Uber drivers advocate for workers’ rights as new gig economy bill AB 5 passes
on September 24, 2019
One day last October, Jeff Perry was getting ready for his work as an Uber driver in the Bay Area. He got in his car, pulled out his phone and signed on to the app, just as he had done every day for the past two and a half years, but the app wouldn’t let him sign in. Instead, he received an alert that his account had been deactivated.
Perry said he got little help from Uber’s support team, who told him it was a problem related to a driving infraction. Several more calls, messages, and a trip to the DMV later, Perry said he’d confirmed that his record was spotless, but Uber’s team informed him they would review the issue within 10 days. That meant time without work, right before the holiday season.
“I have a family,” he said. “And that’s going to put me into a hard spot for Christmas that I saved all year to be prepared for.”
Three weeks later, the app started working for him again, although Perry said he received no notice from the support team. For Perry, this was the tipping point that led him to seek out Gig Workers Rising, an organizing campaign of drivers and other workers who are advocating for workers’ rights and protections. He felt that this temporary suspension without notice, which he attributes to a glitch in the platform, was unfair.
If Perry had been a salaried employee, he believes, he would have been protected against suspensions that were not tied to any specific instance of misconduct.
“It was the level of disrespect about how this error on their part affected me and my life. I thought, ‘I’m absolute disposable garbage to these people. They just don’t care,’” he said.
As of Tuesday morning, Uber representatives had not responded to an inquiry asking for a response to Perry’s statements. But in-app messages forwarded by Perry documenting his conversation with Uber’s support team confirm his uploaded clean driving records and request for review for what he believed to be an erroneous deactivation.
And Perry is not the only driver who has made this kind of complaint. Rideshare Guy blog contributor Jay Cradeur detailed a similar experience in a 2017 entry.
This kind of vulnerability to unpaid suspensions and changes in driver payment structures are among the reasons why Gig Workers Rising organized rallies and protests supporting Assembly Bill 5 (AB 5), which was signed into law by Governor Gavin Newsom on Wednesday and will go into effect in January. The new law expands labor protections to many types of workers who were previously considered independent contractors, and could potentially force Uber and Lyft to classify their drivers as employees. Under California’s current labor laws, employees are entitled to minimum wage, paid sick leave, overtime compensation, and health insurance benefits.
In a written signing message, Newsom called the bill “landmark legislation” that corrects “workers being wrongly classified as ‘independent contractors’ rather than employees, which erodes basic worker protections.”
“The hollowing out of our middle-class has been 40 years in the making, and the need to create lasting economic security for our workforce demands action,” he wrote.
But Uber’s legal chief Tony West said changing these classifications will curtail drivers’ flexibility.
“Today, drivers have control over when, where and how they work,” said West during a phone-in press conference on September 11. “This would all change dramatically if drivers became employees.”
West said if drivers are classified as employees—which, he argues, AB 5 does not legislate—they would lose the flexibility that they currently enjoy. He maintains that drivers would be forced to work shifts, with set hours in specific locations, and that they would only be able to work for one rideshare employer at a time.
He also said that flexibility is the number one priority of Uber drivers and that the company will “continue to advocate for independence and choice.”
West called the passage of AB 5 a missed opportunity for the state and labor leaders to negotiate on behalf of drivers for a “new progressive framework.” West said Uber had previously advocated that the state instead adopt a different proposal, which included a minimum earning standard, access to “robust portable benefits like sick leave and injury protection,” and “real sectoral bargaining … which would give drivers a voice in the decisions that affect their livelihoods.”
This proposal was rejected, but now rideshare companies are hoping to take the issue to California voters. Uber and Lyft have collectively committed $60 million into a campaign committee account to lay the groundwork for a ballot initiative in 2020. West said the initiative won’t ask voters to exempt Uber from AB 5. Instead, he said, “We’ll ask voters to support the pro-driver policy we’ve advocated for—that is, giving drivers access to benefits and an earnings score and retaining the flexible access to on-demand work that they enjoy today.”
West said while Uber will abide by the law, the company will not classify its drivers as employees when the law takes effect next year. He contends that that AB 5 does not specifically mention rideshare drivers and suggested that the company could pass the test under a provision that exempts workers from employee classification if their work exists outside the usual course of the company’s business.
West argues that Uber’s primary business is that of a technology company, providing a digital platform for several types of businesses, like Uber Eats (food delivery), Uber Bike (electric bike sharing), and Advanced Technologies Group (self-driving technologies), in addition to its on-demand ride service.
But Perry says Uber’s outside-the-usual-business argument doesn’t square up. Before the passage of AB 5, he said, the company was circulating emails to drivers warning them of problems that could arise if the bill passed. According to emails forwarded to Oakland North by Perry, the company urged drivers to sign a petition against the bill stating: “Your access to flexible work could be at risk if lawmakers in Sacramento do not take action in the next few weeks.”
Uber’s reaction to AB 5 “is the most disgraceful thing, in my eyes, that they’ve done,” Perry said. “They’ve spent the last three to four months pitching how terrible AB 5 is for drivers and [telling us to] fight against it. And then they pass it and they go, ‘This doesn’t even apply to us.’”
For full-time Bay Area Lyft and Uber driver Annette Rivero, Uber’s response is fitting. “That is exactly the way they treat us, as if we aren’t at the core of their business,” she said.
But she sees the passage of AB 5 as a first step in the right direction. She hopes the law will give drivers more stability, transparency and shield them from unexpected deactivations.
“The biggest thing that will change is my level of hope that things are going to get better,” said Rivero, who is also a member of Gig Workers Rising.
She says the purpose of their group, which mainly organizes via Facebook, Twitter, and text messages, is to provide leadership to other drivers. “It’s a lot of reassuring [them] that that they have rights. That they deserve better pay and that they deserve benefits,” she said. “Together we’re so powerful, but alone, there’s not much we can do.”
Over the last couple of years, Rivero said, she has watched her wages decrease dramatically and her bonuses diminish.
In regulatory filings, Uber reported its “take rate” as 22 percent in 2018, varying from 12 percent to 25 percent depending on region. According to Business Insider, Lyft’s take rate was 26 percent in 2018, though the number is calculated differently–Uber includes tolls and surcharges in the calculation.
A report published in August by Jalopnik analyzed 14,756 fares and found that Uber actually kept 35 percent of the revenue, while Lyft kept 38 percent.
Similarly a study done by the Economic Policy Institute, a nonprofit, nonpartisan think tank that conducts research and analysis on the economic status of working Americans, examined drivers true earned wages have found that the company takes a third. The EPI study also found that after deducting Uber’s fees and drivers’ expenses, a driver averages $11.77 an hour, which is lower than the minimum wage for California.
Rivero said the oversaturation of the market also drastically affected her take-home pay. She said she’s had to drive twice as many hours for less than half the wages she made two years ago.
Earlier this year, Uber agreed to pay a total of $20 million to settle 13,600 class action lawsuits filed in California and Massachusetts in which drivers challenged their classification as independent contractors, Uber’s failure to remit gratuity and a failure to pay for drivers’ business expenses.
Initially, the settlement offer had been $100 million, but last year the United States Court of Appeals for the Ninth Circuit decertified thousands of drivers’ class action status, citing Uber’s arbitration clause. This reduced the number of drivers able to participate from 385,000 to 13,600.
Another industry will also be affected by AB 5: newspapers. Editorial pages across the state have lambasted the bill as a detriment to the newspaper business. Most worry about the cost to classify delivery drivers as employees, adding an additional budget line item to razor thin profit margins and decreasing a dwindling number of subscribers. Separate legislation granted a one-year delay for newspaper delivery drivers before the law will affect them.
Representatives from The Chronicle’s distribution and human relations departments declined to comment for this article. As of Tuesday morning, neither the Publisher nor Executive Editor of the East Bay Times could be reached for comment.
But in an interview that aired on KQED on September 5, San Francisco Chronicle Editor-in-Chief Audrey Cooper said that the bill is keeping her up at night. She was concerned that the cost associated with the reclassification of delivery drivers would drive up the cost of subscriptions, and in turn, lose many subscribers. She said in rural areas, lack of delivery access and spotty internet might bar people from reading the news at all.
The result, she said, could be detrimental to the news industry. “This bill, I think, will create immediate vast news deserts in California,” she said in the KQED interview.
Similarly, the editorial board of The Mercury News and The East Bay Times wrote in an op-ed that “Newspapers, which are critical to a well-functioning democracy, would become even more scarce, and the public’s access to credible, objective news about their communities and government will be diminished.”
But for the Gig Workers Rising drivers, AB 5 is at least a reason to hope, said Rivero. “An ideal situation for me is that all workers, whether part-time, full-time, seasonal or gig workers, have rights,” she said.
“It’s only the first step to what we need to do next,” said Rivero.
Photo courtesy of Jeff Barrera / Gig Workers Rising.
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