San Francisco joins the fight to make Uber and Lyft drivers employees

The debate over how to classify gig workers heats up in California as state mulls new law.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
4 min read

Uber drivers protest in front of the company's San Francisco headquarters in May.

Dara Kerr/CNET

So many people showed up to a San Francisco Board of Supervisors committee hearing on Friday that the city had to open an overflow room. The topic at hand: Uber and Lyft drivers' rights.

The city's Public Safety and Neighborhood Services Committee convened to discuss a resolution that would support a proposed California state bill that could require Uber and Lyft to make their drivers employees. Currently, drivers are classified as independent contractors, sometimes referred to as gig-workers, which means they don't get benefits including Social Security, health insurance, paid sick days and overtime.

More than two dozen drivers took to the podium with similar stories. They said they've seen lower pay, higher costs and longer working hours as the cost of living has risen over the years. When they get sick, they said they can't afford to take time off.

"Since Lyft's incentives have traditionally been tied to number of rides, rather than time on the road, I'm encouraged to push myself to the limit," said Edan Alva, who's a Lyft driver in San Francisco. "I feel trapped like one of those caged hamsters running in a wheel."

The issue of gig worker classification is nothing new. Lawsuits have been brought against both Uber and Lyft going back as far as 2013. Since then, several cities and states have examined the matter. While New York City passed minimum wage laws for drivers last year, the National Labor Relations Board said last month it believes drivers should be classified as contractors instead of employees. Under California's proposed Assembly Bill 5, drivers could be classified as employees, provided benefits and have the right to collectively organize.

Uber and Lyft appear to be opposed to AB 5. One reason why is that the companies will have to re-work their business models if they're required to turn their drivers into employees. Not only will they have to pay worker costs, they will also have to manage a workforce of tens of thousands of drivers in California.

Driver protections

In a rare showing of cooperation, Uber and Lyft have banded together over the issue. The CEOs of both companies wrote a joint op-ed in the San Francisco Chronicle earlier this month saying they wanted to work with the state to allow drivers to remain independent contractors. In return, the companies said they'd offer drivers a "commitment to driver pay" and let them form a "new driver association."

"It's also no secret that a change to the employment classification of ride-share drivers would pose a risk to our businesses," the CEOs wrote.

The two companies also sent messages to all California drivers saying that if they're classified as employees, they could lose their flexible work schedules. The messages encouraged drivers to contact state legislators to say what they value about their work. A Lyft spokesman said more than 30,000 emails on the topic have been sent to legislators since it sent out its message.

"Lyft is advocating for an approach in line with the interests of our driver community," the Lyft spokesman said in an email. "Our goal is to preserve drivers' independence and flexibility." 

An Uber spokesman said the company isn't taking a position on AB 5.

"We are not seeking a carve out, rather we are seeking new legislation that would give drivers the protections and commitments that they are asking for while providing protections for our business model," the Uber spokesman said.

Nearly every driver who spoke at the committee hearing on Friday said they wanted California to pass AB 5 and they wanted San Francisco to support the bill. Many cited a May study by the Economic Policy Institute that says the average wage for a US ride-hail driver is $9.21 per hour after deducting expenses, such as gas and maintenance.

"The only benefit I get with Uber and Lyft is diabetes, high blood pressure and high cholesterol," said Al Aloudi, who has driven for the two companies since 2015. "Uber and Lyft give us messages that say AB 5 is about flexibility. AB 5 is not about flexibility, it's about our rights."

After hearing from the drivers, the four supervisors at the committee hearing all agreed more had to be done to protect gig workers. Supervisor Rafael Mandelman, who is chairman of the committee, got choked up saying how hard it was to hear their stories.

"I was thinking about the arrogance of people a decade ago that promised disruption, and boy have they delivered," Mandelman said. "In large part relying on a business model that dismantles more than half a century of advances in worker protections."

He and the other supervisors pledged to get the entire Board of Supervisors to pass the San Francisco resolution supporting AB 5. Mandelman said he'd be surprised if the resolution didn't pass unanimously.

AB 5 passed the California State Assembly on May 29 in a 53 to 11 vote. The State Senate is scheduled to hold a hearing on the bill on July 10.

Originally published June 28.
Update, July 1:
 Amends language on possible outcome if AB 5 is signed into law.