Protocol: How Uber and Lyft compromised with labor in Washington state — and kept drivers from becoming employees

Here’s the story of how Washington avoided a blowout Proposition 22 fight, and how the gig work companies won contractor status for their drivers.

For gig companies, the war to cement Uber and Lyft drivers as contractors in California was bloody, expensive and a massive blowout. In Massachusetts, a coalition of gig work companies has already broken state campaign-spending records over a potential similar ballot measure.

But this year, in Washington state, the decision to enshrine gig workers as contractors — not employees — wasn’t even a fight. Instead, it was the product of a backroom, measured and quietly intense discussion that everyone involved agreed is rare in today’s political climate.

With very little fanfare, Washington state Gov. Jay Inslee signed a bill into law at the end of March that confirms — for now — the contractor status of Uber and Lyft drivers, protecting the respective companies from the threat of being forced to classify their workers as full-time employees. The bill also grants first-of-its-kind benefits and protections to drivers: a guaranteed minimum wage, just-cause firing protections and access to some of the state labor systems that are designed to protect workers from company violations of labor laws. The bill was endorsed not just by the gig companies but also by the local unions and labor politicians that typically oppose such laws. Meanwhile, national labor groups vehemently opposed the bill in a rare public fracture.

“Simply put, there is no better place in the country to drive for Lyft or Uber than today in Seattle, where we have already had some local legislative success, and soon, then we will have in the state of Washington,” Kerry Harwin, the communications director for the Drivers Union, told Protocol. The Drivers Union, an advocacy group affiliated with a local Seattle Teamsters union, has advocated for a coalition of app workers and drivers in the Seattle area and in Washington state for years, and last year won new rights and benefits for those workers in Seattle.

“There will be no higher statewide minimum pay rate in the country, sick pay, workers’ comp benefits,” Harwin said. “When it comes to protection against unfair terminations, we’ve achieved a just cause standard for terminations of Uber and Lyft drivers in Washington, which is a higher protection than people in an employer-employee relationship have in the state.”

The battle over whether gig workers should be classified as employees or contractors has been brewing since before gig companies like Uber, Lyft and DoorDash were founded (taxi drivers have always been contractors, for example), but as these companies and the size of their workforce grew, so did the importance and scale of the fight. If states or the federal government decide to classify gig workers as full-time employees, the companies would be required to pay into traditional health insurance models, payroll taxes and other legal systems that provide benefits and protections to full-time workers. Full-time employees also have more organizing, unionizing and bargaining rights under the National Labor Relations Act.

Most of these gig companies likely could not afford the costs that would come with millions of employee-drivers, and the companies also say that they would be forced to take away flexibility if required to classify them as employees. The majority of gig workers also don’t drive for Uber or Lyft as their primary job, making classification especially messy for all but the small percentage who work solely for the gig platforms. But labor groups and traditional unions argue that flexibility wouldn’t need to change, and that the percentage of people who work primarily for these tech companies deserve to be offered benefits and protections just like, for example, the engineers who work at the gig companies’ corporate offices.

In Washington state, the new law does not directly say that gig workers must be classified as contractors. By skirting the classification issue, driver advocates and gig companies were able to reach agreements on protections and rights that individual drivers want and could benefit from. At the same time, the gig companies succeeded in their push for the law to be structured so that as long as those companies provide these new benefits and protections, their workers remain contractors, preventing any classification fight like the ballot measure in California.

A liberal, pro-labor, first-term state congresswoman was the driving force behind the bill’s unlikely success. “I was approached by drivers themselves, and Teamsters and Drivers Union, and they said, ‘Look, we are having really great conversations with Uber and Lyft, about what a bill could be around worker protections and benefits and all of that stuff,’” Liz Berry, a Democrat for Washington’s 36th District, told Protocol. “They had concepts mapped about what things could look like generally, and I just started putting words on paper.”

“[Rep.] Berry was really eager to dive into a really complicated issue,” Jen Hensley, Lyft’s head of Government Relations, told Protocol. “We really just sort of started to sit down, ask, ‘What does the solution look like?’ The thing about this group that really I think made us successful at advancing this was really that we kind of came together as often as needed to have real, candid conversations,” she said.

Harwin said that giving individual drivers what they want is, at the end of the day, more valuable than fighting about how those workers are classified.

“The history of employment law in the United States is extremely troubled,” Harwin said. “One way to remedy this very problematic American past is to make everyone employees. But another way to address this is to make sure that no matter what your arrangement, you should have the protections that everyone should have.”

Read full article at Protocol

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