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An Australian perspective on the Uber/Lyft representation debate in California

28th August, 2019

This is an edited text of my presentation at the ACTU/Melbourne Law School Symposium on the Centenary of the ILO, 18-19 July 2019

One of the biggest challenges for trade unions is the gig economy. Here we have a business model that has shamelessly inverted our traditional assumptions about employment regulation.

‘Flexibility’ is held up as the holy grail, to explain gig workers being prepared to sacrifice minimum wages, unfair dismissal rights and other employment protections.

This contracting model has been adopted not only to absolve platforms from responsibility for minimum labour standards – but also to keep unions at bay.

Most gig operators flatly refuse to engage with unions. Instead they offer insipid forms of voice which they control, for example:

  • Uber Australia says it provides feedback channels through roundtables and focus groups.
  • In the UK, there’s ‘Uber Engage’ – a network of local advisory groups with driver representatives.

In the USA, the representation of rideshare drivers has become a hotly contested issue.

The Machinists Union established the Independent Drivers Guild in New York City in 2016.

The IDG has done some good work, including lobbying for minimum wage increases for drivers from New York’s Taxi and Limousine Commission; and advocating on driver concerns about safety, mental health and opposition to the city’s traffic congestion tax.

But the Guild is partly funded by Uber. Therefore it’s faced criticism that it has given up on contesting driver categorisation, and gone in harder on competitors like Lyft.

There’s a long history in employment relations of ‘company unions’ – bodies that can’t effectively represent workers because they’re compliant and beholden to management.

Uber and Lyft are masters of this approach, as we can see now in California. Their CEOs penned a joint op ed in the San Francisco Chronicle on 12 June, saying they would offer drivers more benefits if their independent contractor status is preserved, and: 

‘We can also give workers more of a say in the decisions affecting their lives and livelihoods … We can start by forming a new driver association, in partnership with state lawmakers and labor groups, to represent drivers’ interests and administer the sorts of benefits that meet their highly individual needs.

Why are the rideshare companies now talking about setting up driver collectives?

Because the regulatory door is closing in on them.

  • There’s a bill before the California legislature called AB5’, which would make it easier for platform workers to be categorised as employees.
  • The bill enshrines the April 2018 ruling in a case called Dynamex, where the Supreme Court of California found that on-demand couriers were employees covered by that state’s minimum wage orders.
  • Therefore Uber, Lyft and other platforms have engaged in furious lobbying to prevent AB5 becoming law. They have used tactics straight out of the play-book of the US union-busting industry.
  • Drivers have been wheeled out to protest against threat posed by AB5 to, you guessed it, the flexibility they treasure. Some were offered up to $100 to cover costs in attending an anti-AB5 rally in Sacramento. The “I’m Independent Coalition”, funded by California Chamber of Commerce, covered these costs.
  • The rideshare companies also asked drivers to sign a petition against AB5. There’s evidence that some drivers were confused when this appeared as an in-app message, thinking they had to accept it in order to keep using the app.
  • Divisions have arisen within mainstream unions too: the New York Times reported in late June that Californian officials of the Service Employees International Union had met with Uber and Lyft about establishing a drivers’ organisation, again premised on retaining contractor status. National SEUI leaders rejected that approach.

It’s starting to look like a classic ‘divide and conquer’ strategy. With 100,000 rideshare drivers in California, the platforms are investing heavily in knocking off AB5. Creating a captive worker association is a key part of the plan.

Back in Australia, debate about regulating platforms isn’t quite so colourful. The case law hasn’t been helpful. The Fair Work Commission has on three occasions decided that Uber drivers are contractors, and the Fair Work Ombudsman reached the same conclusion after a two-year investigation.

Unions have not been as active in contesting the contractor model through litigation, as they have in pushing for legal change. After the federal election, though, that road looks like a dead end.

There may be scope for different outcomes to be obtained in other test cases. This week, the Transport Workers Union has backed a Federal Circuit Court claim by former Deliveroo rider Jeremy Rhind alleging sham contracting – that he was actually an employee, and was underpaid compared with entitlements under the Road Transport and Distribution Award.

But even if the contractor categorisation holds in this or other cases, the TWU’s involvement shows that unions have a vital role to play in organising and representing platform workers.

They also have some unexplored legal avenues for doing so under Australian law, such as running harsh/unfair contract review cases under the Independent Contractors Act; and (if the competition law constraints can be relaxed) bargaining with the platforms over rates, rest periods, and managerial control through algorithms.

Whatever form it takes, the collective voice of platform workers must meet the essential preconditions for genuine freedom of association – it has to be strong, independent from management and grounded in legal rights and protections.

In the end, that’s what the fight over AB5 in California is really about, and it’s a contest being waged by unions globally.


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