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Gig workers want a seat at the bargaining table. The feds say not so fast

In this Jan. 31, 2018, photo, a Lyft logo is installed on a Lyft driver’s car in Pittsburgh.
Gene J. Puskar, Associated Press

SALT LAKE CITY — In 2003, Peter Kuel escaped civil war in South Sudan and made his way to the United States.

He found himself in Iowa, and eventually ended up in Seattle, where Kuel started his own taxi company, Ostrich Taxi. It was a one-man operation (Kuel was the only driver), and he liked it: he had control over how he ran his business, from setting his own hours to deciding when and where to pick passengers up.

But that was more than five years ago. Now, Kuel is a Lyft driver. He also drove for Uber for four and a half years, but he said after he was hit by another car last year the company suspended him from the platform.

Kuel usually works 12- to-14-hour shifts. He tries to drive from 2 p.m. in the afternoon until 2 a.m. He has no control over how much he is paid per ride. He gets angry that the ride share companies call drivers like him a “partner.” “There is no partnership,” Kuel says.

He is just one of a growing number of contract workers making up the American workforce. One out of every five jobs in America is a contract position, according to a poll conducted by NPR and Marist in 2017. NPR estimated contractors and freelancers could dominate half of the workforce within the next 10 years.

Contract work has caught fire in the past few years, by one estimate almost all growth in the job sector came from “alternative work arrangements” between 2005 and 2015 according to NPR, as companies like Uber and Lyft build their businesses by cultivating a vast network of contract drivers. While contract labor is nothing new, “it’s gotten more attention recently because so many businesses in the gig economy very directly and frankly say, we’re not going to be accountable to workers,” said Rebecca Smith, director of Work Structures at the National Employment Law Project, a nonprofit that advocates for higher wages and worker protections.

The ride-share companies argue that they are platforms, not employers and that they simply connect drivers with riders. To be a platform is to be free.

But advocates like Smith argue that contract workers lose out on a myriad of rights under this model: minimum wage, overtime, anti-discrimination protections, paid family leave, and unemployment insurance to name a few.

Critics claim that classifying drivers for ride-sharing apps like Uber and Lyft as independent contractors is wrong. California recently passed Assembly Bill 5, which was viewed as an attempt to force companies like Uber and Lyft to classify drivers as employees. New Jersey also slapped Uber with a $650 million bill for misclassifying its drivers.

So far, those efforts appear futile: Uber continues to claim that AB5 does not apply to the company and it will not pay the $650 million because it does not misclassify its workers.

Uber did not respond to several requests for comment.

The battle for worker classification is just one side of the conflict though. Tension has also risen over the protections granted to contract workers in general — from the control platforms have over how workers do their jobs to pay structures that contract workers say adds up to being paid less than minimum wage.

The fight over collective bargaining

In 2014, Kuel decided to fight for the right of ride-share drivers to collectively bargain. He said he wanted a seat at the table when it came to wages and how the platform operated. “We needed a voice,” Kuel said.

Collective bargaining is a special right that allows employees and unions, on behalf of employees, the right to get together and demand better wages, hours and working conditions. It acts as a special exemption, because under federal antitrust laws, it is illegal to get together and set a price.

Seattle passed a law in 2015 allowing ride-share drivers to do just that.

“We didn’t get very far,” Matthew Eng, a staffer for the city of Seattle who was responsible for implementing the ordinance, said. The law allowed a qualified driver representative to bargain on behalf of ride-share drivers. The local teamster branch applied for the role and was approved.

Then the Chamber of Commerce sued the city of Seattle, and the ordinance was put to a stop. The Federal Trade Commission and Department of Justice filed briefs in support of the suit that argued allowing the drivers to collectively bargain would amount to an antitrust violation. They argued that allowing contract workers to collectively bargain would be akin to price fixing — essentially when companies (or people) that are supposed to be competitors in the market get together and decide they are going to charge a certain price for a product (which is illegal).

Two academics laid out the argument of workers in The Nation last month, “When Uber engages in price coordination, it’s legal. When gig workers do, they’re considered to be acting collusively.”

The Seattle ordinance is still wrapped up in the legal process, stalled for an indefinite period of time, but how it shakes out could have broad implications. More workers across all sectors are being put into the contractor status, where they lack the protections of traditional employment, said Marshall Steinbaum, a professor in the economics department at the University of Utah. Now it seems that if they “try to organize or collectively bargain in the status of contractor, they will also face the penalties of antitrust,” Steinbaum said.

Economists worry that laws designed to break up larger corporations are being used as a cudgel against workers and small businesses instead.

Workers move forward in different ways

While the courts try to determine whether contract workers can collectively bargain, drivers like Kuel must continue to eke out a living. Kuel has two kids, a wife and his parents to support.

He has turned from collective bargaining attempts to other means of action. He is pushing for laws to protect drivers who are suddenly banned from the platforms with no recourse. You can buy a new car or take out a loan in hopes of becoming a ride-share driver, start driving for Uber and Lyft, and the company might suddenly ban you, Kuel said.

Seattle has taken a different tack, and plans to pass a series of laws that grant ride-share drivers protections and rights that they cannot collectively ask Uber and Lyft for, such as a guaranteed minimum wage. In September, Seattle Mayor Jenny Durkan released a proposal mandating minimum wage and the creation of a driver resolution center where ride-share companies and drivers could resolve disputes over deactivations.

Kuel is still hopeful, despite the setbacks of the last few years.

“The world is not permanent. We are in a state of change, always.”