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A protester gestures outside the $72 million home of an Uber co-founder after last year’s IPO.
Photo by MARK RALSTON/AFP via Getty Images
There’s a battle royal going on in California right now over whether people who drive for Uber and Lyft and DoorDash should be considered “employees” or “independent contractors.” It’s a fractious debate, everyone has an opinion, and the race is neck and neck.
We’ve heard from activists, lobbyists, tenured professors, “labor leaders,” corporate flacks, lawyers, hired guns, journalists with nothing to lose, and the executives running the companies themselves.
There’s just one thing missing.
So far as I have been able to find out, after talking to people on all sides, not one source – not one – has actually conducted a single, independent, neutral and completely reliable poll asking what the drivers themselves think.
No, really.
So far there have been four polls people are citing. All suggest around 70% of drivers, maybe even more, want to stay independent contractors.
But one of the pollsTherideshareguy
The other three polls? Two were commissioned by Uber UBER, +0.90% – this one and this one and this one – and the third was commissioned by Lyft LYFT, +2.18%.
I’m not making this up. I think I’d rather ask Zoltan the Magnificent on Santa Monica pier.
(Meanwhile, a survey by the the Institute for Social Transformation, at UC Santa Cruz, found that 63% of drivers wanted public officials to enforce laws “so app-based workers who are misclassified as contractors could have access to unemployment, paid leave and other benefits under city and state laws.”)
This debate should strike especially close to the bone for many readers because “gig” jobs with companies like Uber are increasingly part of how many among us prepare for retirement.
Many drivers are over 50. Maybe most. One unscientific survey found that half were over 40. Another, also unscientific, says about 70% are over 50.
Some of these older drivers, like Dave Zarrow in Reston, Va., are already retired. They drive part time to get out of the house and supplement their meager retirement incomes.
Some in their 50s and 60s are waiting to retire. They may have lost their jobs, and found it difficult to get a new one. (American employers, despite the law and despite what they say, are reluctant to hire dinosaurs over 40. But they are too young to retire, and can’t yet afford it.)
Still others, especially over 40, are moonlighting at these jobs to put much-needed cash into their IRA and 401(k) accounts. In case anyone hadn’t noticed, we have a looming retirement crisis.
For these people, part-time, casual “gig” jobs may be perfect. You’re your own boss. You don’t need to “retrain” or “onboard” or persuade a millennial interviewer that you’re not senile. You can work when you want and knock off when you want. If you want to take the afternoon off to watch the game or go golfing, you don’t need anyone’s permission.
“If I want to take a day off Uber, I just turn my phone off,” as one older driver put it.
You can see why this would appeal to those in the second half of life.
Up until now, these drivers have been considered “independent contractors.” They had complete control and flexibility over their work hours. There again, they had no protections. No sick pay, paid family medical leave or unemployment insurance. They bore most of the costs associated with driving a vehicle.
California, in a controversial law called AB5, recently sought to change that, and make these drivers within the state “employees” with the requisition benefits and protections. Proposition 22, on the ballot next month, is the companies’ bid to get an exemption and carry on treating drivers as contractors.
There are perfectly reasonable arguments on both sides. On the one hand, no one is forcing people to drive for these companies if they don’t like the terms. We do not expect, say, eBay EBAY, -1.12% to provide health benefits, or sick pay, or unemployment insurance to people who sell stuff on its site – not even if they are “power vendors” who use it as their main source of income. And the extra costs from providing these benefits won’t be paid by these companies, for the simple reason the companies have no money. Uber has lost $7 billion in the past year and Lyft $1.7 billion. If they must find extra money to pay their drivers, they will either have fewer drivers, or they will pass the costs on to the customer.
On the other hand, if I were a middle-aged person driving for Uber full time I would desperately want unemployment insurance, sick pay, health insurance, and the full nine yards. Few of us want to go back to the Dickensian days of the robber barons, where workers had no protections, and often faced the stark choice of earning a nickel or earning nothing. The laborer, somebody said somewhere
Complicating matters is that no one knows what these alternative futures would look like. If drivers become employees will they lose flexibility and independence? Some say yes, some say no. Will the companies limit their hours, to avoid having to pay overtime, or to avoid providing unemployment insurance? People, again, weigh in on either side.
But nobody knows for sure. We don’t even know for sure how much these drivers are making, given that one study reckons it’s as high as $23 an hour and another warns it could be as low as $5.60 an hour.
The figures being quoted often don’t count the actual costs.
The independent Legislative Analysts’ Office, which works for the Californian state legislature in Sacramento, estimates drivers earn between $11 and $16 an hour.
It estimates that if drivers were made “employees,” the extra costs would probably make up for about 20% of employee costs. And it says that if drivers remain independent contractors, “people would take more rides and place more orders, [and] drivers as a group would earn more income.”
Harry Campbell, who launched TheRideshareguy blog six years ago, says he leans towards voting “no” on Proposition 22. But “it’s pretty clear from our survey and my conversations with thousands of drivers that despite all of Uber’s faults, they are in favor of Prop. 22 and remaining independent contractors,” he told the Sacramento Bee.
Meanwhile, these companies are already exploring how to replace drivers with driverless cars altogether.
If voters next month mess up the jobs market for rideshare drivers – one way or another – most of the voters will still be OK. Editorialists on the other side of the country certainly won’t be affected. It’s the drivers who will go without unemployment insurance or paid sick days, or end up bagging groceries for a living, if they’re lucky. It’s their necks on the line. So shouldn’t Californians be making more of an effort to ask them what they actually want?
