign highly sophisticated contracts that are designed to make it look like they are independent entrepreneurs rather than the companies’ employees. When the issue goes to court, the companies rely on these contracts to argue their case. These contracts are key to the functioning of the “gig economy” because they are the main mechanism through which the companies try to disguise the otherwise blindingly obvious fact that they are hiring workers and telling them how to do their jobs but refusing to give them basic employment rights and protections.
The Supreme Court addressed this issue in its latest decision against Uber head-on. In particular, it held that courts and tribunals should not treat these contracts as the starting point of their analysis, because “an employer is often in a position to dictate such contract terms” and “the individual performing the work has little or no ability to influence those terms”.
The effect of the Uber decision is that it will now be even harder for employers to use their contracts to misclassify their workers and deprive them of basic rights. This means that any attempt by Uber to squirm out of the decision by changing the contracts – as the company has already hinted at – will be all but hopeless in the courts.
With last week’s decision against Uber, the Supreme Court also underlined its commitment to ensuring that the laws passed by Parliament – in this case laws that aim to protect vulnerable workers from exploitative employers – are being fully implemented.
The UK Supreme Court has been bolstering the role of Parliament for a while now.
In 2017, the court held that despite the Brexit referendum vote, then-Prime Minister Theresa May could not take the UK out of the European Union without an act of Parliament. Later that year, the court struck down a regime of employment tribunal fees, noting that if people do not have unimpeded access to the courts to demand the enforcement of the laws passed by Parliament, “the democratic election of Members of Parliament may become a meaningless charade”.
And in 2019, after Prime Minister Boris Johnson attempted to shut down Parliament for several weeks, the Supreme Court ruled the decision unlawful. Indeed, it is a hypocritical peculiarity of British politics in recent years that despite a Brexit campaign fought by some – ostensibly – to protect the sovereign role of Parliament, it is the Supreme Court, rather than the Brexiteer government in power, that has become the institution’s staunchest defender.
With its latest decision against Uber, the Supreme Court sent the message to all UK workers that it would not allow gig economy companies to trample employment rights and protections that have been enshrined in law by their elected representatives.
The impact of the decision is likely to be felt beyond Britain’s shores as well.
For example, some of the worker’s rights the Supreme Court considered in last week’s decision come from European Union (EU) law. In EU law, various employment rights, such as paid holidays, equal pay for men and women, and protection from discrimination, apply to “workers”, a legal category with the same definition in the bloc’s 27 member states. So, the fact that Uber drivers were held to be “workers” in the UK would likely be persuasive for courts across the EU considering whether the company’s drivers are entitled to the same rights there.
Beyond Europe, from India to the US, the decision has been hailed as a symbolic precedent for regulators and courts.
Although employment laws differ between countries, Uber’s defence in workers’ rights cases is usually the same: it claims to be a technology, rather than transportation, company, acting as an intermediary between drivers and passengers. The fact that a panel of six justices of the UK’s highest court has unanimously rejected this absurd assertion is likely to be persuasive for courts around the world grappling with the same issue.
In the US, there are multiple definitions of “employee” across state and federal laws. However, the courts often consider the control a company exerts over a worker as a key factor when deciding whether that worker is entitled to employment rights or not. So, the UK Supreme Court’s extensive discussion of how Uber controls its drivers will likely be helpful to drivers arguing their cases across the pond.
In Australia, Uber has successfully defended itself against several legal challenges concerning workers’ rights (although it recently settled the most high profile of these after being scolded by a judge in federal court). However, Sheryn Omeri, one of the lawyers representing Uber drivers in the UK, who also practices law in Australia, suggests the UK Supreme Court’s decision will be influential on future Australian cases. UK court decisions are “the obvious choice for Australia to look to”, she told me.
It is important to note that when it comes to regulating the “gig economy”, the judiciary, workers and trade unions cannot act alone. Governments must force companies to obey the law by way of prosecutions and fines. Indeed, the UK government has a particularly abysmal record on this, making the role of trade unions all the more important. But with last week’s decision, the exploitative “gig economy” business model has been dealt a decisive blow, and for that, couriers, drivers, and unions worldwide should celebrate.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.
As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer
Uber’s UK ruling could have implications for gig economy startups
The UK’s Supreme Court has rejected Uber‘s appeal against an earlier ruling that said its drivers must be classified as workers, a result that may have a significant impact on other gig economy companies.
The decision—which cannot be appealed—means thousands of UK Uber drivers cannot qualify as being self-employed, entitling them to both minimum wage and holiday pay. The ridehailing company could now face paying substantial compensation to its drivers.
The ruling, which criticized Uber for sidestepping UK labor laws to withhold benefits, could influence other battles between gig workers and the companies that hire them. Earlier this month, the Independent Workers’ Union of Great Britain appealed against a court decision preventing riders for food delivery startup Deliveroo from engaging in collective bargaining due to their self-employed status. Deliveroo, which is backed by investors including Durable Capital Partners and Amazon, is looking to go public this year.
“Employees should benefit from improved rights; however, employers are likely to face increased costs of labor and disruption to their business models, which have proven to achieve rapid scale with gig workers,” said PitchBook analyst Nalin Patel. “The ruling may also now set a precedent in the UK and force other gig economy startups that utilize the self-employed contractor model to rethink how they operate in the region moving forward.”
Former Uber drivers James Farrar and Yaseen Aslam originally won their tribunal against Uber in 2016. Uber appealed the decision, but it was upheld in 2017, and again in 2018 by the High Court.
“This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery,” said Farrar, who is also a general secretary with the App Drivers and Couriers Union. “Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.”
In a statement, Uber’s regional general manager for Northern and Eastern Europe, Jamie Heywood, said the court decision was focused on a “small number of drivers” who used the app in 2016. Since then, he said the company had made changes to its business, providing free insurance in case of sickness or injury. He added: “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”
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