It has been a big week for gig workers: A historic labor union was formed, President Biden may move to classify gig workers as employees, and Instacart has agreed to pay $46.5 million in compensation.
Gig workers launch union
California gig workers proclaimed the launch of a historic statewide union on Wednesday with a march through the headquarters of several giants of the gig-work industry.
The California Gig Workers Union, potentially representing as many as 30,000 workers, has been formed to call for gig workers’ right to collective bargaining and unionization, which the passage of Proposition 22, in 2020, denies. This new network brings together the strengths of two existing gig worker-advocacy groups, the Mobile Workers Alliance in Southern California and We Drive Progress in Northern California.
On Wednesday, workers, some from Los Angeles, withstood the bitter wind to march from Uber’s headquarters in Mission Bay to those of Lyft and DoorDash. “Stand up! Fight back!” they proclaimed.
“Brother and sisters, we are out today because this company needs to be reminded that we are human beings, not machines that they can just throw away. We will not be silent about the attack we face on the job, the dangers we face,” said Hector Castellanos, an Uber and Lyft driver, and member of the California Gig Workers Union.
Above him towered Uber’s immense headquarters and the Chase Center, home of the Warriors.
“We deserve the right to have a union. Now we are together. It’s a big day for the California Gig Workers Union,” he added.
Mike Robinson, a seven-year Lyft driver in the LA area and a member of the Mobile Workers Alliance since 2018, was excited. “I feel it’s good! We need it,” he said. “They constantly lower our pay, or there’s deactivation, no worker’s rights, and then they lie to the public.”
District 4 supervisor Gordon Mar referred to the day as “ground zero for the gig economy,” and expressed support for the workers’ pushback against tech company exploitation.
“They would not be billionaires if it were not for you guys,” echoed Honey Mahogany, a candidate for District 6 supervisor.
The union was formed with the involvement of Service Employees International Union (SEIU) Locals 721 and 1021, two influential unions in the city.
Biden administration takes steps toward making gig workers employees
On Tuesday, a momentous victory for gig workers drew nationwide attention as the Biden administration prepares to reclassify more gig workers as employees rather than independent contractors, according to the Wall Street Journal.
After the announcement, gig stocks dropped: Uber by 10 percent, Lyft by 12 percent and DoorDash by 6 percent.
The proposed rule would create stricter criteria to decide when companies might classify people as contractors as opposed to employees. The Department of Labor will seek public input within the next 45 days, though the rule may not be finalized until next year.
“We have seen, in many cases, that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” Secretary of Labor Marty Walsh said in a statement to the Journal. “Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages.”
In response, the tech giants stressed that it was actually the gig workers who preferred the flexibility that came with being independent contractors.
Uber’s head of federal affairs, C.R. Wooters, told the Journal, “In a time of deep economic uncertainty, it is crucial that the Biden administration continues to hear from the more than 50 million people who have found an earning opportunity with companies like ours.”
Lyft said in a blog post that “Lyft will continue to advocate for laws such as the one in Washington state, which gives workers what they want: Independence plus benefits and protections.”
Instacart’s financial woes continue
On Monday, Instacart agreed to pay $46.5 million to settle a lawsuit with the city of San Diego, California, on the grounds that the company misclassified employees as independent contractors, according to San Diego City Attorney Mara W. Elliott. The lawsuit involves 308,000 people who worked for Instacart in California from September, 2015, to December, 2020. For workers who accumulated longer working hours during this period, the restitution will amount to thousands of dollars each.
Instacart, however, does not view the settlement as an admission of wrongdoing. “Instacart has always properly classified shoppers as independent contractors, giving them the ability to set their own schedule and earn on their own terms,” the company said in an email to the San Diego Union-Tribune. “We remain committed to continuing to serve our customers across California while also protecting access to flexible earnings opportunities for Instacart shoppers.”
The lawsuit was filed in Septmber, 2019, and its settlement enforces the classification standards established in Assembly Bill 5 (AB5). After the passage of Prop. 22 in 2020, however, full enforcement of AB5 faces additional challenges, Lorena Gonzalez Fletcher, then-Assemblymember and the driving force behind AB5, told the Union-Tribune in a phone interview on Tuesday.