Uber, Lyft pull out the stops to defeat bill that'd make drivers employees

The two companies email millions of Californians, saying Assembly Bill 5 could lead to less-reliable rides. They also pledge to spend $30 million each to take the issue to voters.

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
5 min read
Enlarge Image

Lyft added a click-through banner to its rider app, which takes users to a petition opposed to Assembly Bill 5 as it's currently written.


The battle over how to classify ride-hail drivers in California has intensified, with neither side backing down. After a caravan of drivers protested across the state earlier this week, Uber and Lyft began widely circulating online petitions on Wednesday. The companies' goal: Get people to join them in defeating Assembly Bill 5 as it's currently written before it becomes law.

If passed, the California state bill could allow for ride-hail drivers to be classified as employees rather than independent contractors, their current status.

"AB 5 may lead to hundreds of thousands of California Lyft drivers out of work," Lyft's petition reads. "As a result, passengers could wait longer for rides or risk losing reliable access to rideshare altogether."

Uber issued similar warnings in its petition and said, "Forcing all drivers to become employees could drastically change the rideshare experience as you've come to know it, and would limit Uber's ability to connect you with the dependable rides you've come to expect."

Uber and Lyft drivers are now 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. Many drivers say this system has led to exploitation. They say they've seen lower pay, higher costs and longer working hours as the cost of living has risen over the years.

Advocates for AB 5 call the ride-hailing companies' petitions a "misinformation campaign" and "dishonest." Mobile Workers Alliance and Gig Workers Rising, which have been organizing drivers around AB 5, say the bill is about workers' rights.

"Both of these companies are doing what looks like a very desperate last-ditch effort to try to get their customer base to go against drivers' rights," said Coral Itzcalli, spokeswoman for Mobile Workers Alliance. "The scheme of independent contractors is what companies have used for decades. What it does is saddle the cost of the business on the average worker."

Uber and Lyft have both said their business models hinge on drivers staying independent contractors. When Uber filed to become a publicly traded company with the US Securities and Exchange Commission in April, it said, "Our business would be adversely affected if drivers were classified as employees instead of independent contractors."

Both Uber and Lyft said Thursday that if they can't strike a deal on AB 5, they'd sponsor a ballot initiative in November 2020 to take the issue to California voters.

Doubling down on AB 5

Ride-hail drivers and advocates for AB 5 have been holding regular protests and rallies across California in support of the bill. Earlier this week, a pro-AB 5 caravan of roughly 70 Uber and Lyft drivers made its way 500 miles from Los Angeles to Sacramento. The procession stopped in San Francisco to hold a protest in front of Uber's headquarters. It was joined by Democratic presidential candidate Pete Buttigieg.

"I'm here because where I come from, 'gig' is another word for 'job,'" Buttigieg said at the protest. "If you're working a gig, that means you ought to be protected as a worker."

Three other Democratic presidential candidates -- Kamala Harris, Bernie Sanders and Elizabeth Warren -- have also lined up behind AB 5

As the caravan traveled north, Uber and Lyft posted their petitions online. Uber said it emailed the petition to more than 1 million of its riders and more than 150,000 of its drivers in California. It also made a website called "Independent Driver" that's filled with stories from drivers who say they want to remain independent contractors.

Lyft said it emailed 2.5 million California riders and drivers asking them to take action on AB 5. Lyft also added a click-through banner in its app that takes users to the petition. The company additionally created an online landing page that assists drivers and riders in calling their representatives to say, "Please take a leadership position in fixing AB 5."

AB 5 was first introduced last December by state assembly member Lorena Gonzalez. And in a rare showing of cooperation, Uber and Lyft have banded together to defeat the bill as it's written.

The CEOs of both companies wrote a joint op-ed in the San Francisco Chronicle in June saying they wanted to work with the state to allow drivers to remain independent contractors. And they've sent messages over the past few months to all California drivers saying that if they're classified as employees, they could lose their flexible work schedules.

Uber and Lyft also reportedly recruited drivers to rally against AB 5 in Sacramento in July, according to the Los Angeles Times. Uber offered the drivers a $15 lunch voucher and Lyft said it would pay drivers $25 to cover parking.

Now the two companies say they'll spend millions more to try and keep drivers independent contractors. Both Uber and Lyft said Thursday they'd spend $30 million each to sponsor a ballot initiative in November 2020 that would exempt them from AB 5, according to the San Francisco Chronicle. Shortly after their announcement, food delivery company DoorDash said it'd also add $30 million to the effort -- bringing the total to $90 million.

Alternative to AB 5?

AB 5 passed the California State Assembly in May in a 53-11 vote, and now the State Senate is expected to vote on the bill in coming days.

As an alternative to the bill, Uber said Wednesday that it would offer drivers "a minimum of approximately $21 per hour while on a trip, including the costs of their average expenses." It also said it would offer access to benefits, such as paid time off, sick leave and compensation if injured while driving for the company. Additionally, Uber said it would let drivers have a "collective voice" at the company and the "ability to influence decisions about their work."

Lyft hasn't offered specifics, but it did say it'll give drivers a guaranteed earnings floor, a portable benefits fund and representation within the company.

Mobile Workers Alliance and Gig Workers Rising say $21 per hour while on a trip isn't enough, however. First, the hourly wage would exclude any time drivers wait to be connected with a passenger. And second, as independent contractors, drivers have to cover all of their own expenses, including gas, car maintenance and repairs.

"It's not acceptable," said Leonardo Diaz, who's been driving for Uber and Lyft full-time for the last four years. "We are asking for $30 an hour to cover all the expenses."

Itzcalli from Mobile Workers Alliance agreed and said the ride-hailing companies' alternatives to AB 5 don't do enough to fulfill workers' rights.

"These companies tout themselves as being innovative and creating the jobs of tomorrow," she said. "But the reality is there is nothing innovative about worker exploitation."

Originally published Aug. 29.
Update, Aug. 30:
 Adds information about Uber, Lyft and DoorDash contributing $90 million for a ballot initiative on driver classification. Adds additional information that Uber's $21 per hour wage proposal excludes the time drivers wait to be connected with a passenger.