Are Lyft and Pepsi Playing the Same Game?

Recently, following swift and widespread backlash, Pepsi pulled an advertisement that was accused of co-opting imagery from Black Lives Matter protests and other social movements. The advertisement’s storyline centered on model Kendall Jenner abandoning a photo shoot to join a parade of ethnically diverse models carrying ambiguous posters painted with peace signs, love written backward in Arabic, and vague invitations to “join the conversation.” At the end of the commercial Jenner, a white woman, pushes past the protesters-of-color who invited her to the demonstration, and offers a police officer a Pepsi. The officer opens the can and the crowd erupts in triumphant hugging. Responses to the ad included a tweet from Martin Luther King’s daughter that read “If only Daddy would have known about the power of #Pepsi.” After initially defending the commercial, Pepsi issued a statement saying, “Clearly, we missed the mark, and we apologize. We did not intend to make light of any serious issue.”

Pepsi’s advertisement is just the most recent in a series of corporate attempts to capitalize on the current political moment. While Pepsi did “miss the mark,” other companies have better managed to brand themselves members of the #Resistance.

Lyft has arguably done this most successfully. After years of competing with Uber, and lagging significantly behind in both valuation ($5.5 billion to Uber’s $60 billion), and market share (20% to Uber’s 80%), Lyft has profited off of recent political events, and Uber’s missteps. Lyft’s first move came in response to the #deleteUber campaign which was sparked by Uber’s actions during the airport protests against President Trump’s first executive order on immigration. About 200,000 people deleted Uber following the protests. Sensing an opportunity to distinguish themselves, Lyft made a $1 million donation to the ACLU, the very organization who had come to symbolize opposition to Trump’s executive order. In the wake of #deleteUber, Lyft downloads increased by 40% and they gained around 5% of Uber’s market share.

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Gig News: Court Enjoins Enforcement of Seattle Gig Unionization Ordinance

Judge Robert S. Lasnik of the U.S. District Court for the Western District of Washington has enjoined enforcement of Seattle’s first-in-the-nation ordinance giving gig economy independent contractors the right to unionize (the “Ordinance”.)  Judge Lasnik’s full decision granting the U.S. Chamber of Commerce’s motion for preliminary injunctive relief in Chamber of Commerce of the United States of America v. City of Seattle can be found here.  Uber, Lyft and a third ride hailing company had been due to submit driver information this week to a union recognized as a “qualified driver representative” pursuant to the Ordinance, but the requirements “are hereby enjoined until this matter is finally resolved.”

Notably, Judge Lasnik found that the Chamber may succeed on the merits of its antitrust claim, pending analysis of the City’s claim for antitrust immunity, but that the Chamber and drivers challenging the Ordinance in a consolidated lawsuit are unlikely to succeed on their National Labor Relations Act preemption claims at the moment.  Judge Lasnik stressed “that this Order should not be read as a harbinger of what the ultimate decision in this case will be when all dispositive motions are fully briefed and considered.  The plaintiffs have raised serious questions that deserve careful, rigorous judicial attention, not a fast-tracked rush to judgment based on a date that has no extrinsic importance.”

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Gig News: Seattle Gig Unionization Ordinance On Hold

Despite surviving multiple court challenges, the revolutionary Seattle municipal ordinance giving gig economy independent contractors the right to unionize appears to be on hold.

According to Bloomberg BNA, a Seattle city attorney announced the city will delay enforcement of the law in proceedings before the district court hearing the challenge to the ordinance last week.  Uber, Lyft and a third ride hailing company had been due to submit driver information today to a union recognized as a “qualified driver representative” pursuant to the ordinance.  Seattle will not requite the companies to disclose the driver information until Judge Robert S. Lasnik of the U.S. District Court for the Western District of Washington rules on a motion filed by the U.S. Chamber of Commerce, which brought the lawsuit challenging the ordinance.

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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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