A Plan to Tame Labor Unions for Uber and Lyft Has Been Scrapped In New York

The latest push by ride-hail companies Uber and Lyft to rewrite regulations in their favor finally fell apart in New York this week, Bloomberg reported on Tuesday. 

In the year since writing Proposition 22 in California and successfully spending over $200 million to pass the ballot measure’s exemptions from state labor laws, gig companies have quietly sought compromises with labor unions nationwide to preserve the misclassification of gig workers as independent contractors. The sectoral bargaining bill, which was to be tabled by New York state senator Diane Savino, was painted by advocates as allowing workers to collectively bargain for a deal that determines working conditions across an industry or sector. However, labor advocates saw it as ultimately enshrining the gig economy’s business model in law.

Support collapsed once a draft copy was leaked, with a number of labor groups, politicians, and public figures condemning the deal as it offered limited collective bargaining rights without reclassification to employees. New York State legislature is also set to convene on Thursday until the next session.

Los Deliveristas—a group of migrant food delivery workers—released a statement once news broke of the deal that it was "opposed to any legislative proposal that is pre-negotiated without delivery workers’ input, and that directly impacts our industry, work conditions, and the well-being of our families." The local branch of the Service Employees International Union (SEIU), Local 32BJ, also opposed the deal saying "“workers should at minimum maintain gains made by workers at the local level.”

“We could never get everybody together,” Savino told Bloomberg regarding the plan’s scrapping. “It’s a complicated problem, but the only way we’re going to get to a solution is people are going to have to put aside their own agendas and figure out, How do we solve it?”

Since news of the bill was first reported last month, it has been under intense scrutiny from some labor groups and activists as a compromise. On May 17, Bloomberg reported that the Transport Workers Union (TWU) and New York State AFL-CIO were enthusiastically backing a compromise with Uber and Lyft, but details about the bill were scant. "I had every intention of staying away from it, and now after seeing how much it'll advance gig workers, I'm fully supporting it," TWU President John Samuelsen told Bloomberg at the time. "I actually think it becomes a national model."

In an interview with Motherboard that week, Samuelsen doubled down on his support for the bill despite recent moves by gig companies nationwide and in Canada to propose compromises that ultimately benefit themselves and preserve their exploitative business models. 

"This is what won me over: the bill is designed really to do two things,” Samuelsen said.  “The first thing is to create a lawful structure in New York State under which drivers can organize into trade unions of their choice. Democratically organized into trade unions and then collective bargaining. It mandates the employers in this industry to bargain--I'm talking about the draft, there is no law, I still at this moment have not seen a full draft in totality."

In a statement to Motherboard after the news that the plan was dead in the water, Samuelsen said that he abandoned the bill after learning of its details and seeing workers voice opposition to it.

“I firmly hold on to the belief that worker self-determination should be the driver of everything, whether it's the pursuit of legislation in localities like New York City or it's the pursuit of a New York State bill that would allow for workers to organize and collectively bargain,” Samuelsen told Motherboard. “If and when the Deliveristas say they support a bill that allows for those workers to organize in New York State, then that's when I'll support the bill and use the resources of the TWU to accomplish it.”

Uber and Lyft did not immediately respond to Motherboard’s request for comment. 

In May, Bloomberg published a draft of the bill that raised questions about why labor groups were supporting it to begin with. The legislation would have created two large bargaining units: one for app-based ride-hail drivers working at firms like Uber and Lyft, then another for delivery workers at firms like Instacart, Amazon, DoorDash, and Grubhub. 

According to the bill’s draft text, workers would be barred from striking, boycotting, or demonstrating in protest of working conditions. Furthermore, the unions would end up being funded not by workers but by a 10 cent customer surcharge―called a “representation fee” in the draft bill—on each delivery or ride in the state.

At the same time, the bill would prevent localities and cities from passing legislation concerning app-based work. Labor Notes, which also reported on the draft legislation, pointed out that local governments “could no longer create specific minimum wages for app workers or rules about their working conditions” while existing rules such as New York City's pay floor or for-hire-vehicle license cap would be thrown out. 

This is not Savino’s first attempt to pass such legislation. In 2019, she introduced the Dependent Workers Act days before the end of the legislative session which sought to create a new category of worker that could collectively bargain but was not given basic guarantees like a minimum wage or workers compensation. That bill was also criticized on similar grounds, its support eventually collapsed, and the bill was dead by the session’s end.

Savino did not immediately respond to Motherboard’s request for comment.

Eventually, the bill was dropped by Savino on Tuesday, who also tried to pass a similar bill in 2019 but which quietly died after facing similar criticism to this 2021 bill. She told Bloomberg that she was intent on trying again next year because talks this year were "sabotaged" thanks to leaks "by people who wanted to make sure we didn't get anywhere." According to Bloomberg, Savino will attempt to introduce a bill when the legislature reconvenes in January 2022.

"Uber thought that their old playbook would work in New York State in 2021. But the narrative has changed," Bhairavi Desai, the executive director of the New York Taxi Workers' Alliance who criticized Savino’s 2019 bill, said in a statement. “People see through their company union and their boss lies. Labor and community groups came together like never before and sent Uber and Lyft crawling away from this legislative session with their tails between their legs."