Last November, California passed Proposition 22, which made it so that companies like Uber and Lyft could classify their workers as contractors instead of employees, avoiding the obligation to give them benefits. Bloomberg has written a great report about how this type of change — replacing regular employees with contractors — could be coming to many other industries across the nation, which could affect millions of workers.
While the law was pushed for by ride-share companies, the article talks about the effects already being seen in other industries, like how grocery delivery workers are being fired and replaced by on-demand DoorDash workers. It also details an op-ed by an Uber investor, talking about how Prop 22 could be used to replace employees with contract workers in various industries, from nursing to agriculture.
Companies moving their workers to independent contract employment, instead of traditional employment, helps them keep their labor costs low. Contract employees aren’t entitled to benefits like health insurance, overtime pay, etc. The companies also don’t have to pay employees for time that they’re on the clock but not carrying out their job duties — if a grocery delivery employee is waiting for an order to come in, the company still has to pay for them to be there, which is not the case if that person works for DoorDash.
We’ve already seen ride-share companies talking about taking Prop 22-like legislation nationwide, and Bloomberg digs into how Uber has plenty of contacts in the Biden administration.
The article also casts some doubt on the idea that unions will be able to stem the tide. It goes into the dilemma labor leaders are facing: do they work with companies to make sure contract workers are getting an okay deal, or do they work against them and possibly lose everything?
Now Uber, after successfully reshaping culture and politics to accommodate its business model, is bending unions, too. Labor groups have to take seriously the prospect that if they don’t come to the table, the companies will write the laws themselves, as they did with Prop 22.
While the future may be uncertain for millions of workers, it’s a good idea to stay informed on what it could look like, so that workers can be prepared if and when similar legislation starts popping up around the country. The Bloomberg article is a great place to start.