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Legislation Could Radically Change Gig Workers’ Lives. Companies Don’t Want That to Happen

CEOs are couching their anti-labor stances in progressive-sounding language

A man on a bicycle, carrying a package of food on his back.
Courier on bicycle delivering food.
Photo: Daisy Daisy / Shutterstock

On July 18, Postmates co-founder and CEO Bastian Lehmann published an op-ed on CNN titled “Gig workers deserve a better deal than we have given them” calling for a “new deal” that brings together workers and companies across the gig economy “for the future of work.”

In the op-ed, Lehmann writes that on-demand delivery and transportation companies — Postmates (which is headed toward an IPO), Uber, Lyft, etc. — should start treating organized labor as “working partners” rather than “sparring partners.” Companies, he continues, must also work with policymakers for pro-worker and pro-innovation solutions. Lehmann then outlines four principles to chart a new way forward:

  1. Giving workers a voice, such as a worker forum or some way to “air grievances, appeal disciplinary actions and advocate for reforms.” Lehmann also calls for states to establish commissions that establish industrywide standards on benefits, conflict resolution, and protection from discrimination.
  2. Paying at least the minimum wage, with a sector-wide earnings floor. Gig workers are paid by the task rather than hourly, Lehmann writes, but “the bottom line should be the same: If you work for a full hour, you should earn at least the minimum wage.”
  3. Providing workers with benefits like health care, disability, retirement savings, accident insurance, and career development programs through an industry-wide benefits fund that tech companies pay into.
  4. Regulators and lawmakers clarifying the rules surrounding classification of gig workers as independent contractors or employees.

On the surface, this call for “a new deal that offers certainty and dignity for gig workers across America” sounds impressively progressive, with Lehmann coming across as enlightened compared to, say, Instacart’s CEO, who a few months ago was forced to apologize for tip theft, or DoorDash’s CEO, who has faced scrutiny for similar practices. But a closer read makes it apparent that Lehmann’s piece hits all the same beats as an op-ed authored by the heads of Lyft and Uber — which asked California to compromise on the state’s AB5 bill that would make it harder for companies like theirs to classify workers as independent contractors, and thus cost companies a lot more money — just in slightly more sympathetic packaging.

AB5, which was passed by the State Assembly in May and is now up for debate in the Senate, codifies the California Supreme Court’s May 2018 Dynamex ruling that used a three-pronged “ABC” test to determine whether a worker qualified as an employee or an independent contractor. Under the ABC test, a worker is considered an employee unless the employer proves otherwise by a contractor meeting all of these requirements: a) the worker is free from the control of the company, b) the worker does work that isn’t central to the company’s business, and c) the worker has an independent business in the same industry.

Lehmann’s op-ed is carefully, artfully ambiguous when it comes to AB5. He doesn’t explicitly state whether he is for or against it, but instead suggests that AB5 “isn’t enough,” framing his proposal as a new deal that goes “further.” This creates the impression that his proposition is radically more progressive, when in reality, the substance is virtually indistinguishable from the points set forth by the demonstrably anti-AB5 Uber and Lyft.

Postmates, when contacted for comment for this article, made the company’s stance on AB5 clearer in similarly couched language. A statement from a company spokesperson reads:

We immensely respect Assembly member Gonzalez-Fletcher’s leadership on AB5 and the Senate Judiciary Chairman’s role in addressing issues of the future of work. And as Governor Newsom confronts its first Future of Work test as a State, we are committed to working through a legislative process that does not seek simply a carve out or exemption from Dynamex — but rather one that keeps labor and industry at the table to balance new standards of gig worker voice, pay, and benefits with the type of worker flexibility never before seen in historical employment law in this country. In the same way that you can not sign up for a shift at Starbucks at 8AM, then run across the street to Peet’s to make a latte; and then come back an hour later to resume your shift at Starbucks only to go clock out because you need to complete a homework assignment — the level of flexibility realized in truly on-demand work is valued by over 80% of our fleet in California. Our commitment is to raising the standard of worker benefits and balance them with worker flexibility.

The passing of AB5 would fundamentally disrupt the business models of gig companies like Postmates, Uber, Lyft, Instacart, and DoorDash, which are predicated on the low costs of independent labor. Such companies have justified the low wages and lack of benefits given to their gig workers by touting the jobs’ flexibility (despite the fact that labor laws don’t prevent companies from offering employees flexibility), as Postmates does in the above statement, or by maintaining that such jobs were never meant to be full-time. (On a similar note of justification, in Lehmann’s op-ed, he defends a much-criticized recent decision to tweak Postmates’ payment rates and remove a $4 minimum per-job guarantee by claiming that “more frequent deliveries can ultimately mean more cumulative earnings over time.”)

The reality is that more and more of the American workforce is joining the gig economy, whether by choice or a lack thereof, and smaller-scale fixes like a tech company-contributed communal benefits fund are not the same as lasting structural changes that come from legislation. Weaponizing progressive-sounding rhetoric in the fight against a workers-rights bill — and using the strawman of “flexibility” to justify it — is disingenuous. And it’s not fooling anyone.

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