In California, will Lyft and Uber’s counter-offensive against AB-5 put an end to the rights won by workers?

In California, will Lyft and Uber's counter-offensive against AB-5 put an end to the rights won by workers?

An Uber driver from the Rideshare Drivers United collective demonstrates along with hundreds of others against Prop 22 in Los Angeles on 14 October 2020.

(Noémie Taylor-Rosner)

Behind the wheel of their shiny cars, a hundred or so Uber and Lyft drivers sound their horns in unison. On this autumn morning in Los Angeles, employees of the two App-based rideshare and home delivery giants came to take part in a great day of mobilisation against Prop 22, or Proposition 22, a controversial proposal which will be put to Californians in a referendum to be held on 3 November, at the same time as the presidential election.

Funded to the tune of US$200 million by several companies in the digital economy including Uber, Lyft and even the shopping delivery giant Instacart, this measure seeks to invalidate the AB-5 act, passed by the California Parliament in 2019, which forced the Silicon Valley service platforms to reclassify the million ‘self-employed’ workers who provided services in their name as employees. This major change in status was aimed at giving the workers the right to the minimum wage and access to unemployment insurance, sick leave and health cover.

The act came into force last January, but it has never been applied by the gig economy giants, who have chosen to challenge it in court and bring the case before the voters by sponsoring a referendum on the issue, as Californian law allows.

Their stance has angered many of the self-employed workers. “Uber and Lyft are threatening to leave California because they claim they can’t continue to operate if they are forced to pay their workers more,” notes Nicole Moore, Lyft driver and representative of the self-employed collective Rideshare Drivers United, which is campaigning for the ‘No’ vote in the referendum. “It’s fine if they leave. I urge them to! After all, there are other companies in California who are ready to take their place and abide by the law,” she says.

20,000 drivers mobilised in protest against plans to reduce their pay

Rideshare Drivers United was formed three years ago, in August 2017, in the parking lot of the Los Angeles International Airport (LAX) where many Uber and Lyft drivers work. At the time, the two service platforms had just announced significant reductions in income. These have continued for the past three years: while drivers in Los Angeles were paid US$1.75 (€1.50) per mile in 2016, the fare is now stagnant at 60 cents (50 euro cents). However, the US tax authorities estimate that the cost per mile is now 57.5 cents.

“We quickly created an app to mobilise workers against these falling incomes, because we needed a place to meet,” says Moore. “This is one of the challenges for those who work for the gig economy if they want to get themselves organised: unlike workers who might organise in their factories, we are isolated from each other, each in our own car.”

The union’s organising strategy paid off: from around 50 when it was created, Rideshare Drivers United now has nearly 20,000 members. The adoption of AB-5 by the Californian parliament is in large part the result of their mobilisation.

But the drivers and delivery staff of the service platforms now believe that Prop 22 threatens these gains. The companies of the gig economy claim the opposite. They insist that their referendum proposal has as many advantages as the AB-5 act, minus the employee status. It promises to deliver “120 per cent of the guaranteed minimum wage to those who work full time as well as compensation to buy health insurance according to the number of hours worked per week,” says Geoff Vetter, spokesperson for the pro-Prop 22 campaign.

“The problem is that all of these social benefits are based on the actual working time of the drivers,” notes Mark T, Uber driver and food delivery worker for the DoorDash platform, who prefers to remain anonymous for fear of reprisals by his employers. “This means that they only take into account the number of hours when we are actually serving a customer, never the waiting time between each ride or delivery run or the hours spent on vehicle maintenance,” explains this self-employed worker based in the San Francisco Bay Area where he runs his own anti-Prop 22 campaign on social media, called ‘Make Work Pay’.

“These unpaid hours represent an important part of our working time. About 20 hours of rides or deliveries a week actually means about 40 hours out there, working,” he says. “I calculated that by taking into account the total number of hours we are active, Prop 22 pays less than the minimum wage and even in some cases, costs us money.”

The flexibility debate

To convince Californian drivers and delivery workers to join the ‘Yes’ campaign in the gig economy referendum, Uber, Lyft and others insist that the AB-5 act would put an end to the flexibility they currently enjoy while self-employed. Their argument has already convinced some, including Alexia Anastasio, a film director who makes ends meet by working for the company Postmates, which specialises in home food delivery. She even became one of the voices of the ‘Yes on 22’ campaign. “I chose to work for Postmates specifically to avoid the inconvenience of a full-time job with a company. I don’t want a manager and I want to be able to organise myself as I see fit. I need a flexible job so that I can supplement my income while continuing to work as a director,” she says.

But that argument that does not convince Moore of the Rideshare Drivers United collective. “At no point does the AB-5 act call into question the principle of flexibility. It absolutely does not force people to stick to a specific schedule. The allocation of working hours remains entirely the responsibility of the companies in the gig economy,” she says.

“Anyway, the idea that these companies offer total flexibility to their employees is an illusion,” adds Liz Temkin, who works for the shopping delivery platform Instacart.

“If you want to be paid a minimum, you have to work at specific times of the day that you have not necessarily chosen, because that is when there is the most work is on offer,” recalls this 65-year-old delivery worker, who has in the past participated in several class actions against service platforms in Silicon Valley. “Sadly, many of the young workers who defend Prop 22 today have never experienced anything other than the gig economy. They don’t know what it’s like to have a stable job with social protections. They often have a short-term view that does not take into account the need to be entitled to maternity leave or to contribute to retirement.”

With just a few days to go to the election, Prop 22 continues to divide Californian society. At the end of September, an opinion poll by Berkeley University in California showed that 39 per cent of Californians were in favour of the referendum measure, that 36 per cent were against it, but 25 per cent were still undecided. For the time being, the future of the gig economy and its workers hangs on the verdict of the ballot box.

This article has been translated from French.