Uber

Gig firms fight Biden’s Labor pick

March 22, 2023 By Jordan Fabian 3 Comments

Uber, Lyft and others raise concern over Julie Su’s stance on worker classification.

A group representing Uber, Lyft and other app-based services is raising concern about President Biden’s nominee to lead the Labor Department over her stance on worker classification rules.

In a letter to Biden dated Monday, the Flex Assn. asked that the nominee, Julie Su, explain how she would implement a proposed rule that could make it easier for workers to be considered employees rather than independent contractors “in a manner that protects independent work.”

It also requested that the Labor Department “delay action” on the proposal until the Senate confirms a nominee for secretary.

Gig companies such as Uber, Lyft, DoorDash and Instacart rely heavily on contractors to staff their fleets and have closely scrutinized the rule.

The letter illustrates the battle lines around Su’s nomination to replace Marty Walsh as Labor secretary. Business groups and Republicans have criticized her support for measures affecting the gig economy, while she has earned plaudits from Democrats and labor groups for her stance on workers’ rights.

The White House sent Su’s nomination to the Senate last week, allowing the confirmation process to begin.

Flex Chief Executive Kristin Sharp wrote to Biden that the group is concerned that Su “does not fully appreciate the potential impact” of the measure and “has a record indicating an oppositional approach to policymaking that carries real implications as she seeks to be elevated to serve as the department’s primary policymaker.”

A White House official defended Su, saying that, if confirmed as Labor secretary, she would ensure workers receive all rights and protections available to them under federal law. Proper classification of workers would benefit the economy and guarantee they are eligible for unemployment insurance, overtime and minimum wage, the official said.

Su led California’s labor department before joining the Biden administration. She supported a law making it more difficult for companies to classify workers as contractors, which allows businesses to save millions of dollars but deprives workers of protections such as minimum wage and benefits.

Sharp said the California law, which is being challenged in federal court, “wreaked havoc across multiple industries.” While stopping short of opposing Su’s nomination, Sharp demanded that Su explain her views on the policy during Senate confirmation “so that stakeholders can properly evaluate their position on her nomination.”

The Biden administration issued a proposal on independent-contractor status in October that would undo a Trump-era standard that made it easier for companies to hire people as contractors, which critics said left workers vulnerable to misclassification. The proposed rule isn’t final yet.

The proposal imposes a multifactor test that considers all elements of the working relationship equally in determining whether a worker is an independent contractor or an employee. The Trump-era test gave more weight to a person’s degree of control over their work and the opportunity for profit and loss.

Click here to read the full article at LA Times

Filed Under: Top Stories Tagged With: Biden, Lyft, Uber

California Court Rules for Uber, Lyft in Ride-Hailing Case

March 15, 2023 By Adam Beam 3 Comments

App-based ride hailing and delivery companies like Uber and Lyft can continue to treat their California drivers as independent contractors, a state appeals court ruled Monday, allowing the tech giants to bypass other state laws requiring worker protections and benefits.

The ruling mostly upholds a voter-approved law, called Proposition 22, that said drivers for companies like Uber and Lyft are independent contractors and are not entitled to benefits like paid sick leave and unemployment insurance. A lower court ruling in 2021 had said Proposition 22 was illegal, but Monday’s ruling reversed that decision.

“Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22,” said Tony West, Uber’s chief legal officer. ”We’re pleased that the court respected the will of the people.”

The ruling is a defeat for labor unions and their allies in the state Legislature who passed a law in 2019 requiring companies like Uber and Lyft to treat their drivers as employees.

“Today the Appeals Court chose to stand with powerful corporations over working people, allowing companies to buy their way out of our state’s labor laws and undermine our state constitution,” said Lorena Gonzalez Fletcher, leader of the California Labor Federation and a former state assemblywoman who authored the 2019 law. “Our system is broken. It would be an understatement to say we are disappointed by this decision.”

The ruling wasn’t a complete defeat for labor unions, as the court ruled the companies could not stop their drivers from joining a labor union and collectively bargain for better working conditions, said Mike Robinson, one of the drivers who filed the lawsuit challenging Proposition 22.

“Our right to join together and bargain collectively creates a clear path for drivers and delivery workers to hold giant gig corporations accountable,” he said. “But make no mistake, we still believe Prop 22 — in its entirety — is an unconstitutional attack on our basic rights.”

The California Legislature passed a law in 2019 that changed the rules of who is an employee and who is an independent contractor. It’s an important distinction for companies because employees are covered by a broad range of labor laws that guarantee them certain benefits while independent contractors are not.

While the law applied to lots of industries, it had the biggest impact on app-based ride hailing and delivery companies. Their business relies on contracting with people to use their own cars to give people rides and make deliveries. Under the 2019 law, companies would have to treat those drivers as employees and provide certain benefits that would greatly increase the businesses’ expenses.

In November 2020, voters agreed to exempt app-based ride hailing and delivery companies from the 2019 law by approving a ballot proposition. The proposition included “alternative benefits” for drivers, including a guaranteed minimum wage and subsidies for health insurance if they average 25 hours of work a week. Companies like Uber, Lyft and DoorDash spent $200 million on a campaign to make sure it would pass.

Three drivers and the Service Employees International Union sued, arguing the ballot proposition was illegal in part because it limited the state Legislature’s authority to change the law or pass laws about workers’ compensation programs. In 2021, a state judge agreed with them and ruled companies like Uber and Lyft were not exempt.

Monday, a state appeals court reversed that decision, allowing the companies to continue to treat their drivers as independent contractors.

The ruling might not be the final decision. The Service Employees International Union could still appeal the decision to the California Supreme Court, which could decide to hear the case.

Click here to read the full article in AP News

Filed Under: Top Stories Tagged With: California Courts, Legislature, Uber

With Mask Mandate Gone, How Can Uber and Lyft Drivers Reduce Their COVID Risk?

July 29, 2022 By Chronicle Advice Team 4 Comments

Welcome to Pandemic Problems, an advice column from The Chronicle’s engagement reporters that aims to help Bay Area residents solve their pandemic and post-pandemic conundrums — personal, practical or professional.

As COVID evolves into an endemic issue, we know readers are trying to navigate the “new normal.” Send your questions and issues to pandemicproblems@sfchronicle.com.

Today, The Chronicle’s Kellie Hwang fields a question from a reader who is concerned about the COVID risk to ride-hailing drivers in the Bay Area.

Dear Advice Team:

Drivers can spend several hours a day transporting passengers. Lyft and Uber used to require passengers to wear masks. That mandate has stopped. Passengers now have the option. Many still do, but lots do not. That puts drivers at risk of catching COVID.

I liken the risk to a doctor’s office visit. Doctors have likely been double vaccinated and boosted, and continue to wear a mask. But they ALSO require visiting patients to wear a mask. When I visited a hospital recently for a routine blood test, I was required to double mask. So if doctors and hospitals require masks of patients, but Lyft and Uber do not, that tells me that drivers are at risk of catching COVID.

I recently started driving again. But I double mask and keep as many windows as I can open. Often I can open at least three if my passenger closes theirs. I also carry hand wipes to wipe my hands if I think I need it. Beyond this, what advice would you have for Lyft and Uber drivers?

Dear Reader:

It makes sense that ride-hailing and taxi drivers would be concerned about COVID safety, considering the tight quarters they share with their passengers.

While cases from the highly transmissible BA.5 subvariant appear to have peaked in California, they still remain high, and as you noted, masks are no longer mandatory in most places — these days, people are required to wear them mainly in health care settings.

Also, traveling in vehicles can raise your risk of contracting the coronavirus, according to experts contacted for this column.

“The more people one is in contact with in an enclosed space, the more likely it is one will be exposed to and possibly infected,” wrote Art Reingold, a UC Berkeley epidemiologist, in an email — although, he added, “No one can quantify that risk with any precision.”

Abraar Karan, an infectious disease doctor at Stanford, said the close contact nature of being inside a car can be enough to spread the virus if a passenger is contagious.

But that doesn’t mean drivers can’t lower their risk through tried-and-true methods — as UCSF infectious disease expert Peter Chin-Hong calls them, the “ABCs of maximal COVID protection.”

• “A” stands for the air you want to ensure is as clean as possible.

That includes wearing a high quality mask, such as an N95, KN95 or KF94 mask.

“This also means maximizing the ventilation in the car,” Chin-Hong wrote in an email. “Studies have shown that slightly opening the opposite windows to create a wind barrier was most effective if you can’t crack open all the windows.”

Turning on the air conditioning is OK, as long as you aren’t using the recirculated air function.

“Fresh air is a million times better,” Chin-Hong added.

If a passenger is unmasked and doesn’t want their windows open, Chin-Hong said that as long as it’s a shorter trip and the driver is able to open the front windows, it should be a relatively safe situation.

He stressed that passengers should sit in the back, and ideally diagonal from the driver if possible.

• “B” is for boosters and being up to date on your COVID vaccines.

Vaccinations and boosters are “probably the most important thing you can do if you want to lower your chance of infection, and especially if you want to prevent getting seriously ill,” Chin-Hong said.

Reingold also stressed that “the most important precaution is being vaccinated and boosted.”

If you’re a parent, you should also get your children vaccinated so they are protected if you become exposed on the job, Chin-Hong said.

• “C” is for COVID testing.

According to the Centers for Disease Control and Prevention, you should take a test if you have any COVID symptoms or if it’s been at least five days after a known or suspected close contact to COVID-19. Other reasons to take a test can be found here.

If you test positive, isolate for five days. Find the CDC’s full isolation and quarantine guidelines here.

If you put all of these risk-mitigation strategies in place, experts say you can lower your risk considerably while driving.

Click here to read the full article in the SF Chronicle

Filed Under: Trending News Tagged With: California Politics, Lyft, mask mandates, Uber

California’s Work Rules Sabotage the Gig Economy

January 1, 2019 By Steven Greenhut 2 Comments

An anti-technology movement from early 19th century Britain has long been part of our lexicon. Luddites were knitters who destroyed textile machines to protect their jobs. Today the term applies to anyone who fights a crusade against the modern economy.

Original Luddites weren’t against technology per se, Smithsonian magazine explained, but only attacked manufacturers “who used machines in what they called ‘a fraudulent and deceitful manner’ to get around standard labor practices.”

California’s modern-day Luddites don’t commit acts of violence against Google, Uber, Amazon and other firms that have shaken up the existing economic order. No one is toasting cellphones in bonfires or sabotaging Federal Express delivery vans, but these New Luddites have used the courts and the legislative process to throw that figurative wrench in the machine. Indeed, the biggest redoubt of Luddite-ism appears to be the California Supreme Court, which in April issued a ruling that has threatened to grind California’s high-tech economy to a halt.

In Dynamex Operations West, Inc. v. Superior Court, the court didn’t directly target these new technologies or business models, but clamped down on the way companies use independent contractors rather than full-time employees as a means to stay flexible and competitive in the marketplace. As Chief Justice Tani Cantil-Sakauye wrote in the unanimous ruling, “When a worker has not independently decided to engage in an independently established business but instead is simply designated an independent contractor…there is a substantial risk that the hiring business is attempting to evade the demands of an applicable wage order through misclassification.”

The case centered around a package-delivery firm, Dynamex Operations West, which turned its full-time staff into contractors. Obviously, when companies use contractors they need not pay them benefits and are not subject to hourly work rules, wage requirements and the host of labor regulations the state applies to permanent workers. The court tossed out the old, flexible way of determining whether a worker is a contractor or employee and imposed a strict new “ABC Test” for deciding such matters.

Under the new standard, California firms that want to classify their workers as contractors must meet all of these terms: The worker is outside the control of the employer for the work performed; the worker performs work that is outside the company’s normal scope, such as a freelancer who does public relations for a tech firm; and the worker is engaged in an independent business enterprise, perhaps having his or her own LLC. One need not be a labor-law expert to realize how this threatens many burgeoning new business models including Transportation Network Companies such as Uber to old-line industries such as Realtors and hairdressers.

Growing economies are dynamic. There’s no way to lock anyone’s job into place (outside of government work). One of California’s long-standing problems—a key reason for its sky-high poverty rates—is that its labor regulations read like something from the Industrial Revolution. The state imposes burdensome regulations regarding everything from work breaks to overtime. That might be fine on the factory floor, but the rules stifle innovation—and make it far tougher for companies to survive. These union-backed rules also raise the bar so high that many startups can’t get off the ground, which deprives consumers and workers of exciting new opportunities.

The obvious work around has been to use contractors. It’s not just a boon for businesses. Most of the nearly 2 million Californians who are independent contractors prefer to make their own schedules rather than show up 9-5 at the office. Ask your Uber driver, Realtor or barber. The Department of Labor found that 79 percent of contractors prefer these working arrangements with fewer than 9 percent preferring traditional employment.

If companies are forced to hire all their workers on a full-time basis, that might raise some people’s incomes, but it would also raise the cost per worker by a third and could lead to fewer jobs. There’s a market-based way to deal with problems raised by the court. For instance, the state could pass tax and regulatory reforms that make it more cost-competitive for individuals to purchase the kind of healthcare benefits offered to full-time employees. The state could create a “third way”—another worker status that lies between “full-time worker” and “contractor.”

The state’s business community has called on the Legislature and governor to address the problems created by the state high court. Gov. Jerry Brown punted. Incoming Gov. Gavin Newsom has deep ties to the tech community, but one of his top aides is from the California Labor Federation. Unions already are backing a bill to codify Dynamex. This is shaping up as one of the biggest battles in the new session. Will the California government let its ballyhooed New Economy thrive, or will it embrace an approach that was last relevant in the 1800s?

Steven Greenhut is Western region director for the R Street Institute. He was an Orange County Register editorial writer from 1998-2009. Write to him at sgreenhut@rstreet.org.

This column was first published in the Orange County Register.

Filed Under: Top Stories Tagged With: Amazon, Google, Technology, Uber

Don’t Kill the Growing Gig Economy

December 19, 2018 By Charles Crumpley 1 Comment

What was the biggest local business story of the year?

With a sigh, I vote for the state Supreme Court’s decision in April that basically outlawed the gig economy in California. I sigh because the ruling truly may disrupt the way business increasingly is being done today, especially here in the San Fernando Valley area.

In its decision in a case titled Dynamex Operations West v. Superior Court, the court essentially said you should not hire an independent contractor to do work that is a core part of your business. Instead, you need to hire that person as an employee. If you are a baker and you have a contractor on call who comes in as needed to make specially decorated cakes, you may need to hire that person, if only part time.

Let’s be honest. California businesses increasingly have shifted work to independent contractors as a way to control employee costs and reduce the legal hazards of having people on the payroll. Presumably, the ruling was an impulse to counter that trend by forcing businesses to hire employees instead of paying contractors. The ruling will make operating a business more expensive.

But the ruling will stifle many workers, too. The court seemed to ignore the fact that lots of workers have embraced the gig economy as a way to take command of their careers in a manner only dreamed about a few years ago.

I recently met a young man at a social gathering who proudly described himself as a tennis pro. But he said he only did it freelance; he was not employed by a club or school or anything. Wondering how he could survive financially, I asked something like: “Are you able to get a stream of clients to keep it sustainable?” He shook his head. “Not yet.” He whipped out his phone and opened his Uber app. “This is how I do it.” He showed me that he makes $300 to $400 a week as a driver. The best thing, he said, is that he picks his hours; he drives only when he needs to fill a vacant spot in his day, or to fill his entire day, if need be. It’s not a great deal of money, but he earns just enough to allow him to pursue his dream career. His goal, he said, was to be a full-time, self-sustaining tennis pro in a year.

This is the kind of opportunity allowed by the gig economy. If that young man had been born 10 years earlier, he may have only been able to dream of being a tennis pro someday.

If Uber is forced to hire him as a result of the Dynamex ruling, will he have to work set shifts, ruining the flexibility that allows him to pursue his dream career? For that matter, would Uber even continue to exist in California?

The gig economy is empowering older workers and higher-paid professionals, too. You may know of accountants, lawyers, PR people and the like who are able to quit their jobs to get off the merry-go-round and focus on a few accounts from home or from a coworking space. The gig economy makes it easier for folks to go into semi-retirement.

Gig work is more prevalent in California and surely in Los Angeles and in the Valley area, where a great number of people work part-time or as contractors to earn some cash between projects in the entertainment industry or in the broader creative ecosystem. The gig economy is made for Los Angeles. The Dynamex ruling will hurt here more than most places.

Surely not all gig workers like the arrangement. Some may have to take contractor status out of desperation, and they’d prefer to be a full-time employee with benefits. But how many is that? One poll last August said only 7 percent of independent contractors would prefer to be an employee. That survey was sponsored, so the results may be dismissed. But even if the true number were two or three or even four times that amount, it still means a healthy majority like the freedom and flexibility of independent employment.

In any case, gig work clearly is growing. One recent study projected that such workers could balloon to 40 percent of the workforce by 2020.

Of course, the Dynamex ruling was shocking to companies that totally rely on gig workers. That’s why such firms as Uber, Lyft and Doordash wrote to Gov. Jerry Brown last summer saying that transforming their drivers into employees would imperil their ability to stay in business here and that Dynamex, if allowed to stand, would destroy independent contractor jobs in the state.

So far, there appears to be little legislative or administrative impetus to neutralize the ruling. Businesses hate Dynamex, but the business lobby has little to no sway in Sacramento and may have negative sway. Labor unions like the Dynamex ruling. (Employees can be unionized, after all.) Since unions are very powerful in the state, the legislature may balk at doing anything meaningful to roll it back.

That may leave the issue up to the average Californian to decide. If enough everyday people like the gig economy and stand up for it, Dynamex could be overturned, maybe through the initiative process.

Perhaps the ultimate arbiter in this matter will be the state’s workforce. Many of whom were set free by the gig economy.

Charles Crumpley is editor and publisher of the San Fernando Valley Business Journal.

This article was originally published by Fox and Hounds Daily

Filed Under: Top Stories Tagged With: Doordash, Lyft, Uber

CA Supreme Court Nearly Vaporizes Independent Contractor Law – Setback to “Gig” Economy

May 7, 2018 By James V. Lacy 2 Comments

In a recent sweeping ruling that helps labor unions but runs contrary to small businesses and Silicon Valley innovation and the developing “gig” economy inspired by companies like Uber and Lyft, the California Supreme Court has decided that hiring companies no longer have much a say in whether a person who provides services for hire is classified as an “independent contractor” or an “employee.” The implications of the new ruling, filed on April 30, in the “Dynamex Operations” decision are huge, as it will extend onerous state employment and labor laws to new classes of workers, and will force the reclassification of tens of thousands of business relationships in the state between businesses and their former contractors, in the process, eliminating or raising the costs of goods and services to average Californians, while standing as a major obstacle to new popular ideas in technology such as ride sharing and delivery services.

The facts of the case itself center on a delivery driver for a company who claimed he was misclassified as an independent contractor. The attorneys for the driver successfully argued against the current standard, which used a multi-factor test to determine the proper classification of a worker.

Many new technology-aided companies like Uber and Lyft depend on workers who want independence with flexible hours and who want to set their own pace of work. However, workers classified as employees under the state and federal labor laws are generally guaranteed more expensive health care benefits and worker compensation, as well as collective bargaining rights, especially in California. Unions are particularly opposed to independent contractor relationships and they seek leverages in the law to add more members and therefore more political power. Citing the need for more “worker-friendly” laws, one lawyer in support of the change said, hyperbolically, “as the federal government increasingly abandons its past commitment to protecting workplace rights, the states are stepping up to fill the gaps.”

Under the new rules, businesses have almost no say in how their business relationships between employees and contractors are separated and classified. The opinion or business model of a business that prefers to classify a relationship as independent contractor doesn’t matter much any more. Now, in California, the determination is made by applying the so-called three-pronged “ABC” test, which puts all the burden on the employer to show the worker is not an employee. Under the test, to establish independent contractor status, the business must show: 1.The worker is free from the control and direction of the hirer in connection with the performance of the work; 2. The worker performs work that is outside the usual course of the hirer’s business; and 3. The worker is customarily engaged in an independently established trade, occupation, or business of the same natures as the work performed for the hirer.

The second and third factors of the new test are seen as the most troublesome, especially for “gig” economy businesses. If a person is delivering the public food, for example, is the delivery part of the fundamental business of that entity? If it is, then the deliverer becomes a far more expensive employee, covered by state wage and hour and other labor laws, entitled to health care, and entitled to collective bargaining rights. If this is the case, then what are the implications to the state? Well, people who want flexible hours and the ability to work when they want as deliverers, will find lost business opportunities. And the cost of food delivery will likely go up dramatically. This implication is just the “tip of the iceberg.” The implications resonate throughout the economy to the detriment of not only gig businesses, but largely small businesses that do not want to be saddled with costly labor law enforcement issues, and even nonprofits who use skilled workers attempting to offer things like compassion and health services to the poor.

A copy of the Court’s decision can be accessed here: http://www.courts.ca.gov/opinions/documents/S222732.PDF

Filed Under: Top Stories Tagged With: California Supreme Court, Independent Contractor, Labor Laws, Lyft, Uber

Bay Area companies paying employees to protest Trump

May 14, 2017 By Drew Gregory Lynch 8 Comments

While many conservative claims about paid protesters demonstrating against President Trump have been met with skepticism and dismissal — in the Bay Area — some of them might actually be getting money for being there.

Companies in the region are increasingly offering their employees paid time off to participate in protests, marches and other demonstrations as part of civic engagement policies.

“Democracy is a participatory institution; it’s not just something that takes place every four years when you have a candidate in a race,” Adam Kleinberg, CEO of San Francisco ad firm Traction, told the San Francisco Chronicle.

The company gives its workers two paid “Days of Action” per year.

Furthermore, tech giants like Facebook recently allowed their employees to take a day of paid leave to participate in the May Day immigration rights demonstration in San Francisco — a rally that was largely a protest of Trump’s agenda.

“At Facebook, we’re committed to fostering an inclusive workplace where employees feel comfortable expressing their opinions and speaking up,” a spokesman explained in an emailed statement. “We support our people in recognizing International Workers’ Day and other efforts to raise awareness for safe and equitable employment conditions.”

Major tech figures like Facebook COO Sharly Sandberg, Google CEO Sundar Pichai and co-founder Sergey Brin have all spoken out against the president, illustrating this administration’s frosty relationship with the industry.

And even those who showed a willingness to work with the White House have faced a wave of scrutiny. For example, Uber CEO Travis Kalanick resigned from the president’s business advisory council earlier this year after facing intense backlash, seeing #DeleteUber trend at the top of Twitter over his decision to offer guidance on a job growth agenda.

The policies appear to reflect a growing discontent in the heavily liberal region that Trump presents more than just policy differences — but an existential threat to their well being and daily life.

“It’s a recognition of the fact that civic engagement is something that we should be doing not just as individuals but as a company,” Buoyant CEO William Morgan told CS Monitor about his software company’s policy. “I wanted to make it more clear that we could not be passive citizens in this world.”

While the policies aren’t new — as companies like Comcast have been offering such leave for years — they appear to be taking on new life in the Trump era.

“People were wishing that I was dropped off in an (Islamic State) territory, calling me an idiotic libtard, candy-ass, saying they hope we’ll go out of business. Really nasty stuff,” Kleinberg told the Chronicle about the backlash to the policy.

Overall, Trump’s policy proposals have been met with a particularly strong response in Silicon Valley due to his stance on issues like the controversial H-1B visa program that tech companies say they rely on to recruit top talent — but one critics say comes at the expense of American workers.

And the president’s rhetoric may be having some effect, as the number of H-1B applications dropped to under 200,000 in 2017 — a 15 percent decrease from a year earlier.

This piece was originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: Bay Area, Donald Trump, Facebook, Uber