With the future of the gig economy hanging in the balance, RSG has published numerous articles on AB5 in the past few months. Today, RSG senior contributor Sergio Avedian breaks down the Presidential candidates views and where they stand regarding AB5, and workers’ rights overall.
On August 30, 2019, California’s Senate Appropriations Committee passed the bill out of committee with a 5-2 vote, sending it to the California Senate floor for debate and a final vote before the legislature goes on recess in September. And recently, the governor came out with his unequivocal support so it looks like this thing is going to pass.
The contentious proposal took center stage in Sacramento this week, where hundreds of supporters and opponents rallied and testified as the Senate committee weighed potentially turning hundreds of thousands of independent contractors in the state such as Uber, Lyft and Doordash drivers into employees.
“AB5 is a new and innovative approach to address inequality and dignity in the workplace,” its author, Assemblywoman Lorena Gonzalez, D-San Diego, told the committee. California’s actions on freelancers could help create a model for the nation and the gig economy in general.
Current Administration’s Take on AB5
Federally, gig workers are even less protected under the Trump administration. In late April, the Department of Labor issued an opinion letter to an unnamed “virtual marketplace company” that the company’s “service providers” would be classified as contractors under the Fair Labor Standards Act.
The National Labor Relations Board (NLRB) and the US Department of Labor (DOL) revealed their stance on this key question, with both determining that that Uber drivers are independent contractors. As reported in Forbes magazine, the NLRB released an Advice Memorandum that concluded UberX and UberBLACK drivers were independent contractors.
The NLRB reached that conclusion by applying the common-law agency test, which utilizes 10 qualitative factors. However, within the taxi and rideshare industries, the NLRB places most emphasis on just two of the 10 common-law factors: level of control by the company over the worker and how the workers are paid in relation to the company.
With respect to the level of control, the NLRB found the following facts critical in concluding that the Uber drivers were independent contractors:
- The drivers could set their own work schedules.
- The drivers were allowed to work for competing ride-share companies.
- The drivers could control where they worked.
Unfortunately for the drivers, the NLRB placed little weight on the fact that:
- Uber set the fares.
- Drivers could not subcontract their services.
- Uber would lock drivers from using the app if they had an excessive number of trip rejections.
- Drivers could not solicit customers away from Uber to Uber’s competitors.
Enter the Democratic Presidential Candidates
Worker criticism of Uber and Lyft gets at a key labor issue, as a side effect of the gig economy is that many workers go without the protections and benefits of traditional employment. However, over the past five years of organizing, the efforts of rideshare driver groups like Independent Drivers Guild (IDG) have resulted in positive change. New York City passed the first law in the country to require Uber and Lyft to pay its drivers a $17.22 hourly minimum in December.
In contrast, many 2020 Democratic candidates have used their congressional offices to champion gig workers and demand dramatic labor reforms. In May 2019, Senator Bernie Sanders introduced a bill to protect workers’ right to unionize, co-signed by Senators Warren, Kirsten Gillibrand, Kamala Harris, and Cory Booker, as well as co-sponsored a similar bill that would reclassify the definitions of being an employee, also co-signed by Booker and Gillibrand.
Bernard Sanders has served as the junior United States Senator from Vermont since 2007. He is the longest serving independent in U.S. congressional history and a member of the Democratic caucus. On domestic policy, he broadly supports labor rights, and has supported universal and single-payer healthcare, paid parental leave, and tuition-free tertiary education.
During the May 8, 2019 Uber and Lyft driver strike, presidential candidate Senator Bernie Sanders said he supports a nationwide driver strike against rideshare companies Uber and Lyft.
“Uber is not a poor company. It paid its top five executives $143 million in compensation last year, including $45 million to its CEO. So why are Uber drivers struggling to put food on the table? I stand with striking Uber and Lyft drivers today. The greed has got to end,” Mr. Sanders tweeted.
“Uber says it can’t pay its drivers more money, but rewarded its CEO with nearly $50 million last year. People who work for multi billion-dollar companies should not have to work 70 or 80 hours a week to get by. I stand with the Uber and Lyft drivers going on strike on May 8.”
If you couldn’t tell by his tweets, he is in full support of AB5!
Elizabeth Ann Warren is the senior United States Senator from Massachusetts since 2013. She was formerly a law school professor specializing in bankruptcy law. A member of the Democratic Party and a progressive, Warren has focused on consumer protection, economic opportunity, and the social safety net while in the Senate.
In a speech at the annual conference of the New America think tank in Washington, D.C., Warren slammed ridesharing companies Uber and Lyft for undermining the economic safety net of worker protections built over the last century. The senator noted that everything from minimum wage and workplace safety laws to the 40 hour workweek, the right to unionize, and antitrust regulations created a system in which, between 1935 and 1980, the bottom 90% of Americans by wealth got 70% of all income growth. But, she said, the last 30 years have seen those protections come under relentless attack. She places the gig economy in general and Uber/Lyft in particular as the most recent weapon in the war against low and middle income workers.
For Warren, Uber and Lyft contribute to this pain by driving down wages and fighting against gig workers who want a greater share of the pie. “While their businesses provide workers with great flexibility, companies like Lyft and Uber have often resisted the efforts of those same workers to access a greater share of the wealth generated from their work,” she said. “Their business model is, in part, dependent on extremely low wages for drivers.”
“Uber and Lyft are worth billions of dollars, but their business model depends, in part, on low wages for their drivers. I stand with ridesharing workers who are organizing for better pay, benefits, and the opportunity to bargain collectively” tweeted Senator Warren.
Uber & Lyft are worth billions of dollars, but their business model depends, in part, on low wages for their drivers. I stand with ride-sharing workers who are organizing for better pay & benefits & the opportunity to bargain collectively. https://t.co/pmVAZUNDLW
— Elizabeth Warren (@SenWarren) May 8, 2019
Peter Paul Montgomery Buttigieg is a former U.S. Naval Reserve officer who has served as mayor of South Bend, Indiana since 2012. He is one of two combat veterans running for the Democratic Party nomination in the 2020 United States presidential election.
Hundreds of rideshare drivers amassed outside Uber’s corporate headquarters in San Francisco on August 27. Joining these workers was South Bend mayor and Democratic nominee hopeful Pete Buttigieg. The speech, of course, comes at a time when other Democratic presidential candidates are working to court the votes of unions across the country.
“I’m here because where I come from, gig is another word for job, which means if you are working a gig you are a worker and you oughta be protected as a worker,” he told drivers demonstrating near the Uber headquarters at an event organized by the group Gig Workers Rising. “That means you deserve a minimum wage. That means you deserve protections from workplace and sexual harassment. That means you deserve overtime protections. And yes, that means you deserve a union” tweeted Mr. Buttigieg.
Joseph Robinette Biden Jr. served as the 47th vice president of the United States from 2009 to 2017. Biden also represented Delaware in the U.S. Senate from 1973 to 2009. A member of the Democratic Party, Biden is a candidate for president in the 2020 election.
Joe Biden tweeted his support for the drivers during the May 8 strike. “I’m proud to stand with Uber and Lyft drivers across the country today. Every worker in this country deserves to be treated with dignity and respect.”
I’m proud to stand with Uber and Lyft drivers across the country today. Every worker in this country deserves to be treated with dignity and respect.
— Joe Biden (@JoeBiden) May 8, 2019
Kamala Devi Harris is lawyer and politician serving as the junior United States Senator from California since 2017. A member of the Democratic Party, she previously served as the 27th District Attorney of San Francisco from 2004 to 2011 and 32nd Attorney General of California from 2011 until 2017. She is a candidate for the Democratic nomination for President of the United States in the 2020 election.
Kamala Harris is backing the landmark California labor bill AB5 that could upend the gig economy and hand workers significantly more rights, a stand that’s at odds with her own brother-in-law Tony West (Uber Chief Legal Officer). Tony West is married to Maya Harris, Kamala Harris’s sister and campaign chairwoman.
Harris has been vocal about supporting legal changes to protect against the misclassification of gig workers. She cosponsored Sen. Bernie Sanders’ (I-Vt.) 2018 bill backing a national “ABC test” that creates a much higher burden of proof for companies to say their workers are contractors and not employees that’s similar to the California Supreme Court ruling. She also tweeted support of a one-day national strike of Lyft and Uber drivers earlier this year. “All workers deserve a living wage, protections, benefits, and the right to join a union. Standing with the thousands of Uber and Lyft drivers across the country striking today.”
All workers deserve a living wage, protections, benefits, and the right to join a union. Standing with the thousands of Uber and Lyft drivers across the country striking today.
— Kamala Harris (@KamalaHarris) May 8, 2019
Andrew Yang is a 2020 Democratic presidential candidate, entrepreneur, lawyer, and philanthropist. He is the founder of Venture for America (VFA), a nonprofit that focuses on creating jobs in struggling American cities. Yang’s signature policy is what he calls the “Freedom Dividend”, a kind of universal basic income (UBI) in the form of $1,000 monthly for every American adult over age 18. Yang believes UBI is a necessary response to the rapid development of automation, which is increasingly leading to workforce challenges, including job displacement by automation.
Yang, a long shot for the nation’s top office, says the drivers who staged the global strike on May 8 have legitimate complaints. The lack of job stability for independent contractors who do not have the same benefits and protections as traditional employees is a big reason Yang’s top campaign issue is creating a universal basic income that would provide every American adult with a baseline income of $1,000 per month.
Yang is seeking to protect gig economy workers whose income fluctuates, or those whose jobs are at high risk of being automated. “We need to stop living in a fantasy land where we think these companies are supposed to treat us like family members and employ us for years,” Yang said in an interview. “Their incentives are in the opposite direction.”
Top Democratic Candidates Still Use Uber/Lyft
Despite Democratic candidates indicating concern over Uber and Lyft treatment of their drivers, ridesharing has become central to their campaign operations. Out of the 2020 presidential candidates, the most vocal about Uber and Lyft’s labor model are also the ones making plenty of payments on ridesharing services, according to Federal Election Commission (FEC) filings from January until now.
Collectively, the following Democratic candidates’ campaigns took at least 2,629 Uber and Lyft rides and spent at least $68,481, according to FEC data. (Meanwhile, the Trump re-election campaign alone spent about $18,239 on 1,140 Uber rides in the past two quarters.)
Quartz contacted all of the candidates’ representatives for comment. With the exception of Sanders, the leading candidates have taken more Ubers and Lyfts than any other ground transportation services (rentals, limos, taxis) in the past two quarters, according to FEC data.
The number of rides they take shows the convenience of and growing dependence on ridesharing when campaigning town to town, particularly as Uber and Lyft spread to more rural areas. The growing use of Uber and Lyft is also blurring political divisions. Uber has long been seen as a “GOP darling,” but in reality, both Democrats and Republicans use Uber heavily.
What do you think about the top Democratic presidential hopefuls stance on AB5 and ridesharing in general? Do you think they believe what they say and will push for more worker protections, or do actions speak louder than words?
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-Sergio @ RSG
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