Uber and Lyft have California playbook to fight proposed US rules on workers

Uber, Lyft, and other small-economy businesses face a new challenge from the Biden administration: using contract workers, but as they prepare to fight in Washington, they might turn to a lobbying manual. which helped them secure a decisive victory over California. regulators last year.

US President Joe Biden campaigned on the promise to provide legal protections and benefits to construction workers, who, as independent contractors, typically do not have access to unemployment insurance, sickness benefits and health insurance. US Secretary of Labor Marty Walsh said last week: “Many construction workers should be classified as employees.”

In Congress, Democratic lawmakers are pushing for a union-backed labor bill, the PRO Act, which is in part inspired by a California law called AB5 that reclassified most construction workers as ’employees.

AB5, however, is no longer the law in California for hail and food delivery workers, while it remains in effect for other freelancers. Uber Technologies Inc (UBER.N), Lyft Inc (LYFT.O), DoorDash Inc (DASH.N) and Instacart, whose business model is based on a flexible workforce at low cost, have launched a campaign of 205 million dollars that overturned the law for the industry last November.

Among the tactics perfected in the fight in California, Labor companies used their apps to reach out to voters and drivers through messages, emails, mailed flyers, billboards, radio, and advertisements in line. They also urged workers at their platforms to denounce AB5.

Companies have threatened to end the ubiquitous food and hail delivery services that many consumers have become accustomed to during the pandemic if the drivers were classified employees.

The looming struggle over the status of workers in the odd-job economy comes amid a larger debate over business regulation. The federal government has exercised a light hand in regulating Uber, DoorDash and other companies in the digital economy by redefining traditional definitions of work, communications or retail. Now, Democrats and Republicans in Washington, for different reasons, are calling on the government to exercise more control over one-off startups that dominate important sectors of the economy.

Uber, Lyft, DoorDash and Instacart have so far this year spent $ 1.3 million lobbying the Biden administration and members of the US House and Senate, according to data from the Center for Responsive Politics. In 2020, they spent around $ 5.7 million, more than half of which came from Uber.


Less than two weeks after Biden won the White House in November, companies banded together to form the App-Based Work Alliance, a Washington-based advocacy group. The group is now promoting statements from drivers and food delivery people saying they want to remain independent contractors and don’t want the PRO law because they fear it will deprive them of the opportunity to make money according to their own. own schedule for a few hours a week. .

Companies cite polls to say the majority of their workers, mostly part-timers, don’t want to be classified as employees.

While the surveys show overwhelming support for the remaining independent contractors, they also follow years of threats by companies to eliminate work opportunities if workers become employees. Some of the surveys are co-authored by researchers with connections to the company, sponsored by the companies, or supplemented with non-scientific methodologies by a blogger who sent emails and social media posts.

For example, a study by the National Bureau of Economic Research listed Uber Chief Economist Jonathan Hall as a co-author, and a 2020 survey of 1,000 drivers by Benenson Strategy Group and GS Strategy Group was funded by Uber. Uber said that although it paid for the survey, the survey was conducted by reputable research groups.

In California, the concert companies did not simply oppose any change in their employment practices. Instead, they campaigned for compromise, pushing for changes to labor laws to allow workers to remain entrepreneurs while receiving more modest benefits than required for employees.

DoorDash said its workers worked an average of just four hours a week, while Uber said 37% of its U.S. drivers and 58% of its delivery people worked an average of less than 10 hours a week in the last quarter of 2020. concerts would become impossible in an employment model.

But Uber data from the fourth quarter of 2019, before the pandemic, also showed California drivers working 25 or more hours a week made more than 60% of all trips in the state, suggesting that drivers on time full do most of the work. .


Gig Workers Rising, a workers ‘group that advocates for greater benefits and says it does not receive financial support from worker groups, rejected the companies’ compromise proposal in a statement.

“(The proposal) is not a model for workers’ rights, it is a plan of action for large companies and investors looking to maximize their profits,” the group said in a statement.

AB5’s defeat for app-based concert workers in California was a blow to organized labor groups, California Democrats and even Biden and Vice President Kamala Harris, who had urged voters in the State to reject the concert industry’s proposal.

Although AB5 is gone, stage workers in California now have access to certain benefits, including health care subsidies, accident insurance, and minimum wage while passengers are in their cars. These benefits are significantly less costly to companies than employee benefits, and worker groups say drivers don’t know how to access them.

As the fight for the rights of small workers intensifies nationally, companies could roll out similar measures.

“At the moment there is no call to action, but if that were to happen, for example if a real law or a voting measure were proposed, we would certainly activate our pilot base,” he said. said a Lyft spokesperson.

Uber and DoorDash said they don’t have specific plans for an awareness campaign at this time. In August, Uber emailed all of its drivers across the country, outlining its proposal to change the law to combine independent contractor status with certain benefits.

(This story corrects to reflect that AB5 is no longer California law for hail and food delivery workers, instead AB5 is no longer California law for anyone, paragraph 5; also corrects the paragraph 20 to reflect that AB5 was defeated “for application-based concert workers.”)

Our standards: Thomson Reuters Trust Principles.

About Christopher Easley

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