On January 25, a broad coalition of organizations sent a letter to Congress urging lawmakers to oppose “third-category” legislation, which posits that gig workers fall between the categories of “worker” and “independent contractor.” The letter, signed by seventy groups that include the AFL-CIO, NAACP, Teamsters, AFSCME, and UNITE HERE, describes gig work as “life on the precipice of devastation,” rather than the “entrepreneurship” so often touted by executives of gig companies like Uber, Lyft, and DoorDash.
“Across the country, millions of workers hired and managed by companies via internet apps, such as Instacart and DoorDash delivery workers, Uber drivers, and Handy home service workers, are deprived of basic labor protections,” the letter reads. “Because their employers insist on unilaterally calling them ‘independent contractors,’ these workers don’t get a minimum wage, overtime pay, workers’ compensation, unemployment, state disability insurance, or access to federal protections from discrimination, including sex harassment.”
Proposition 22 in California is the model of such third-category legislation, and gig companies saw a huge victory with its passage this past November. The ballot measure proposed to exclude gig workers from labor rights, instead offering them a limited set of benefits. A response to Assembly Bill 5, which clarified that these gig employees have labor rights like any other worker, Prop 22 is a carveout, one written by the gig companies who refuse to provide their workforce with those rights.
That success, the result of the companies’ spending some $200 million on propaganda in the lead-up to the vote, immediately led executives to move on to crafting similar third-category legislation in other states, with an ultimate goal of passing such laws at the national level. As Uber CEO Dara Khosrowshaki said on an earnings call following the California victory, the company will “more loudly advocate for laws like Prop 22.”
In response, last week’s letter to Congress says third-way classification denies workers the “legal right to which they are already entitled as employees,” and would “threaten our most fundamental understanding of what work ought to provide.” Rejecting “a federal ‘Proposition 22’” explicitly, the signatories call on Congress to expand, not restrict, workers’ access to their legal rights.
This is the environment into which the Joe Biden administration enters, and his staffing choices have been anxiously scrutinized by both Silicon Valley and the labor movement for evidence of which side can expect the new president’s allegiance.
So far, it’s a mixed bag. Biden included opposition to Prop 22–style legislation in his platform, but it was not a topic of much discussion on the campaign trail. The new administration certainly has close ties to the tech industry. It’s not only that Kamala Harris’s brother in law was the chief legal officer for Uber, and thereby deeply implicated in crafting the Prop 22 strategy; Harris has extensive ties to Silicon Valley, and Biden’s advisors include tech industry veterans who can be expected to try to advance the sector’s interests. On the other hand, there is evidence of organized labor’s sway inside the White House: Biden has appointed an ex-union president to head the Department of Labor for the first time since Woodrow Wilson, and he’s made early moves in accordance with unions’ wishes.
Ambiguity remains. When Biden promises to be the “most pro-union president” in history, this is not as straightforward a statement as it might appear. The gig companies are willing to work with unions on a limited compromise around third-category legislation. The idea is to grant gig employees formal union membership, and limited “portable” benefits — often so limited as to be entirely inaccessible to any of them — and to grant unions the possibility of “sectoral bargaining” with several companies at once.
In exchange, workers and their representatives in organized labor forfeit the legal rights that come with being categorized as “workers.” So far, unions have largely — though perhaps not unanimously — refused such dealmaking. But the promise of new members, and the political and financial benefits that come with that, makes such a deal tempting to unions that are desperate for a way to turn around their fortunes.
Gig-economy executives are doing their best to present their strategy as a product of just such a compromise with labor. Susan Kennedy, Lyft’s vice president of communications — and someone who has previously been fined for illegally lobbying for Lyft — recently told the Washington Post that the company has “been working with labor on some groundbreaking proposals at the state level and we’re ready to work together to move the country forward.” As Anthony Foxx, Lyft’s chief policy officer, said recently, “Lyft stands ready to work with all interested parties, including drivers, labor unions and policymakers, to build a stronger safety net for gig workers in the US.” In a letter to the Biden-Harris transition team, Uber’s Khosrowshahi urged the new administration to work with the company so it can provide “benefits and protections we believe workers on our platform deserve.”
Which brings us back to the lack of clarity on what “pro-union” means. If unions are not a monolith, and some do decide to work with gig companies on third-category legislation, deeming it better to get something out of the new legislation rather than risk finding themselves shut out of the gig economy entirely, Biden — or any politician — could hold up such a position as evidence of this legislation being “pro-union.” It’s a sneaky line, one predicated on the public’s ignorance of the forces at play in this fight.
For now, organized labor remains on the side of gig workers, a fact evinced by the number of unions and other workers’ organizations backing the recent letter to Congress. Workers, and their representatives in the labor movement, must be unified to defeat the all-but-limitless coffers of the tech industry. The Biden administration could go either way on this, and Democrats’ slim control of Congress offers no guarantees either. With few, if any, of the most powerful politicians in the United States willing to stick their necks out for any workers, much less gig workers, the labor movement has a hard fight ahead.