Uber and Lyft Enlist Drivers to Make the Case for Keeping Them As Contractors

Uber and Lyft are campaigning hard in Sacramento to keep their California drivers classified as independent contractors, rather than as employees. And they're putting drivers at the center of the campaign: focusing on how the change might impact them and enlisting them to help make the case directly to lawmakers.

The California Supreme Court ruled in April 2018 that workers must meet three guidelines in order to be classified as independent contractors, also known as the ABC test. In Dynamex Operations West, Inc. v. Superior Court, the court ruled a worker can be considered a contractor only if:

• A. The worker is free from the control and direction of the hirer in connection with the performance of the work.
• B. The worker performs work that is outside the usual course of the hiring entity’s business.
• C. The worker is customarily engaged in an independently established trade, occupation or business.

Uber and Lyft drivers likely do not meet those guidelines, and therefore should likely be classified as employees. However, they’re still being treated as contractors, because no one has challenged that practice in court.

A state bill, AB 5, currently making its way through the Legislature, would codify the court decision into law and make those guidelines enforceable.

"Rather than sit and wait for 10 years for further uncertainty with employers and employees, we said let's take it, codify it and make sure everybody understands where they stand," said the bill's author, Assemblywoman Lorena Gonzalez, from southern San Diego.

These changes would mean a big financial hit for Lyft and Uber. If they start being required to classify their drivers as employees, they would have to pay for benefits like health care and workers compensation, as well as allow drivers to form unions.

In a recent opinion piece in the San Francisco Chronicle, Lyft and Uber executives Dara Khosrowshahi, Logan Green and John Zimmer made that financial argument, but also focused on the effects on drivers.

"Reclassification misses two important points: First, most drivers prefer freedom and flexibility to the forced schedules and rigid hourly shifts of traditional employment; and second, many drivers are supplementing income from other work. It’s also no secret that a change to the employment classification of ride-share drivers would pose a risk to our businesses."

They instead suggested that state lawmakers pass regulation requiring the companies to give drivers some of the benefits they would get as employees.

AB 5 and the Dynamex decision do not explicitly require companies to schedule shifts or limit hours.

"It's a time-honored tactic in American politics, when companies are worried about the effect of regulations or changes in government policy on their bottom lines, to talk about the ways that they're responsible for employment and investment in their communities," said Alex Hertel-Fernandez, an assistant professor at Columbia University, who studies businesses' lobbying tactics. "That makes them a lot more sympathetic than if you focus on the effects on profits or on the shareholders."

Uber and Lyft have been using drivers to push that message. Lyft sent an email to its drivers encouraging them to contact their local lawmaker. Uber sent a petition through the app opposing changes to drivers' classification. Drivers have also showed up to legislative hearings to argue against AB 5, often wearing shirts with the companies' logos on them.

Elizabeth — who only gave her first name at a state legislative hearing in February — was wearing a shirt saying “Uber Partner” when she testified.

"I come up with my own hours," she said. "I work 20 if I want to, and I work five if I want to. Nobody tells me when to come and go."

But Hertel-Fernandez adds the tactic only works if the drivers trust the messages they’re getting from the companies.

"This is a tricky line that employers have to tow," Hertel-Fernandez said. "They want to convince their employees or at least persuade them to contact their elected officials and that often means putting together information that is more tilted towards what the employer wants. But if they appear too heavy handed I think it can turn employees off of the message they're trying to get out there."

In the email Lyft sent to its drivers, the company wrote: "Legislators are considering changes that could cause Lyft to limit your hours and flexibility, resulting in scheduled shifts. We're advocating to protect your flexibility with Lyft, in addition to establishing an earnings minimum, offering protections and benefits, and giving drivers representation so you have a voice in the company."

Uber's petition also focused on driver flexibility. It reads: "Recent changes to California law could threaten your access to flexible work with Uber. Unless lawmakers take action now to modernize the law, you could lose your ability to work with multiple apps and control when and where you work."

Uber and Lyft say they didn't coerce anyone into taking action, but many drivers are instead speaking out against being used as political lobbyists.

"We don't need them to send vague misleading information to sign petitions against AB 5 through their app," said driver Rebecca Stack-Martinez at a rally this month outside Uber's headquarters. "Drivers can speak for themselves."

After the Assembly passed AB 5 overwhelmingly, the measure is now making its way through the state Senate.