Gig economy firms like Uber and Lyft are supporting state laws that would definitively define their workers as independent contractors, even if that means creating a union, The New York Times (NYT) reported Wednesday (June 9).
Both rideshare firms are backing laws in numerous states, especially in New York, where the initiative is being strongly entertained in the face of labor group oppositions, according to NYT. The state’s legislative session ends this week.
The negotiations have led to both companies considering giving workers bargaining rights and some perks, but without extending the full protections and benefits that employees receive, NYT reported.
A shortage of drivers started affecting Uber and Lyft in April as COVID-19 restrictions and lockdowns started to ease after many drivers dropped their gig jobs during the pandemic. Gig drivers were down about 40 percent, prompting both firms to offer incentives to drivers to rejoin the platforms.
Gig drivers in the U.K. are now getting paid time off and a minimum base wage after a U.K. Supreme Court ruling earlier this year. Uber had appealed the rulings of a lower court.
The ruling could end up being a precedent for the wider gig economy and was a setback for Uber, where London is one of its busiest cities.
In the U.S., California passed a law in 2019 that gave gig workers the legal standing of employees, but a successful ballot initiative — Proposition 22 — exempted Uber and Lyft, and thus kept the definition of workers as independent contractors. Both companies spent about $200 million on the measure, NYT reported.
Gig workers in California who drive for Uber, Lyft and other rideshare and delivery platforms filed a lawsuit in January in the state’s Supreme Court looking to overturn Prop 22, which was upheld by a 58 percent majority on Election Day in 2020. The lawsuit claims that the new mandate is unconstitutional because it limits the government’s ability to empower workers to form unions and prevents drivers from getting workers’ compensation.
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