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After $200 million California brawl, Uber and Lyft’s gig worker fight is far from over |



Uber and Lyft scored a big win when Californians voted in favor of their ballot measure that allows them to continue treating their drivers as independent contractors rather than employees in the state. But there’s likely a long, turbulent road ahead as the companies confront the issue nationally.

The two ride-hailing giants, along with DoorDash, Instacart, and Uber-owned Postmates, spent more than $200 million to pass Proposition 22 or Prop 22 in California — a reaction to a state labor law, Assembly Bill 5 or AB-5, that went into effect on January 1 and codifies an “ABC” test to determine if workers are employees who are entitled to labor protections and benefits.

Classifying on-demand workers as employees has long been viewed as a potential existential threat to the business model popularized by Uber and Lyft. The companies scaled their businesses with massive fleets of workers who are treated as independent contractors, shirking the responsibility of costly benefits entitled to employees, such as a minimum wage, overtime, paid sick leave and unemployment insurance.

Under Prop 22, the companies will continue to treat drivers as independent contractors while granting some drivers benefit concessions, but not the full suite of protections that they would likely have gotten had the measure not passed.

Beyond California

After their Election Day victory, the companies were quick to signal they would pursue models similar to Prop 22 outside the state, underscoring how their business models remain on unsteady ground.

Uber CEO Dara Khosrowshahi said on the company’s November 5 earnings call that, “you’ll see us more loudly advocating for new laws like Prop 22,” calling it an “IC+ model,” short for independent contractor plus some benefits. He added “we want to have a dialogue” with governments in other states. Lyft CEO Logan Green echoed that sentiment days later on its earnings call, saying it is “continuing to engage with policymakers across the country.”

Jenny Montoya Tansey, policy director at the Public Rights Project, a public interest legal nonprofit that has been involved with AB-5 enforcement efforts in California told CNN Business that it is “not surprising to me to hear that Uber and Lyft are now saying they want to take the fight to other states — because they’re going to need to.”

Many other states have some form of ABC test for unemployment insurance eligibility, with several states determining that Uber and Lyft drivers are owed such coverage. Massachusetts, which has a law similar to California’s AB-5, is currently challenging Uber and Lyft over how they classify workers, which the companies have indicated they intend to fight.

Montoya Tansey said that the attention that the AB-5 law, and the ensuing enforcement action, received “shone an even sharper light for other states and cities around the country to start thinking about pursuing these companies on worker rights.”

“They had a good month,” she added. “But I don’t think that necessarily means things are always going to be good for them in the future.”

Shannon Liss-Riordan, a Boston-based lawyer who has been challenging Uber and Lyft over worker classification through various lawsuits for seven years, told CNN Business that it is clear the gig economy companies have been “emboldened from what they were able to pull off in California.”

Californians were bombarded with the Yes on Prop 22 messaging, as the companies waged an aggressive campaign of television ads, in-app messages, and confusing mailers.

“It really was information warfare — and, given the war chest the gig economy companies had and the access to so many people, they were able to win that information war,” added Liss-Riordan, who secured a $20 million settlement from Uber in 2019 in a class action lawsuit over alleged misclassification of some California and Massachusetts drivers.

(In a statement at the time, a spokesperson said the company “has changed a lot since 2013,” citing improvements in the app for drivers, and that it would “continue working hard to improve the quality, security and dignity of independent work.”)

Even with the passage of Prop 22, Uber and Lyft still have to answer to a lawsuit brought by the California Attorney General and a coalition of city attorneys over driver classification, for which they may be held responsible for violations of the AB-5 law up until Prop 22 takes effect; they’re also facing a suit from the California Labor Commissioner, which the companies have pushed back on.

A new administration

President-elect Joe Biden and Vice President-elect Kamala Harris called for “no” votes on Prop 22, with Biden saying the gig economy companies “are trying to gut” the AB-5 law and calling it “unacceptable.” Harris similarly took issue with the companies trying to “exempt themselves from providing essential protections and benefits.”

How gig workers should be classified is still up for debate at the federal level. But, the Trump administration’s Department of Labor proposed a rule in September under the Fair Labor Standards Act, or FLSA, that would make it easier for the companies to classify drivers as independent contractors. The FLSA establishes baseline standards like minimum wage and overtime for employees, and the proposed rule “would make it easier for corporations to cheat their workers and avoid minimum wage and overtime protections,” according to the National Employment Law Project.

William Gould IV, a Stanford University law professor and former National Labor Relations Board chairman, told CNN Business that while “it’s early days,” the companies are “likely to face some kind of pushback at the national level. We’ll see some tip-off when we see who is appointed Secretary of Labor.”

Biden has also endorsed the Protecting the Right to Organize Act or Pro Act, which provides new protections to workers around the right to organize. It expands who has the right to unionize by using an “ABC” test to determine if workers are employees. He has pledged to appoint members to the NLRB “who will protect, rather than sabotage, worker organizing, collective bargaining, and workers’ rights to engage in concerted activity whether or not they belong to a union.”

Meanwhile, the companies will continue to push for a “third way,” something in between independent contractors and employees. That approach includes a portable benefits fund that workers can put towards health insurance or paid time off. Notably, among those who have advocated for a “third way” is Seth Harris, who is part of Biden’s transition Labor team and was acting Secretary of Labor during part of the Obama administration.

Vanessa Bain, a California-based gig worker and founder of a non-profit Gig Workers Collective, said she doesn’t expect the fight for proper benefits and protections to get much easier.

“It is not as simple as ‘Biden is President.’ It is still going to be an uphill battle,” she told CNN Business, while adding that the national fight is what’s next. “We’re in a situation where, excluding legal remedies to Prop 22, we really need to go above its head and go to the federal level.”

Bain said her organization is talking to allies to strategize on what’s next.

“We absolutely took a major L – it doesn’t feel good but I do feel more committed than ever to the work of ensuring gig workers are properly classified,” added Bain.

A deal with labor?

Lyft cofounder and president John Zimmer told the Los Angeles Times after Prop 22’s passage that he’s open to striking a deal with labor unions in California, something that could help bolster the positioning of the companies when pushing a Prop 22-like model in other states.

“I’d rather stand in the same room talking across the table than not talking to each other,” Zimmer said in an interview on CNN International’s First Move with Julia Chatterley last week, adding that the company has spoken with unions in recent years but never reached a deal. “I’m hopeful we can continue those conversations.”

In the past, companies have expressed interest in sectoral bargaining — which would allow drivers to organize on an industry-wide basis — while remaining independent contractors.

Rome Aloise, International Vice President of Teamsters, told CNN Business said it talked with Uber and Lyft for several years but never got close to a deal. The sticking point has been employee status and striking something good for drivers, that would also protect “our traditional companies from being sucked into this big abyss.” Teamsters represents hundreds of thousands of UPS workers, for example.

“We stand, and will continue to stand, with rideshare drivers in their fight to improve working conditions, pay and win a voice at work,” said Mary Kay Henry, the president of the Service Employees International Union, in a statement.

Teamster’s Aloise said there’s interest in talking — “you can’t find a solution if you’re not talking” — but not to expect anything imminent.

“I don’t want to give the impression there’s something out there that could be easily done, I don’t think we’re any place close at this point,” Aloise said. “We haven’t had any discussions since Prop 22 passed, I can tell you that.”

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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.

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As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer




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Uber’s UK ruling could have implications for gig economy startups




Former Uber drivers Yaseen Aslam and James Farrar first brought their case against Uber in 2016
(Carl Court/Getty Images)

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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