California Assemblywoman Lorena Gonzalez celebrates committee passage of a bill to reclassify workers in California
Paid time-off, retirement planning, worker education – benefits each of us want and deserve from our jobs. That is precisely what is being proposed by Lyft and Uber.
One of the biggest debates in the California State Legislature is over who is classified as an employee versus an independent contractor. Our legislators are uniquely positioned to protect flexible, on-demand work while simultaneously improving work quality and security. That is, as long as they take seriously the recent path forward jointly offered up by the leaders of Lyft and Uber.
Lyft and Uber connect passengers and drivers. Passengers have access to affordable transportation and greater options for mobility. Drivers benefit by earning on their own time, with the freedom to set their schedule. Because they are not bound by rigid work shifts or a boss telling them if, when and where to work, drivers are classified as independent contractors, not employees of the companies themselves.
We all agree that drivers would benefit from some of the protections and additional financial security that exist in many other lines of work.
One such protection included in the proposal offered by Lyft and Uber is to establish a commitment around earnings that would provide greater financial stability for drivers, many of whom use their on-demand work to supplement income from other jobs or balance other priorities in their lives. Other driver protections proposed by the ride-sharing companies include benefits such as paid time-off, retirement planning, resources for worker education and a collective association for workers.
Transportation network companies (TNCs) recognize that the legal framework around independent work needs updating to address these driver protections. To their credit, Lyft and Uber have proposed a variety of policies that preserve driver flexibility while increasing benefits and wages.
But Lyft and Uber are legally prevented from providing many of these benefits today and need legislators to modernize existing law to allow companies like theirs to implement these policies. If legislators choose to pass up this opportunity, Lyft and Uber will become fundamentally different services, and both drivers and passengers will lose the flexibility and accessibility they love most about these apps.
Politicians are also concerned with protecting independent workers. But unlike Lyft and Uber, their approach is overbroad and overlooks the benefits of this type of work.
A current bill in the state legislature seeks to reclassify independent contractors as employees. Under this designation, drivers would lose flexibility and gain a boss they don’t want or need. Constrained work shifts would be the new norm. Those who drive only occasionally to supplement income from other jobs, like parents, students, part-time workers and the like, would lose the opportunity to work for TNCs. This happens to be the majority of drivers on these apps.
Another downside of legislators’ approach regarding ride-sharing would be a reduction in reliability for passengers. TNCs increase mobility for the elderly and infirm, as well as those who do not possess a driver’s license or opt out of driving or who may otherwise drive under the influence. Reclassifying Lyft and Uber drivers as employees decreases the number of potential drivers available to meet demand at any given time, thereby increasing consumer costs and wait times for passengers.
TNCs were built on innovative technology that seamlessly connects drivers and passengers. As these companies grow, they must adapt their thinking to meet the needs of independent workers. Politicians may want sweeping legislation, but it will result in hurting the workers they seek to assist. Instead, policymakers should seek a better alternative and work to expand worker protections in creative ways, while preserving the independence drivers value most.