Both Uber and a Teamsters local are backing a new Washington State bill that would give rideshare drivers new benefits — while codifying their status as independent contractors rather than employees.
Pending legislation in Washington State would give rideshare company drivers new benefits in exchange for codifying their status as independent contractors rather than employees and preempting cities from regulating rideshare companies. (Elvert Barnes / Flickr)
Uber’s lobbyists, after clinching an agreement with United Food and Commercial Workers (UFCW) Canada to launch a charm offensive at the Ontario provincial government for employee-like benefits on behalf of an estimated 100,00 drivers, weren’t done hobnobbing with unions.
Next up, the Teamsters in Washington State are working on a deal with Uber and Lyft.
The legislation would give ride-hail workers new benefits — sick pay, a process to appeal deactivations, protections against retaliation, and workers’ compensation — in exchange for codifying their status as independent contractors rather than employees, and preempting cities from regulating the rideshare companies as Seattle has done.
Washington lawmakers passed the bill, HB 2076, backed by Teamsters Local 117, with fifty-five yeas to forty-two nays on February 23. The senate will hold a public hearing February 26.
“HB 2076 exemplifies Washington State’s spirit of leadership and innovation,” Teamsters Local 117 vice president Brenda Wiest wrote to house representatives February 22 in an email obtained by Labor Notes:
This bill is supported by both Uber and Lyft, as well as the Teamsters, their affiliated Drivers Union, and dozens of labor and community-based organizations across the state. Moreover, it is backed by the people who matter most — the drivers themselves.
The Teamsters international declined to comment on the legislation.
Flash Point of Debate
It’s a flash point of debate in the labor movement: Should unions keep fighting for employee status for gig workers, or cut a deal to head off worse odds down the road? After all, unions and drivers are squaring off against Uber and Lyft, who with their bottomless pits of cash forced their way in California in a 2020 ballot initiative, Prop 22.
The companies have made explicit the threat that, if they don’t get this legislative compromise, they will pursue a ballot initiative in Washington. Lyft has put $2 million into a newly formed political action committee, Washington Coalition for Independent Work, with clones in New York, Illinois, and Massachusetts. It also has the backing of Instacart, DoorDash, and Uber, which have committed to contribute to the PAC.
What’s curious about this bill is that it has the backing of Teamsters Local 117 and its affiliate Drivers Union, which previously supported efforts to boost gig worker protections. Drivers Union members said the rationale for throwing their support behind a legislative deal with Uber and Lyft is the ballot initiative threat.
“They’re also holding the gun at our heads with the possibility of an initiative,” said Don Creery, sixty-eight, a ride-hail driver since 2013 and a board member of the Drivers Union:
They spent $200 million on California. It comes down to the reality that we don’t have the money to buy TV ads. They do. They will misinform the public with a barrage of TV ads, so we will lose an initiative. We could lose everything.
Jake Laundry, twenty-nine, has been an Uber driver since 2015; he is a member of both the Drivers Union and International Alliance of Theatrical Stage Employees (IATSE) Local 15, where he is an audiovisual worker. He considers himself a Teamster and didn’t want to say anything that would jeopardize the union. But he’s heard that pitch about the initiative threat too many times. Laundry views this bill as making “a deal with the devil.”
“It’s great you have a wage floor and then will improve wage conditions in outlying areas [outside] of Seattle,” he said. “But this contractor relationship also locks in a sort of technocratic feudalism.”
Creery has no qualms with contractor status. “I’m not really concerned about us not being designated as employees,” he said. “In our union, we abandoned that seven years ago, eight years ago. We can be independent contractors and get rights. These are laws that can be changed by us, and we did.”
The Drivers Union’s biggest victories, though, were won at the city of Seattle — and this bill would put an end to that by reserving the regulation of rideshare companies to the state.
“Now you’re just kind of at the whim of the state legislature, which swings really moderate,” Laundry said. “Here in Washington, we have crazy secessionists that want a holy war. We’re not gonna get any labor victories out of them.”
What Creery feels “conflicted” about is the pay raises in the bill. “If you’re a Tacoma driver, it’s really outstanding pay rates,” he said. Currently, “once you leave Seattle city limits, our pay drops by 40 percent.” Drivers in Tacoma, who now get eighty cents a mile, would increase to $1.17.
Waiting time and travel miles without a passenger in the car would be uncompensated, though, and the base fare would be between $3 and $5.17 per trip. “To pay one of us $3 is class warfare,” said Creery.
The bill establishes two tiers of pay. For trips originating in cities with more than 600,000 people (Seattle), the rate would be $1.38 per mile driven with a passenger in the car and fifty-nine cents per minute. Those figures are based on Seattle’s Fair Pay Law, which took effect January 1, 2022. Elsewhere, the rate would be $1.17 per passenger mile and thirty-four cents a minute.
Yearly pay increases based on the cost of living would begin September 30, 2022.
Mohamed Diallo, thirty-three, has been driving for Lyft and Uber since 2017. He’s in favor of the legislation because his rent in Kent has skyrocketed. He also wants to extend the benefits like sick pay and the right to contest deactivations through an appeals process beyond Seattle to Kent and other parts of Washington State.
He said other drivers from his native Guinea are also in favor of the bill, describing it as “wonderful news.”
“Last year, my two-bedroom used to be $1,500,” Diallo said. “Today, I talked to my leasing office because my lease is going to be over and I have to sign a new one. It’s $2,030.” He also feels the financial strain at the gas pump; he’s averaging $180-200 to fill the tank of his Toyota Highlander SUV. He says the new legislation will increase his average earnings from about ninety cents per mile in Kent to $1.17 and spare him the commute into Seattle where the rates are higher.
Diallo works six days a week, twelve-hour shifts, with only Tuesdays off. He has two young children, a boy of six months and a two-year-old girl. “The most important thing about the bill is I will get more money to put food on the table,” he said.
Uber touts “flexibility” as a perk it offers to drivers. But “I don’t think flexibility is as important for the guys with the Teamsters,” said Laundry, who connected me with Diallo. “They’re driving seventy, eighty hours a week. They’re just scrambling to support their families. They’re working their tails off, so they don’t really have a flexible life.”
The Best We Can Get?
Why would any union agree to be involved in these compromise bills? The argument goes that we’re not going to win on employee status, plus there are innumerable hurdles to organizing gig workers at scale . . . so creating a third category, an independent contractor with at least some labor rights, is the best deal the labor movement can get.
Nicole Moore from Rideshare Drivers United in California finds a contradiction in that position. “There’s more demand for unions, a better minimum wage, and labor rights,” she said. “Compromise is absolutely the wrong direction. This is not to say we can’t get legislation on the road to employee status — but not at the cost of our labor rights.”
The app-based companies and their labor collaborators tout the notion of creating “portable benefits” that follow you from gig to gig. But “labor rights are portable benefits,” Moore said. “I have my rights to unemployment. If I get hurt on the job, I have portable benefits to workers’ compensation. Anything other than that is taking some people completely out of the picture.”
For Moore, the defeatist attitude that employee status isn’t winnable harks back to the National Labor Relations Act’s exclusion of agricultural and domestic workers. Like those workforces, the gig workforce is largely people of color and immigrants.
A personal vehicle makes for a very isolated and lonely workplace, which is why most gig workers’ organizing kicks off online. “We know each other in the parking lot of the airports,” Moore said. “We know each other online, because we find Facebook pages and Reddit in order to share information and understand. We are ready to organize.”
Devil in the Details
In the breezy language of Wiest’s email to state representatives, the benefits of the deal appear excellent. But not all that shines is gold. It can be a spear.
One of the sharpest daggers in the bill is preemption — giving the state government the exclusive power to regulate rideshare companies, so that Seattle could no longer enact wage increases or new rules about drivers’ working conditions.
“The Teamsters-affiliated Drivers Union has already won the nation’s leading labor standards for Uber and Lyft drivers at the local level in Seattle,” said Kerry Harwin, communications director for the Drivers Union, in a statement to Labor Notes:
Seattle’s first-in-the-nation protections have demonstrated a meaningful impact for Uber and Lyft drivers, who enjoy the highest minimum wage in the country, the nation’s first paid-sick days for gig workers during the pandemic, and the country’s only legal protections against unfair deactivations.
Seattle’s city council passed the Gig Worker Paid Sick and Safe Time ordinance, backed by Teamsters Local 117, in June 2020. Since then, the city’s Office of Labor Standards has reached a a $3.4 million settlement for violation of the policy with Uber and a $1 million settlement with the online food delivery company PostMates. It also reached a $350,000 settlement with DoorDash and PostMates in violation of a pandemic-related hazard pay law for food delivery workers; each company had to pay restitution to about 3,000 workers.
In September 2020, Seattle hiked the minimum wage for Uber and Lyft drivers to $16.39 per hour (it’s now $17.27) and required the ride-hail companies to pay drivers at least fifty-six cents per minute drivers are traveling to pick up a passenger or carrying one; it also covers driver expenses.
For Uber and Lyft, this combination of a progressive city council and workers organizing was too much. Their business model depends on misclassification, and on state government footing the bill for benefits that employers are traditionally on the hook to provide. So, they went to the legislature.
No Benefits During Roving Time
In the email to state representatives, Wiest said the bill would provide rideshare drivers with workers’ compensation under the “same robust state-run program that protects employees in Washington State.”
But in fact, workers’ comp would only be in effect when a driver is on the way to pick up a passenger or actually has a passenger in the car; the legislation describes these activities as “dispatch platform time” and “passenger platform time” respectively.
This leaves workers vulnerable if they get injured between fares, while they are roving and awaiting a new trip request. A 2020 UC Berkeley Institute for Research on Labor and Employment study estimated this cruising without a passenger is 35 percent of their work time. This method is also used to calculate the premiums that Lyft and Uber will pay into state coffers for workers’ comp.
Wiest championed the paid sick protections, which she said would be “at the same accrual rates for all workers.”
But paid sick leave would not accrue at the same rates for independent contractors as it does for employees. Again, it would exclude the time drivers are waiting for passengers, and in this case also the time they drive to fetch them after being pinged for a trip. Drivers would only earn paid sick time when a passenger is in the car, which the same study estimated to be roughly 53 percent of their work time. As a result, drivers will have to work twice as long as other workers to qualify for the same amount of time off.
“We are frontline workers — providing trips to nurses and other essential workers during the pandemic,” said Ahmed Farah, a Drivers Union member who has driven for Uber and Lyft since 2016, in an emailed statement. “As a father of three, paid sick days is a very important protection when my kids get sick.”
Drivers would be eligible for unpaid sick leave after working for ninety days for a ride-hail app.
Paid family leave was included in an earlier draft of the bill but was scrapped from the final legislation. Wiest’s email doesn’t mention the change, but Drivers Union staff continue promoting the idea that it is in the current bill.
Unemployment insurance will be studied by a “work group of stakeholders” drawn from labor and the gig industry with the deadline of producing a report by December 1, 2022.
“Driver Resource Center”
Protection from retaliation and an appeals process to negotiate driver deactivations are critically important for drivers. How would the legislation address this? It would provide a direct line of funding for the Drivers Union, which presumably meets the criteria in the legislation to serve as a “driver resource center.” (It may be the only group to qualify, since the bill says such a group must be able to demonstrate that it has past experience representing rideshare drivers and “providing culturally competent driver representation services.”)
A driver resource center’s services will be paid through a fifteen-cent-per-trip surcharge on riders, with dues membership modeled after the Independent Drivers’ Guild (IDG) in New York City, a Machinists Union–affiliated company union of Lyft and Uber drivers that receives an undisclosed amount from both companies.
And what would it do? The legislation makes scant mention of what services drivers would receive from the resource center. Asked about that, Harwin, the spokesperson for the Drivers Union, didn’t elaborate much: “It will provide support services to drivers, including representation” when faced with a deactivation.
The state treasury would oversee the fund. The state director of the Department of Labor would choose the driver resource center through what the bill describes as a “competitive process.” Workers won’t have a say in choosing the nonprofit organization, nor in how the money is spent.
The legislation also says the “driver resource center may not be funded, excessively influenced, or controlled by a transportation network company.”
Joe DeManuelle-Hall wrote last year when similar draft legislation was floated in New York that at a ten-cent surcharge, a similar resource center would have netted $75,000 per day — a staggering $27.5 million per year, based on a calculation of 750,000 rides daily in New York City shortly before the pandemic.
Follow the Money
The idea of bringing an IDG-like deal to the West Coast can be traced back to disgraced ex-Teamsters leader Rome Aloise.
Aloise, once a vice president of the international union, was eventually found guilty of taking gifts from employers, negotiating a sham contract, and using union resources to rig a local union election — and then of running Local 853 and Northern California’s Joint Council 7 while he was suspended from the union for these offenses. He has been “permanently barred from the Teamsters” and “permanently enjoined from participating in union affairs” effective January 31, 2022.
But back in 2018, Aloise was still in power and trying to cut a deal with Lyft and Uber. Among the many exhibits and court documents compiled when he was brought up on internal union charges were various emails from that fall discussing plans (never realized) to create employer-linked driver guilds in Seattle and San Francisco.
Aloise proposed that Seattle’s Teamsters Local 117 and the Workers Benefit Fund (WBF), which has ties to Uber and Lyft, should jointly “support the creation of legislation and a guild infrastructure for Seattle Drivers.” In a document shared with WBF CEO Benjamin Geyerhahn, Aloise wrote:
WBF will provide with [sic] polling, legislative support, legal support, its expertise and its relationships with Uber and Lyft. This support includes financial support for these items carrying through until legislation is passed. In exchange, it receives the Teamsters full support and exclusive right to provide benefits to the Seattle drivers. . . .
In a revealing email to a few other California Teamsters leaders on November 21, 2018, Aloise wrote:
Maybe it is worth talking about setting up a Driver’s Guild in SF, and then of course expanding it at a later date. . . . In NY, a lot of money is pouring into the Guild and back to the Machinists who were behind the establishment of the Guild.
One year later, he wrote on February 1, 2019:
[Local] 117 heavily involved and substantial negotiations this coming week with both companies. The issue, of course, is how to stop any legislation which would give our core industries any loop hole [sic] to move into this TNC [Transportation Network Company] type model, while allowing Lyft and Uber to operate with some type of meaningful representation for the drivers.
In 2018, he exchanged emails with former Service Employees International Union (SEIU) president Andy Stern about the need to protect “core industries” for the Teamsters — package delivery and freight transportation — in order to enter into an agreement with Uber:
For any of this to get any traction in California, it will need to have some language about staying out of certain functions, which are core industries to the Teamsters, i.e.; such as package delivery, freight transportation, etc. If there is to be a carve out of their “industry,” this will be essential, and perhaps a model for the other companies to deal with the ramifications of the Dynamix decision.
(At the time, the state’s Supreme Court in its Dynamix decision ruled against misclassification, creating a framework for standards to determine employee status.)
Last-mile transportation and delivery has gigified rapidly since 2018. Think: Uber Freight and Uber Eats. In September of 2020, United Parcel acquired Roadie, a crowd-sourced, same-day delivery company. FedEx bought ShopRunner. Amazon, Walmart, and Target have adopted and expanded their speedy gig-delivery business models to everything from yoga pants and furniture to pet food.
Online competitors are shipping it from a distribution center going across multiple zones where we’re taking it in the back of a DoorDasher’s car for the same cost as if it was a tennis ball, delivering it the same day, and delivering it at lower cost,
said Petco CEO Ron Coughlin in a March 2021 interview.
What’s to protect United Parcel Service (UPS) Teamsters from their work shifting to Roadie?