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Washington State Passed a Contentious New Gig Worker Law

James Childers says he really likes his job driving for Uber and Lyft in Spokane, a city in Washington State. But since he started working for ride-hailing companies in 2017, he’s seen drivers’ shares of each fare slip. Once, three-quarters of each trip went right into his pocket, he says, and now the companies use formulas that can see drivers earn just $9 per hour before sometimes spotty tips, below the state’s minimum wage.

But Childers only became involved with Drivers Union—an advocacy group affiliated with the local Teamsters labor union—after an intransigent passenger’s accusation of racism got him temporarily kicked off the Uber app. (The company relented when he showed the company a dashcam recording of the incident, he says.) “Uber and Lyft do not care,” he says. “They have other drivers waiting in the wings.” The company declined to comment on the specific incident.

Now Childers is hoping that a new state law governing ride-hailing drivers, signed by Washington governor Jay Inslee on Thursday, will give drivers more recourse against the companies, and pay that at least equals what it was five years ago. The bill, which was the result of negotiations between Uber, Lyft, and the local affiliate of the Teamsters, maintains the independent contractor status of drivers in the state—and protects ride-hailing companies’ core business model.

Drivers statewide will receive new rights. They will accrue sick pay and receive minimum pay guarantees based on the time and distance they spend on each trip, though the guarantees will only apply to the time they are carrying or picking up passengers. Drivers generally report they spend 40 to 60 percent of their time without people in their cars. They can also choose to use a new 15 cent passenger fee to fund a drivers’ resource center, which could provide recourse to those who are kicked off the companies’ apps. But drivers will not get the full set of traditional benefits that come with being staff members, including health care. And ride-hailing companies will still not pay into unemployment insurance programs, a factor that frustrated many drivers during the pandemic, when rides suddenly dried up.

In a statement, Ramona Prieto, Uber’s head of policy in the western US, said the bill allowed drivers “to stay independent while gaining historic new benefits and protections.” Lyft’s head of government relations, Jen Hensley, said the law gives drivers the “flexibility, independence, benefits, and protections they want and deserve.”

At the eleventh hour on Thursday, the National Teamsters labor union’s newly appointed president, Sean O’Brien, publicly called for the state’s governor to veto the bill, saying that it would usher in standards that could erode existing workers’ rights in other sectors.

The Teamsters' local chapter, which helped draft the bill, disagrees. “Uber and Lyft drivers—like all workers—deserve a labor movement that will respect their right to self-determination to set their own priorities, stand in solidarity with them in their struggles, and never give up the fight for fairness and justice,” union secretary-treasurer John Scearcy said in a statement.

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Uber and Lyft are hoping this law will pave the way for other legislation that maintains the independent contractor status of ride-hailing drivers around the country, and the world. In 2020, California voters approved Proposition 22, a gig-company-funded ballot campaign that overturned a state law to make drivers employees. So far, the winning strategy appears to hinge on one word: “flexibility.”

The argument for flexibility has shown up everywhere: in Uber and Lyft’s official statements on gig workers’ rights; in the name of another compromise proposal with a labor union in Canada, called Flex Work+; and in the name of the companies’ newly formed Washington DC trade association, called Flex.

The message has begun to make appearances in other debates over legislation, including in Massachusetts and Illinois, where campaigns to pass similar bills are already underway.

But flexibility means different things to different drivers. Nicole Moore, a part-time Lyft driver and organizer with California-based advocacy group Rideshare Drivers United, argues that true flexibility would allow drivers to set their own prices in response to changes like gas price spikes, or to know how much they’ll make on trips before accepting them.

“One hundred percent of us want flexibility and independence, but that’s not what we’re given,” she says.

After California passed a law requiring gig companies to treat their workers as employees, Uber debuted features giving drivers more control over their fares and trip destinations. But the company rolled those back after its ballot initiative victory. Uber is now offering a feature called “upfront pricing” in a handful of American cities, a feature that gives drivers an estimate of how much they’ll make on a trip before they accept it but also comes with a restructured fare rate. Lyft doesn’t have a similar feature.

For years, gig companies have argued that their workers are not just the taxi drivers or delivery people of the 21st century. Instead, they argue that drivers are participating in a new kind of work, which demands a new kind of legal labor code. Drivers are business owners who use ride-hailing apps to find potential customers. They make their own schedules and can sign on and earn money whenever they want. But make those same drivers into employees, the companies have warned, and they will no longer have flexible schedules.

Some people, including drivers, find parts of this argument persuasive. In hearings before Washington lawmakers, many drivers organized through the local Teamsters-affiliated Drivers Union said their priorities were higher wages, sick pay, and flexible schedules. Many drivers outside of Seattle hoped their wages might get closer to those in the city, where ride-hailing workers have since 2020 had a minimum wage of over $16 when they have passengers in their cars.

“I think we got our benefits,” says Peter Kuel, who has been driving for ride-hailing companies in the state since 2014 and is now the president of the Drivers Union. He praised the legislation as “a huge compromise.”

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Other labor and law experts argue that employees can have flexible schedules, too. And they warn that cementing independent contractor status for gig workers is a slippery slope. The Washington law “is an erosion of basic workers’ rights propped up by basic misunderstanding that there’s something different about hiring workers through an app,” says Brian Chen, a senior staff attorney at the National Employment Law Project, an advocacy group. “Once these bills pass, they open the door for industry after industry to try to rewrite the law to their own satisfaction.”

Many workers find the companies’ flexibility arguments persuasive because they tap into appealing American ideas about independence and being your own boss, says Veena Dubal, a professor of law at UC Hastings who studies technology and labor. “There is something really compelling about not having to go in or talk to an HR rep before you can download an app and work whenever you want,” she says. “But the details belie the fable that this is truly flexible work.”

Gig work has divided the labor movement. Unions in Canada and the United Kingdom have struck deals with ride-hailing companies. But a Massachusetts affiliate of the AFL-CIO, the United States’ largest federation of trade unions, lobbied against the Washington State legislation. And on Thursday, the new president of the International Brotherhood of Teamsters called for a veto of the bill, which the local Teamsters had worked to craft. The official, Sean O’Brien, said ride-hailing drivers should be classified as employees, not independent contractors, and warned that unions should not become “a money-grabbing association.”

“These [gig] companies assert so much control over workers and want to take on none of the responsibility,” says Kara Deniz, a spokesperson for the International Brotherhood of Teamsters.

Now the battle will move to a new state. In Massachusetts, the state attorney general sued Uber and Lyft in 2020, alleging that the companies violated state law by treating drivers as contractors instead of employees. (The suit is still pending.) The firms have responded by supporting a ballot initiative and legislation that would make drivers’ independent worker status permanent.

This week, the Massachusetts legislature’s joint financial committee held a hearing on the state bill. Pitched testimony—from drivers, from company representatives, from labor advocates, and from lawmakers with questions—dragged on for six hours. And at the committee meeting, ride-hailing companies used some familiar words: Drivers, they said, want flexibility.

Updated 4/1/2022 4:30 pm ET: This story has been updated to reflect additional information from Uber received after publication.


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