After years of promising drivers that they’re their own bosses, Lyft abruptly announced on August 20, 2020 that by the end of the day, it would lock California drivers out of work in the middle of a pandemic and devastating wildfires. Uber had previously threatened the same.
Although both companies quickly reversed course, their threat is just the latest example of how little they care about their drivers. The move to abandon their workers came in response to a court order to follow California employment laws and classify drivers as employees. In twin lawsuits filed by the California Attorney General against Uber and Lyft, Judge Schulman issued an injunction requiring Lyft and Uber to reclassify its workers by August 21. Both gig companies appealed the decision and have now been granted a reprieve while their appeals are pending, but the companies still threaten to leave California for good if they don’t get their way.
After Lyft and Uber, both multi-billion dollar public companies, claimed in court that it’s too difficult and expensive to follow the law, Judge Schulman acknowledged the challenges but held that any obstacles to reclassifying workers paled in comparison to the harm drivers and their families have suffered for years as a direct result of the companies’ “prolonged and brazen” refusal to classify their workers as employees. Despite working “grueling hours” for Lyft and Uber, drivers receive no overtime pay, sick pay, reimbursement for vehicle upkeep, and more. “These harms are not mere abstractions,” Judge Schulman wrote; “they represent real harms to working people.”
Uber denies minimum wage to drivers, gives $3.2 billion to white collar workers
Lyft and Uber argued in court they can’t afford to pay drivers fairly and offer them benefits like healthcare and sick leave. But in 2019 alone, Uber paid out $3.2 billion in stock compensation to its executives and employees like engineers and HR staff. And recently, the gig companies teamed up to pour over $100 million into Proposition 22, a ballot initiative that would exempt gig companies from having to offer the same worker protections as all other businesses.
This tactic of rewriting a law gig companies don’t like fits into a larger pattern they’ve deployed throughout the country: an undemocratic process called “state interference” or “preemption” that was first pioneered by big tobacco and the gun lobby to maximize their profits and deregulate their industries. According to the National Employment Law Project, Uber and Lyft have successfully forced through laws in 40 states that overrule and preempt local municipalities from passing regulations that would protect drivers, who are overwhelmingly immigrants and people of color.
When the California legislature refused to cater to their special interests and exempt them from California law, Lyft and Uber resorted to a wild publicity blitz aimed at confusing California voters by misstating the law , including an MSNBC interview and a NYTimes op-ed. In each appearance, Uber’s CEO Dara Khosrowshahi repeats the claim he’s trotted out for years, that current laws force workers to choose between employment benefits and flexibility. But experts agree it does no such thing. “This is BS,” tweets Harvard JD and workplace law expert Terri Gerstein. “Our current employment system does *not* require workers to choose between flexibility and a safety net.”
With an uncertain November vote on Prop 22 approaching, Lyft and Uber have loudly threatened to close up shop in California for good; but in the shadows, they are quietly scrambling to change. Anonymous insiders recently revealed to the New York Times that both companies are considering transitioning to a franchise model, which treats workers as “employees” (as Uber already does in Germany and Spain). This move, however, was scorned by the International Franchise Association as being “like a bank robber saying that they ‘work in finance.'” Though this particular plan was scorned by the International Franchise Association as being like “a bank robber saying they ‘work in finance,'” it shows that the pressure is on and the companies are reeking of desperation. The California electorate should heed this and take heart: Lyft and Uber really are considering other options. Voting no on Prop 22 will help seal the deal.