A deal allowing California’s app-based drivers to unionize breaks new ground in long-running worker fights with ride-hailing companies, testing a new method of securing employment protections in the industry.
California lawmakers are close to approving a state-supervised system that lets drivers collectively bargain over pay, benefits, and working conditions.
The California bill and a similar Massachusetts effort are the nation’s first statewide models to let ride-hail drivers unionize.
The drivers can’t take advantage of the employer-employee bargaining scheme under the National Labor Relations Act because the companies classify them as independent contractors. Their status was cemented in California by Prop 22, a 2020 ballot measure backed by the ride-hailing industry.
How will the bargaining system work?
A union, like the Service Employees International Union that backed the bill, could seek state certification to represent ride-hail drivers across California. It must show 10% of the most-active drivers support the unionization effort to get initial recognition and gain access to driver lists.
A union next needs to show support from at least 30% of the most-active drivers to win formal state certification as the sole bargaining representative. But if a competing union also shows 30% support, or a group of drivers shows 30% of the most-active drivers oppose the union, then the state must run a union election requiring majority support for certification.
Certification at 30% support is a notable departure from federal labor law. Under the federal model, companies sometimes voluntarily grant “card check” recognition to unions once they top 50%, rather than demanding an election, but it isn’t mandatory nor the default option.
Similar to federal law, California would require the drivers’ union and the ride-hailing companies to bargain in good faith and bar “unfair labor practices,” such as a company penalizing drivers for union involvement. The state’s Public Employment Relations Board would investigate charges.
What are the potential pitfalls?
The model is designed to give workers leverage to negotiate better pay and benefits, and is estimated to potentially affect around 800,000 drivers. But how it will play out is tough to predict.
The California legislation specifies that the bargaining unit for a union would have to cover all ride-hail drivers statewide. Organizers face the practical hurdle of securing signatures of support from drivers scattered in vehicles across California.
That problem is partly addressed by arguably lower thresholds for union certification than those under federal law. The required 30% support applies only to active drivers, or those in the top half of drivers based on the number of rides completed in the past six months. Those driving fewer than 20 rides are excluded.
What will drivers likely win?
Drivers are poised to to focus collective bargaining on getting better minimum pay guarantees and protections against termination—known as deactivation—without good cause or appeal rights.
They also could advocate for better access to benefits such as health insurance or retirement, plus insurance for on-the-job injuries that auto insurance doesn’t cover.
Drivers also could argue for reimbursement of vehicle expenses. That’s been a point of contention in lawsuits accusing the companies of misclassifying drivers, since California requires employers to reimburse job-related expenses for employees, but not for independent contractors.
What do Uber and Lyft stand to gain?
The companies touted the benefits of the bill changing their required uninsured motorist coverage, which they said would save them substantial money and help keep fares affordable.
But perhaps the bigger win, as with other states including Washington and New York that have reached deals to boost driver pay and benefits, is that the California model maintains drivers’ status as independent contractors.
The unionizing bill specifies the organizing and bargaining scheme wouldn’t apply to any drivers who become classified as employees. Independent contractor classification has long been a key part of ride-hail companies’ business model.
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