We talk a lot about California’s status as a labor laboratory, and the Golden State doesn’t want to lose that dubious title. So it’s no surprise that when California found itself running slightly behind a few other states’ efforts on rideshare unionization, it made a giant, and likely unsustainable, leap to catch up. In doing so, state lawmakers announced their actions right before Labor Day. And ironically, the results probably won’t be good for workers.
To back up a moment, Massachusetts voters recently passed a bill that allows Uber and Lyft drivers to unionize, and California is now following suit through a deal between lawmakers and rideshare companies Uber and Lyft. Gov. Gavin Newsom endorsed the resulting passage of two bills, and now, the experiment will go forward through these mechanisms:
No worker reclassification: This new legislation will not classify rideshare drivers as employees. They will remain independent contractors, and AB 1340, which was sponsored by SEIU and Democratic lawmakers Buffy Wicks and Marc Berman, gives rideshare drivers the ability to unionize and collectively bargain over wages and benefits. Meanwhile, SB 371 grants Uber and Lyft a slight reprieve by limiting the amount of uninsured motorist insurance that the companies must carry for rideshare drivers.
Pulling a rabbit out of a hat: AB 1340 also lays a foundation for sectoral bargaining for gig work drivers. This is a maneuver that we’ve seen before in California via the recent AB 1228, which led to a 25% overnight minimum wage increase for fast-food workers. That law also led to preemptive mass layoffs and ongoing financial nightmares for franchisees.
Sectoral bargaining is also part of a new union playbook for Big Labor to exert control over entire industries while skirting the NLRA’s requirements. Through AB 1228, the creation of a Fast Food Council suggests an illusory union that makes no guarantees for workers in improving their workplace conditions, but does ask them to opt into paying dues.
No lessons learned: California lawmakers also conveniently overlooked how another recent law, AB5 – which SEIU claimed would improve drivers’ working conditions – prompted waves of independent contractor layoffs in other industries.
Further down the line: After SEIU helped open the door for sectoral bargaining for fast food workers and rideshare drivers, expect Big Labor to attempt the same in other industries. Additionally, efforts to unionize rideshare drivers continue in Illinois and New York. Meanwhile, Washington and Minnesota have new laws that establish pay floors for gig drivers.
What’s really (not) happening: Following the passage of California’s two new rideshare driver laws, Gov. Newsom declared that this legislation “will empower hundreds of thousands of drivers while making rideshare more affordable for millions of Californians.” How exactly rideshare fares will shrink with these employers facing higher labor costs remains a mystery.
Ultimately, these laws should be viewed as a state-sanctioned model for organizing while sidestepping the NLRA. In turn, this legislation paves the way for rideshare drivers to be bound to a union constitution, which will remove several freedoms associated with being independent contractors.
What a way for California to mark Labor Day.
