In April 2018, CA's supreme court issued a sweeping ruling, Dynamex, establishing that if workers aren't doing “work that is outside the usual course” of a firm’s business, then under CA wage law they're employees entitled to protections, not contractorshttps://www.bloomberg.com/news/articles/2018-05-09/democrats-take-aim-at-the-gig-economy …
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This “ABC test” ruling spurred alarm among all sorts of companies, including tech platforms whose core business model is providing services via an army of workers who they claim are contractors, but whose work is arguably very much within "the usual course" of the firm's business
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Federal or state laws guarantee a slew of protections to employees but not to independent contractors, including minimum wage, overtime, breaks, sexual harassment protection, unemployment, worker's compensation, non-discrimination & union organizing rightshttps://www.bloomberg.com/news/articles/2014-10-16/fedex-ground-says-its-drivers-arent-employees-dot-the-courts-will-decide …
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Having employees brings costs & liabilities for companies that don't apply w/ contractors. Uber has said making drivers employees “would require us to fundamentally change our business model" & have "adverse effect on our business and financial condition.”https://www.bloomberg.com/news/articles/2019-04-12/uber-ipo-filing-warns-that-drivers-will-be-even-less-happy …
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Under state and federal laws, whether workers are contractors or employees depends on a range of often-contested factors including how much control a boss exerts over the work. Someone may be an employee under one law, but not under anotherhttps://www.bloomberg.com/news/articles/2017-01-10/it-s-a-new-game-for-uber-drivers-if-new-york-passes-this-law …
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Among the types of workers whose bosses have claimed they're contractors: drivers, cooks, teachers, mixed martial artists, video game developers, house cleaners, cable installers, strippers, lacrosse officiators...https://www.bloomberg.com/news/features/2020-05-08/as-ufc-pushes-may-mma-event-fighters-say-deals-are-getting-worse …
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While classifying their drivers as contractors, Uber and Lyft have also argued to city officials that those drivers’ names should be treated as “trade secrets” and not released, because publicizing them would make it easier for competitors to hire themhttps://www.bloomberg.com/news/articles/2019-09-03/uber-argues-driver-names-are-closely-guarded-trade-secrets …
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In 2019, dozens of workers classified by Instacart as contractors told me the work is less flexible than advertised, with tactics like four minutes of pinging noise (with an ACCEPT button but no reject button) used to prod them to take on unappealing taskshttps://www.bloomberg.com/news/articles/2019-07-15/instacart-hounds-workers-to-take-jobs-that-aren-t-worth-it …
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In summer 2018, I reported firms including Uber, Lyft, Instacart & Doordash were quietly lobbying California's top Democrats for swift legislation or executive action to shield them from Dynamex ruling, which they said would otherwise “decimate businesses”https://www.bloomberg.com/news/articles/2018-08-05/gig-firms-ask-california-dems-to-rescue-them-from-court-ruling …
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Unable to secure relief from elected Democrats on their own, gig companies tried in 2019 to secure a deal with unions that would let them keep classifying workers as contractors while providing them new perks like benefit funds or guildshttps://www.bloomberg.com/news/articles/2019-01-16/uber-has-bigger-problems-to-worry-about-than-the-d-c-shutdown …
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In late 2018, SEIU Cali privately circulated a memo saying that the ABC test could create a path for “potentially the entire gig sector” to organize, but that there were major drawbacks, including that the governor, state referendum process or Congress could subvert such efforts
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In January 2019 I reported firms like Uber and Lyft were meeting with unions like the Teamsters and SEIU to discuss potential compromises, and California's new Governor Gavin Newsom was urging them to reach a deal https://www.bloomberg.com/news/articles/2019-01-16/uber-has-bigger-problems-to-worry-about-than-the-d-c-shutdown …
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Uber had previously forged a deal to create a Uber-funded, union-affiliated guild for New York drivers that's prohibited from striking or challenging designation of drivers as contractors, but can contest deactivations and lobby for changes like wage floorhttps://www.bloomberg.com/news/articles/2016-10-27/uber-found-an-unlikely-friend-in-organized-labor …
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New York City now guarantees app-based drivers a minimum wage meant to be over $17 an hour after expenseshttps://www.bloomberg.com/news/articles/2019-01-30/juno-sues-to-block-minimum-pay-rule-for-ride-share-drivers …
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1 proposal circulated privately in 2019 by SEIU CA council would’ve created systems for bargaining, “portable benefits” accounts & pay guarantees but allowed companies to seek “flexible alternative standards” in areas like overtime, breaks & worker’s comphttps://www.bloomberg.com/news/articles/2019-07-25/union-splits-from-uber-and-lyft-on-california-worker-rights-law …
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Among those advising & representing Uber in its dealings with organized labor, I reported in 2019, was Laphonza Butler, a former SEIU local president who was also advising Kamala Harris as she ran for presidenthttps://www.bloomberg.com/news/articles/2019-07-25/union-splits-from-uber-and-lyft-on-california-worker-rights-law …
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In May 2019, California’s state assembly passed A.B. 5, a bill that, while exempting certain sectors, would codify the 2018 Dynamex ruling’s broad definition of an employee and apply it to a wider swathe of state laws. Gig companies didn’t get an exemptionhttps://www.bloomberg.com/news/articles/2019-06-12/uber-lyft-executives-urge-california-compromise-on-driver-pay …
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In June 2019, Uber & Lyft went public with their vision for deal: Drivers would be considered contractors, not employees, but would get wage standards for the time when they're picking up or dropping off passengers, a benefits fund, and an associationhttps://www.bloomberg.com/news/articles/2019-06-12/uber-lyft-executives-urge-california-compromise-on-driver-pay …
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Union leaders denounced Uber and Lyft’s public proposal, and some - like the state building trades council - went further, warning more generally that cutting a deal with the gig companies would risk undermining labor standards across the boardhttps://www.bloomberg.com/news/articles/2019-06-12/uber-lyft-executives-urge-california-compromise-on-driver-pay …
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By July 2019, dealmaking efforts hit a pivotal setback: The Teamsters signed onto a letter to Gov Newsom & lawmakers, organized by the building trades, opposing proposals to create a 3rd category of worker or let tech platforms treat workers as contractorshttps://www.bloomberg.com/news/articles/2019-07-25/union-splits-from-uber-and-lyft-on-california-worker-rights-law …
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SEIU California State Council's President said it “has not and would not support any third classification or interpretation of employee classification that would undermine employee status and protections” granted by Dynamex ruling and the A.B. 5 billhttps://www.bloomberg.com/news/articles/2019-07-25/union-splits-from-uber-and-lyft-on-california-worker-rights-law …
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In August 2019, AB 5 was endorsed by Bernie Sanders, Kamala Harris & Elizabeth Warren. The Massachusetts senator wrote an op-ed opposing "exclusions," saying "All Democrats need to stand up & say, without hedging, that we support AB 5 & back full employee status for gig workers”
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Uber, Lyft, and DoorDash, while continuing to push for a deal, announced in August 2019 they were committing $90 million in case they had to instead resort to a ballot measure ensuring drivers aren't considered employeeshttps://www.bloomberg.com/news/articles/2019-08-29/uber-lyft-pledge-60-million-to-possible-labor-law-ballot-fight …
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With no compromise in sight, in September 2019 California’s senate passed AB 5 and Gov. Newsom signed it, while signaling he was still aiming for future legislation providing gig drivers “voice at work” and “preserving flexibility and innovation”https://www.bloomberg.com/news/articles/2019-09-11/california-senate-passes-labor-bill-set-to-transform-gig-economy …
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Gig companies unsuccessfully sued to try to block enforcement of AB 5, while meanwhile arguing their workers were not employees even under the new law’s more expansive definition. Uber made changes to its app aiming to boost its case.https://www.bloomberg.com/news/articles/2019-09-18/california-governor-signs-labor-law-setting-up-bitter-gig-economy-fight …
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Lyft’s president continued meeting labor leaders to push for a dealhttps://www.bloomberg.com/news/articles/2020-02-07/uber-urges-court-to-smother-california-frankenstein-labor-law …
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In May 2020, with the big gig companies still refusing to reclassify workers as employees, California’s attorney general and several cities sued Uber and Lyft under AB 5.https://www.bloomberg.com/news/articles/2020-05-05/uber-lyft-sued-by-california-officials-over-driver-benefits …
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In August, when a judge granted an injunction to force the companies to reclassify workers as employees, Uber and Lyft threatened to shut down California operations. An appeals court put the injunction on hold while considering the case.
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(Back in Sacramento, following complaints about Dynamex and AB 5’s impact in areas like freelance journalism and language interpreting, the legislature passed, and in September 2020 the governor signed, a new compromise bill that loosens the rules in such sectors.)
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Meanwhile the gig companies, unable to secure a deal of their own, forged ahead with their ballot measure, now called Prop 22, which qualified in the spring for the Nov. 3 ballot. https://voterguide.sos.ca.gov/propositions/22/ … If it passes, lawmakers are blocked from amending it absent a 7/8 majority.
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