Lawmakers Look to Spruce Up Gig Work Rather Than Replace It

Last week in Washington, the Democratic-controlled U.S. House passed a sweeping labor law overhaul that would make it much easier for gig workers to prove they’re actually employees with full-fledged union rights, rather than contractors as their bosses claim. Two days later in Democratic-ruled Connecticut, state lawmakers met by video conference to consider a less adversarial approach: Creating a special industrywide version of bargaining for gig workers, without making them employees.

“It is clear that these platform apps are here to stay,” state Senator Julie Kushner, a former United Auto Workers regional director who now co-chairs the Connecticut legislature’s Labor and Public Employees Committee, said in an interview. “What’s really important is that we look at, how do we adjust so that we are getting the benefit of the platform, and the approach to work, but also making sure that we are not ignoring workers’ rights in the equation?”

The legislative proposal in Connecticut, spearheaded by a worker guild funded by Uber Technologies Inc. and Lyft Inc., is a stab at the sort of compromise that some gig executives and union leaders have been seeking: boosting gig workers’ rights, without granting them the full suite of protections that employees get under U.S. law. It reflects the eagerness of some lawmakers to find common ground between tech and labor and avoid the sort of pitched battle that’s been raging in California and reverberating in boardrooms, union halls and government offices around the world. This week, Uber announced that it would reclassify its 70,000 U.K. drivers as “workers” eligible for minimum wage and paid vacation, among other benefits, after losing a national Supreme Court case.

Harmony hasn’t materialized so far in Connecticut: The companies don’t support the current proposal. In testimony submitted last week, Uber said the bill as written “raises many concerns and creates a new, incredibly complicated process without the necessary due diligence and input from all stakeholders.” Lyft, the second-largest ride-hailing company in the U.S, said the bill could harm “the flexibility and control that drivers currently enjoy.”

Uber and Lyft have floated similar “sectoral bargaining” concepts in the past. The draft Connecticut legislation resembles a proposal that, according to people familiar with it, was circulated last year by Lyft in California, where some industry and labor leaders tried unsuccessfully to reach a compromise shielding the platform companies from the state’s crackdown on the use of contractors. In the end, companies including Lyft, Uber, DoorDash Inc., and Instacart Inc. spent a total of $200 million propelling a successful ballot initiative in California to retain contractor status for their drivers while extending them a new, limited set of perks. That electoral victory in November, though, also coincided with Democrats taking the White House and (with January’s Senate runoffs) narrowly securing majorities in both houses of Congress, creating fresh risk that federal agencies or lawmakers will try to force companies to reclassify workers as employees.

U.S. President Joe Biden has endorsed proposals like the one that recently passed the U.S. House, which would make it much more difficult to claim workers aren’t employees. Lyft President John Zimmer said last month that he’s hopeful Biden can be brought around to a compromise and that having examples at the state level helps.

Lyft, Uber and other gig companies have been engaged in talks about potential compromises, including bargaining rights, with labor groups such as the New York State AFL-CIO and the International Association of Machinists’ Independent Drivers Guild, the group funded by Lyft and Uber that’s spearheading the legislative push in Connecticut. Uber helped create the Independent Drivers Guild in 2016 with the Machinists union to advocate for New York drivers without challenging their classification as contractors.

“Drivers love to be independent contractors,” Sohail Rana, an organizer for the IDG, told Connecticut’s labor committee last week during the video hearing. “Drivers want to be independent contractors while still able to sit at the table.”

Read more: The Gig Economy Is Coming for Millions of American Jobs

The bill in Connecticut, headed for a committee vote next week, aims to create the nation’s first “sectoral bargaining” system for gig workers. Representatives of labor and management from multiple companies would meet to hash out proposed industrywide standards in areas like pay and safety.

Under the proposed legislation, app-based transportation and delivery drivers could elect unions to represent them in the talks, companies would be banned from retaliating for union activity, and an arbitrator could be brought in to break an impasse. A new surcharge on trips would fund drivers’ benefits and their unions. If labor and management reached a deal and workers voted to approve it, a state agency would decide whether to implement the new terms, a mechanism designed to avoid issues with federal antitrust law, which restricts independent contractors from collectively negotiating their pay directly.

Among the objections Uber raised to the bill, the company said it fails to explicitly say the drivers it covers would be considered contractors rather than employees. A spokesperson for Uber declined to elaborate on the testimony. Lyft spokesperson Julie Wood said the company is “glad this conversation is starting in Connecticut.”

Lawmakers will hold further discussions with companies about the bill, said state Representative Robyn Porter, the labor committee’s co-chair. “The hope is that we can have everyone feeling like they’re in a happy place,” she said, “or a place they can live with.”

Some legal experts said the Connecticut bill, in its current form, already offers much less than drivers could get if deemed employees. The range of issues companies would be required to negotiate is much narrower than in traditional union bargaining, said Charlotte Garden, a law professor at Seattle University. “This bill has some serious shortcomings,” she said.

Gig workers would be better served by state and federal action to deem them employees with full workplace protections, and the Connecticut law is “unlikely to help,” said Brishen Rogers, a law professor at Temple University in Philadelphia.

One of the Connecticut bill’s provisions would prevent local governments from imposing their own rules, according to Andrew Greenblatt, who directs the Independent Drivers Guild’s benefits fund and helped draft the proposed law, as well as several similar proposals in other states that haven’t yet been introduced.

Supporters of the Connecticut proposal said it would improve the status quo. Drivers “would get to have a voice, where they have none now,” said Sal Luciano, president of the Connecticut AFL-CIO.

The Independent Drivers Guild’s executive director, Brendan Sexton, said the proposal better reflects the current economy than the 86-year-old National Labor Relations Act that governs collective bargaining. “What the folks in Connecticut are doing now is creating a just system that not only gives a seat at the table for the workers, but it has a seat for the companies, too,” he said, “to coexist peacefully in creating an industry that benefits everybody.”

Deals designed to make marginal improvements to gig work could fuel further displacement of employment by substandard gigs, according to David Weil, who ran the federal Wage and Hour agency under President Barack Obama and is now dean of Brandeis’ social policy and management school.

“I find it a troubling way to set public policies,” Weil said in February, “by allowing powerful companies to decide what part of our historic protections they will adopt and which ones they will decide are not in their interest.”

To contact the reporter on this story:
Josh Eidelson in Palo Alto at jeidelson@bloomberg.net

To contact the editors responsible for this story:
Weston Kosova at wkosova@bloomberg.net

Mark Milian, Andrew Pollack

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