The National Employment Law Project and the Partnership for Working Families are out today with a new report, “Uber State Interference: How Transportation Network Companies Buy, Bully, and Bamboozle Their Way To Deregulation”.
The report provides a comprehensive look at Uber’s strategy to aggressively push for state legislation to protect its business model. Such legislation, which has now passed in 41 states, undermines state labor standards and preempts local control of many traditional aspects of for-hire transportation (taxi) regulation, including drivers’ employment status, safety requirements, environmental protections and public access, including for riders with disabilities. The report concludes that this state legislative strategy has significant negative consequences for drivers, riders and their communities.
The report brings together a few important trends we have followed at OnLabor – the contestation of the independent contractor status of Uber drivers, the increasing preemption of municipal labor standards, and the impact of workers’ shrinking political power in the face of concentrated corporate power. Much of our focus on the proper classification of Uber drivers has been on litigation over employee status and the application to gig workers of general classification standards. Ben’s post last year on Uber and Progressive Federalism is an example of this focus. The NELP report highlights that, in addition to its litigation strategy, Uber is playing the classification game by nesting the issue within state legislation that protects broader aspects of the Uber business model. Out of the 41 state laws regulating TNCs, most expressly include state-wide denial of some basic labor protections for drivers: 25 establish a presumption that TNC drivers are not employees, 4 state that drivers “need not be employees,” and 11 include some mix of exemptions from state employment laws.
The report also makes an important connection between these TNC-specific laws and the broader effort to advance a progressive agenda outside of the federal arena. As we’ve covered (here and here), the past few years have seen a concerted effort by Republican-controlled state legislatures to prevent or roll back progressive labor standards enacted by Democratic-controlled cities within these states. In July, NELP issued a report documenting the 25 state laws preempting local control over minimum wage. The new NELP report shows that state legislatures are achieving this goal even more successfully on behalf of Uber by enacting TNC-specific preemption laws. State laws already passed in Texas, Florida and Ohio preclude any local control over TNCs. Other TNC-specific state laws preempt various aspects of municipal regulation. As the NELP report points out, “[i]n the last four years, nearly four times as many states have restricted or prohibited city regulation of ride-hailing companies as have passed wage preemption bills.”
Another contribution of the NELP report is to describe Uber’s state-level political strategy. As the report describes, Uber follows a pattern to achieve its deregulatory goals: (1) flood a market with low-cost service to quickly establish large market share, ignoring existing ride-hailing regulations; (2) deploy a large cadre of lobbyists in state capitals in support of deregulatory and preemptive legislation; (3) create the perception of an impending service crisis, including threats to withdraw from the market; and (4) unleash a massive public relations campaign targeted at state legislatures. The report shows how little success advocates for workers have had in countering the Uber political machine. The one exception covered by the report is how a coalition of unions, worker advocates and progressive politicians supported passage of the Seattle collective-bargaining ordinance for Uber drivers and headed off a broad TNC preemption bill in the Washington state legislature. By documenting the TNCs’ legislative strategy, in part facilitated by a continued relationship with ALEC (despite their public break with the organization), the NELP report reminds us – as we have here, here and here for example — of how much the diminished power of the labor movement has undermined workers’ ability to counter well-organized and financed anti-worker political interests.