Lyft, Uber Drivers Struggle in Statehouses for Workplace Wins

State legislative proposals to mandate better pay and working conditions for Lyft and Uber drivers hit roadblocks again this year, including a governor’s veto in Minnesota, even as Washington expanded its one-of-a-kind ride-share driver benefits law.

For all the lawsuits, regulatory proposals, and advocacy targeting better treatment of gig workers, Washington is the only state where lawmakers have successfully legislated their way to driver benefits without a ballot measure.

The state’s 2022 law gave drivers higher pay rates as well as benefits such as workers’ compensation insurance and paid sick time. It was expanded this year to ensure access to unemployment insurance and paid family leave at the companies’ expense.

Central to the difficulty in writing legislation that drivers and unions—as well as Lyft Inc. and Uber Technologies Inc.—can support are the issues of worker classification and pay rates.

In Washington, the local Teamsters-affiliated Drivers Union agreed to accept independent contractor status as part of its law, despite objections from the Teamsters’ General President Sean O’Brien, who said drivers should be categorized as employees.

“We’ve been supportive of this for years, of this independence-plus-benefits concept,” but oppose bills that don’t affirm independent status, said Jeremy Bird, chief policy officer with Lyft. He pointed to surveys that suggest drivers prefer independence.

The fight over the traditional employee model is also playing out on the federal level at the US Department of Labor, which is finalizing a rule that could define more workers as employees, with all the related benefits and legal protections, including the right to unionize formally.

Classifying workers as employees under federal law would bring them under the protections of the National Labor Relations Act, which guarantees rights to unionize and collectively bargain. Drivers in many cities and states have only been able to organize more informally in groups like the Drivers Union, though they’ve worked alongside established organized labor.

State Rep. Liz Berry (D), who sponsored the 2022 gig workers bill in Washington, said the pace of federal change has simply been too slow.

“The drivers just wanted good pay and good benefits and deactivation protections,” Berry said. “They were tired of people in D.C. and others telling them to keep waiting because of the classification issues.”

Minnesota Veto

What appeared to be the next best state-level chance for significant new driver protections passed Minnesota’s legislature this year, in a session full of successful labor measures ranging from a non-compete ban to paid sick leave.

But unlike those other labor bills, the ride-share measure was unable to make it past the desk of Gov. Tim Walz (DFL). His May 25 veto cited high pay for drivers mandated in the bill that he said would increase prices and reduce transportation accessibility, concerns that were shared by Uber and Lyft.

Alongside the veto, Walz formed a task force to study the issue and make recommendations for 2024.

“Drivers are trying to do their best to make a living” with adequate, predictable income and safety protections, said Eid Ali, president of the Minnesota Uber/Lyft Drivers Association and a member of the governor’s task force. “So far that’s not the case. Those are the things we’re working on at the moment.”

“Our goal really is to find a solution,” said Freddi Goldstein, an Uber spokesperson who’s also on the Minnesota task force.

The bill Walz vetoed would have made Minneapolis the most expensive market for ride-share customers in the US, ahead of New York City and Seattle, according to Goldstein.

The Minnesota legislation avoided the perhaps even thornier issue of driver classification, simply stating that the bill didn’t change worker status.

The Minneapolis City Council also is considering an ordinance to mandate ride-share driver pay and protections against deactivation.

Stalled Out

Proposals in other state legislatures hit their own walls this year, much like they did in 2022.

In Colorado, a bill that died in committee would have required companies to provide drivers and riders detailed information about ride fees and how much drivers are paid.

Connecticut lawmakers considered a measure mandating pay rates for drivers, but it stalled after first being reduced to a task force.

In cases where compromise seems challenging, even staunchly pro-labor Democrats might be reluctant to pass legislation without direct buy-in from the likes of Uber and Lyft.

California’s AB 5 worker classification law passed in 2019 despite industry opposition, only to get tied up in litigation for years and eventually reversed by a ballot measure that ride-share companies favored.

Several competing proposals remain alive in Massachusetts, where a court blocked an industry-backed ballot measure on gig worker classification from going to voters in 2022. The ride-share and delivery-app industry also is trying the ballot measure strategy again. An industry coalition on Aug. 2 submitted multiple versions of a proposed 2024 ballot question to the attorney general for approval.

In the statehouse, the bills are a mix of labor-backed proposals that the industry opposes and industry-backed proposals that labor opposes, said Conor Yunits, spokesperson for the industry group Massachusetts Coalition for Independent Work.

One bill would set up a sector council approach to collective bargaining. Another would make drivers employees and mandate other workplace standards. Others would replicate Washington’s independent-with-benefits model or set up portable benefits accounts.

How Washington Did It

Washington’s success at passing its bill was shaped by some unique circumstances.

After months of talks with drivers and industry representatives, much of it via Zoom video conference because of Covid-19, Berry said the week of Thanksgiving 2021 brought a breakthrough, when she “finally pushed through all the red tape at Uber and met the woman who could do a deal.”

She and Uber’s Ramona Prieto “realized the things the worker side wanted were not dealbreakers for her, and the things she wanted were not dealbreakers for the drivers.”

Prieto didn’t respond to a request for comment.

Background pressure from an industry-proposed ballot measure and Seattle’s existing ride-share driver ordinance helped spur negotiations, Berry said. The Drivers Union was also a “willing labor partner” interested in reaching a deal.

That included willingness to set aside worker classification.

“Different drivers have different opinions on that issue,” said Kerry Harwin, spokesman for the Teamsters-affiliated Drivers Union in Washington. “But ultimately what seems the most important is the kind of job protections and fair pay that we believe any worker deserves.”

Berry said she supports employee status for drivers but would primarily leave it to the federal government to draw the lines between an independent contractor and an employee.

“I began to do this funny thing: what if we call them bananas or pineapples?” Berry said, recalling her negotiations on the 2022 legislation. “I don’t care what we call them, let’s just get them these protections.”