Gig News: Uber, Lyft & Airbnb Respond to Trump’s Muslim Ban

Major players in the gig economy have responded to President Donald Trump’s action to bar refugees and citizens of seven Muslim countries from entering the United States.

Most controversially, in the face of a 1-hour strike at New York’s John F. Kennedy International Airport yesterday by the union representing 19,000 New York taxi drivers in protest of Trump’s Muslim ban, Uber suspended surge pricing.  In effect, Uber broke the strike despite their claim that it wasn’t their intent to do so.  Both Buzzfeed and Slate report on a movement by consumers to cease using Uber and delete the application in response.

Uber also released a email sent to employees by CEO and co-founder Travis Kalanick, in which he stated Uber is “working out a process to identify…drivers [affected by Trump’s executive order] and compensate them pro bono during the next three months to help mitigate some of the financial stress and complications with supporting their families and putting food on the table.”  Kalanick serves on President Trump’s business advisory group.

Uber’s chief rival Lyft, on the other hand, released a much stronger statement.  Per Mashable, in an email to consumers entitled “Defending Our Values,” co-founders Logan Green and John Zimmer called Trump’s order “antithetical to both Lyft’s and the nation’s core values,” noting they stand firmly opposed to the action.  Most notably, Green and Zimmer stated that Lyft is “donating $1,000,000 over the next four years to the ACLU to defend our constitution.”

Airbnb, for its part, “has offered free accommodation to people left stranded by President Donald Trump’s travel restrictions,” according to the BBC.

Uber and Progressive Federalism

As Jon reported last night, an individual arbitrator has issued an award finding a California Uber driver to be an independent contractor rather than an employee.  The award is wrongly decided. I won’t engage in a complete analysis here, but, to find employee status, the arbitrator relies primarily on four California cases, three of which involved FedEx drivers. The arbitrator concludes that the facts of the Uber case resemble previous cases in which workers were found to be independent contractors. She holds:

Uber drivers are not supervised; supply the cars they drive; do not wear Uber uniforms or signage; can drive simultaneously for any competitor, including Lyft, Uber’s biggest competitor; are paid for each ride and have the unfettered option to work as little or as much as they want and whenever they want in the geographical location assigned to their platform.

But to find independent contractor status on this basis, the arbitrator has to ignore some other highly relevant cases, including a 2006 California decision involving drivers who worked for a courier company, JKH Enterprises, Inc. v. Dep’t of Industrial Relations. In JKH, the court found that the drivers were employees despite the following:

[T]he drivers are free to decline to perform a particular delivery when contacted by the dispatcher, even if the driver has indicated his or her availability for the day . . . .  All drivers [] use their own vehicles . . . They pay for their own gas, car service and maintenance, and insurance . . . . The drivers’ cars do not bear any JKH marking or logo. And the drivers themselves do not wear uniforms or badges that evidence their affiliation or relationship with JKH.  Some of the drivers perform delivery services for other companies as well . . . .  The drivers receive no particular training. . . . All drivers set their own schedules and choose their own driving routes.  Their work is not supervised.  Indeed, JKH only has a vague idea of where its working drivers are during the business day. . . . The drivers take time off when they want to and they are not required to ask for permission in order to do so.

So, this particular Uber arbitration award is wrongly decided. Of much broader importance, however, the award brings home something critical about progressive federalism: namely, progressive states need to clarify that gig workers, like Uber drivers, are employees within the meaning of state employment law. Continue reading

Thinking about a Third Category of Work in the Trump Years

During the last few years of the Obama Presidency, we saw a productive debate over the question of whether changes in the organization of work called for a new legal categorization of workers. In particular, the question was whether we need a third category, intermediate between “employee” and “independent contractor,” to capture the kinds of work arrangements typified by gig economy firms like Uber. Seth Harris and Alan Krueger, in a leading example, called for the creation of a legal category they named “independent worker,” which would grant some – but not all – protections of employment law to workers engaged in these types of work relationships.

There were several primary points of contention in the debate. One was whether such a third category actually was necessary, or whether the existing categories of employee and independent contractor were flexible and capacious enough to capture the new work relationships. Harris and Krueger took one position on this question, I took another.

A second question was whether a third category would result in ‘leveling up’ or ‘leveling down.’ One hypothesis was that if we created a new category – independent worker or something similar – workers previously classified as independent contractors would be shifted up (as it were) into the new category and thus granted expanded protections relative to what they enjoyed as contractors. The other hypothesis, the more pessimistic one, was that workers previously classified as employees would be shifted down into the new category and thus offered fewer protections relative to what they enjoyed as employees.

The Obama administration, with the Perez/Weil team in charge at the Department of Labor, presented a relatively favorable political context for trying out a third category of worker. Continue reading

Gig News: Trump’s Secretary of Transportation Cheered by Uber & Lyft

Bloomberg reports that representatives of both Uber and Lyft have voiced support for President-elect Donald Trump’s choice of Elaine Chao for Secretary of Transportation:

“We have the utmost respect for Elaine Chao, an accomplished public servant and highly capable leader,” Adrian Durbin, a spokesman for Lyft, wrote in an e-mail.  “We congratulate her on the nomination and look forward to working with her on an array of transportation issues.”

Niki Christoff, head of federal affairs for Uber, said in an e-mail that “Chao’s knowledge of transportation issues is extensive and we look forward to working closely with her.”

Uber adviser Bradley Tusk called Chao a friendly appointment for the technology industry.  “In many ways, she may be the cabinet member with the most interesting and important tech policy issues out there,” he said, citing the department’s involvement in regulating autonomous vehicles to drones to the technology that decides how cars communicate with each other.

Chao, a former Secretary of Labor under President George W. Bush, has previously made statements praising the gig economy and its labor model, which is predicated on classifying workers as independent contractors and not employees.  While the Secretary of Transportation does not apparently have a role with respect to worker classification, Chao represents a member of President-elect Trump’s Cabinet and former Secretary of Labor who will likely advocate on behalf of gig economy companies at the potential expense of gig economy workers.

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ACS Issue Brief on Employee Status

ACS is out with a new Issue Brief (authored by Brishen Rogers) on the question of employee status.  The brief, Redefining Employment for the Modern Economy, should be on the reading list of any lawyer or policymaker interested in the question of how to define employment in the 21st Century.  Drawing on the work of David Weil, the National Employment Law Project, and recent memoranda from the Department of Labor, the brief astutely identifies the problems with and sketches some sensible reforms to our labor and employment laws.

Rogers begins by, appropriately, locating his analysis in the broader trend toward what Weil names “fissuring” – questions of employee status matter, that is, not just in the gig economy but in the far more pervasive contexts of misclassification, subcontracting and franchising.  And Rogers, again rightly in my view, rejects the call for a new category of worker (describing Harris and Krueger’s “independent worker” proposal as a “false start”).  Rather than creating a new legal category, Rogers argues that we ought to “expand and clarify” the scope of employment under existing statutes. Through legislative amendment, he suggests that we:

  1.  Redefine employment per the “suffer or permit” test and specify that the “suffer or permit” test defines employment very broadly;

  2. Define workers in certain highly fissured industries as the legal employees of firms who contract with them individually for labor, and/or the joint employees of user firms who obtain their labor through subcontracting or franchising arrangements;

  3. Develop concrete guidance for courts to apply in other industries, or direct an expert agency to do the same; and

  4. Place the burden of proof on the party seeking to avoid employment status and implement other procedural and remedial reforms.

More particularly, Rogers suggests that Congress or perhaps the DOL provide a list of “enumerated industries whose workers will always be the employees of whoever purchases their services, whether directly or through an intermediary.”  He also effectively defends NELP’s proposal that states make broader use of the unemployment compensation procedural model “by creating a presumption that anyone who performs work for another is the other’s employee, then requiring the other to disprove employment status,” through the so-called ABC test.

I agree with much of what Rogers proposes here.  But, in setting out the problem to be addressed by legal reforms (what Rogers calls “the challenge of defining employment”), Rogers discusses the Lyft litigation and the widely-cited quote from Judge Chhabria’s opinion.  As Rogers puts it, “Chhabria struck a telling metaphor: if the case reached a jury, [the jury] would be ‘handed a square peg and asked to choose between two round holes.'”  Why?   Continue reading

Gig News: 14,000 New York Uber & Lyft Drivers Sign ATU Union Cards

A major union is mounting a high-profile effort to represent gig economy workers in New York.  Crain’s reports that this week, the Amalgamated Transit Union Local 1181 delivered union cards signed by 14,000 New York Uber and Lyft drivers to New York’s Taxi and Limousine Commission.  The union also held a rally outside the TLC’s headquarters.  Gothamist and the New York Daily News have more.

The ATU’s campaign comes after an IBEW local filed a petition to represent some New York Uber drivers, the Teamsters announced an intent to form an Uber “drivers’ association” in California, and Seattle passed an ordinance allowing independent contractors to unionize.  Uber and Lyft drivers are presently classified as independent contractors without collective bargaining rights under the National Labor Relations Act, but the National Labor Relations Board could find that drivers are misclassified and are in fact employees.

Today’s News & Commentary — September 19, 2016

Roughly 20,000 factory workers at two GM plants in Canada will strike if a new contract is not signed by tonight, according to MarketWatch. The president of the union Unifor—Canada’s largest private-sector union—said that recent meetings to secure future work haven’t been successful. The factory creates engines for 15% of SUVs sold in the United States.

PBS NewsHour has a feature on the history of labor laws and farmworkers—as well as recent updates that attempt to give them more rights. The piece covers the decision to exclude farmworkers from certain labor laws, to last week in California, which passed a historic law extending overtime pay to farmworkers.

Transit agencies are partnering with Uber to supplement services, according to the Pittsburgh Post-Gazzette. In St. Petersburg, Florida, Uber riders on their way to or from transit stops get direct subsidies—half the cost of a ride, up to $3. Supposedly these systems have “helped increase ridership on their systems,” as they help solve the “first mile, last mile” problem—getting riders to and from transit stops. They’ve also saved money: the Florida public transit authority eliminated two underused routes, saving $140,000 per year, and instead spent $40,000 on the Uber subsidy. The goal, however, is to fill in the gaps where the transit systems are lacking, not to replace the transit systems altogether. According to the article, these partnerships “haven’t been viewed as a threat to union drivers.”

Continue reading