AB 1340 follows driver complaints about low pay in wake of Prop. 22. Ride-hailing companies have signaled opposition and skepticism
Joseph Augusto loves that driving for Uber and Lyft for the last 10 years has given him the chance to meet a whole lot of interesting people. Over the course of about 25,000 rides, Augusto, who alternates between living in San Francisco and Merced, said he has met people in tech and biotech, professors, college students, lawyers and doctors from all over the world.
In fact, he has driven people from 49 different countries, according to an estimate Uber gave him. It’s been fun and he was able to make a living — at least until about two years ago, he said. That’s when Uber and Lyft cut rates for drivers, he said.Augusto said things could improve for ride-hail drivers if they were allowed to form unions and collectively bargain with San Francisco-based Uber and Lyft for better pay and benefits. Because California voters passed Proposition 22 in 2020, drivers are designated as independent contractors — putting them outside the protections of the National Labor Relations Act — and they don’t have that right. But a new bill introduced last week in the California Assembly would give Uber and Lyft drivers the ability to organize with the intent to collectively bargain with those companies. And Augusto supports it, seeing that right as a way to secure higher pay and better treatment from the companies. “I’m not saying there be laws against what they’re doing. We should get those too,” he said. “But certainly, if we can have contracts, this goes a long way to solving the problem.” Co-authored by Buffy Wicks and Marc Berman, Democrats who represent Oakland and Menlo Park, respectively, Assembly Bill 1340 would allow the ride-hailing companies’ “active” drivers to form unions. The bill defines “active” drivers as those who, over the previous six months, have given at least the median number of rides among all drivers who have given at least a minimum, yet-to-be-set number. Under AB 1340, active drivers could form a bargaining unit if a not-yet-specified portion of them submit authorizations for it or if a majority vote in favor unionizing in an election. Such workers have been organizing for a decade but, because they have been considered independent contractors, they haven’t had the right to form unions. Assembly Bill 5 in 2019 designated them as employees and would have given them that right, but the law was overturned the next year by Prop. 22, which passed with 59% of the vote after the ride-hailing and delivery companies spent more than $200 million backing it. The state Supreme Court subsequently upheld Prop. 22 following a legal challenge from drivers. But the courts struck a provision of the law barring drivers from forming unions unless the legislature overrode that provision on a seven-eights vote — a nearly impossible hurdle to overcome. That opened up a door for the legislature to approve the right for drivers to form unions by a simple majority vote. Berman, the bill’s co-author, told The Examiner that right is important to helping address some of California’s income inequality by allowing the approximately 600,000 Uber and Lyft drivers to bargain for better wages and working conditions. Those drivers represent one of the biggest opportunities in state history that labor has had to unionize workers, he said. “It’s a lot of people who are out there every day, working hard, just trying to make enough money to pay rent or go to school or help family,” Berman said. AB 1340 has already attracted a lot of interest in the Assembly, with around half a dozen other members expressing interest in signing on as co-authors, Berman said. And the SEIU, the powerful union, is sponsoring the bill, he said. But Berman and Wicks could face an uphill climb to pass the legislation, with Uber indicating its opposition and Lyft and an industry trade group expressing skepticism. “Californians are already feeling the squeeze — and this proposal would drive up rideshare costs even more while threatening the flexible jobs thousands depend on,” Uber spokesman Zahid Arab said in an emailed statement. Lyft spokesman CJ Macklin declined to directly comment on AB 1340. Instead, in an emailed statement, he pointed to public support for Prop. 22. In addition to designating drivers as independent contractors, the bill set a minimum wage guarantee for them, a reimbursement rate for their mileage and provided them with occupational accident insurance and, for some drivers, a health-insurance subsidy. Lyft has been working to build on Prop. 22, Macklin said. “This is the best way to balance the needs of drivers without trying to undercut the will of the voters when they originally passed Prop. 22,” he said in the statement. For its part, the Protect App Based Drivers and Services Coalition, which represents the ride-hailing companies as well as DoorDash and Instacart, plans to study AB 1340, said spokeswoman Molly Weedn in a statement. She also pointed to support for Prop. 22 and its provisions. “Our coalition will oppose any measures that threaten independent app-based work or make app-based services less affordable and less accessible for consumers,” Weedn said. Ex // Top Stories On Clement Street, spring brings seeds of economic recovery Longer evenings and warmer temperatures have helped businesses along the corridor, whose owners say they hope the momentum continues and spreads From tykes to teens, Clement Street has broad youth appeal Business owners on the corridor say it’s contributing to the street’s lively reputation Lurie touts early progress but avoids 100-day ‘victory lap’ New mayor to soon be tasked with closing massive budget deficit, guiding SFMTA away from fiscal cliff In the wake of the debate over Prop. 22, Weedn’s group has commissioned studies that purport to show that California ride-hail and delivery drivers are well compensated. On average, such drivers make $37.40 an hour, including tips, according to one such report in January. Drivers such as Augusto and their advocates scoff at the notion they’re doing well. They note that such studies don’t take into account the time drivers spend driving around with the apps while waiting for rides. Under Prop. 22, Uber and Lyft don’t have to compensate drivers for that time or reimburse drivers for the miles they put on their cars waiting for rides. That’s unfair, advocates say, because drivers can spend hours each day waiting for rides, and by just being available to give rides, they’re performing a service to the companies. If that time is taken into account — as well as drivers’ expenses for gas, maintenance and depreciation — the median Uber or Lyft driver in Los Angeles and San Francisco made about $9.09 an hour, including tips, according to a study from the UC Berkeley Labor Center last year. That’s far less than the local or state minimum wage . What’s made the situation worse, drivers, advocates and academics say, is Uber and Lyft have been engaged in what’s been labeled “algorithmic wage discrimination.” The companies previously paid drivers — and charged riders — a flat rate based on the actual distance and time each ride required. But Uber and Lyft now set the price for riders and drivers upfront, which academics and advocates say the companies base in part on their knowledge of drivers’ and riders’ histories. Drivers, academics and advocates contend the companies offer to pay drivers the lowest — and charge riders the highest — price the firms think each party will accept, resulting in offered rides to drivers that are effectively below minimum wage.In one, Uber broke down his earnings for a recent week. Not including tips, customers paid $1,412.10 for the rides he gave them, but his take of that was only $583.81. In the other, Lyft offered to pay him $6.08 for a 9.2-mile ride in Merced that the company estimated would take 29 minutes to complete, including the pickup. That amounts to about $12.58 an hour, and doesn’t account for his gasoline costs or the wear and tear on his car. Things have gotten so bad with the companies’ algorithmic pricing that Augusto only accepts about 4% of the rides they offer him, he said.Nicole Moore has similar frustrations with Uber and Lyft and Prop. 22. A part-time ride-hail driver in the Los Angeles area, Moore has been giving rides since 2017. As the president of the 20,000-member Rideshare Drivers United, she has seen or heard from members similar examples of drivers being paid below minimum wage for rides in the wake of the change to algorithmic pricing. Sometimes drivers feel like they have to accept such pittance wages because they need to hit a certain number of rides to qualify for the health insurance subsidy or to get a certain company-provided bonus, she said. “We are tied to an algorithm,” Moore said. “They know when we are desperate. They will pay us as little as possible.” Moore is strongly in favor of drivers having the right to collective bargaining. But she worries that AB 1340 won’t go far enough to protect workers. The bill is patterned after a similar law Massachusetts voters passed last fall. But the Massachusetts law wasn’t even as strong as the National Labor Relations Act, which many labor activists consider already too weak to protect workers’ rights to organize, Moore said. Among other things, the law didn’t explicitly give workers the right to strike, she said.In terms of whether AB 1340 will be good or bad, “the devil is definitely in the details,” Moore said. “What I hope is that this is the beginning of an iterative process where we really figure this out,” she said. If you have a tip about tech, startups or the venture industry, contact Troy Wolverton at twolverton@sfexaminer.com or via text or Signal at 415.515.5594.
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