Lyft, Uber Washington Drivers Get Benefits, No Employee Status

Drivers for rideshare companies such as Lyft Inc. and Uber Technologies Inc. will be guaranteed minimum per-trip pay rates, paid sick leave, and workers’ compensation without being deemed employees, under a new Washington state law.

The measure, HB 2076, which Gov. Jay Inslee (D) signed into law Thursday, reflects a compromise among rideshare companies, drivers, and the Teamsters-affiliated Drivers Union—ensuring the companies can classify drivers as independent contractors while requiring them to provide benefits traditionally reserved for employees.

But Teamsters leader Sean O’Brien, who recently took over as the union’s international president, opposed the legislation and urged Inslee to veto it, telling Bloomberg News earlier Thursday it was a bad compromise and that the drivers should be classified as employees.

This measure “represents a compromise on a set of tough issues, how we legally classify the work status of gig drivers in Washington. This is a matter of national attention and one I address with caution,” Inslee said while signing the bill. “The bill before us establishes immediate and meaningful gains for these workers.”

Inslee added that more work is needed to give drivers fuller access to benefits such as unemployment insurance. He vetoed one section of the bill that exempted transportation network companies such as Lyft and Uber from being classified as common carriers, which he said raised concerns about the duty of care for passenger safety.

The new law takes effect in phases, beginning Dec. 31 with minimum pay rates, among other provisions. The measure also prevents cities and counties from imposing regulations or taxes beyond what the state requires.

The Washington deal, the product of years of negotiations between Lyft, Uber, and union representatives, bears similarities to the Proposition 22 ballot measure that passed in California with heavy financial support from rideshare and delivery app companies. The California measure, now tied up in litigation, guarantees workplace benefits for drivers while denying them employee status and the legal rights afforded by it.

Similar attempts at a legislative compromise in Connecticut and New York have failed, with worker advocates arguing that drivers need the full protections of employee status, including a minimum hourly wage and unemployment insurance benefits.