SACRAMENTO, Calif. — Ride-hailing companies Uber UBER, -0.66% and Lyft LYFT, +0.59% say they are willing to change the way they treat drivers in California — as long as state lawmakers don’t require them to call drivers employees, a move that would entitle them to a wide range of benefits.
The California-based tech firms are in the crosshairs of legislation at the state Capitol that would strictly limit how businesses can label workers as contractors. While some other industries have negotiated exceptions under the proposed law, it remains unclear if leading Democratic lawmakers will be open to a deal with the companies amid mounting scrutiny of labor practices in the burgeoning gig economy.
In an unusual joint op-ed published in the San Francisco Chronicle on Wednesday, the leaders of the rival firms said that to change the way workers are classified as independent contractors would upend their businesses.
Instead, the companies suggested changes to the way it treats drivers in California if it can continue to classify workers as independent contractors. That would include giving them a base wage and providing certain benefits.
The unspecified base pay would be calculated from the time a driver accepts a ride request until the passenger is dropped off. The companies suggested letting workers pick from a range of benefits, too, such as education reimbursement.
The op-ed also suggested creating a new drivers’ organization that would advocate for workers and administer benefits.
The details behind all these ideas have yet to be finalized but would only apply to drivers in California, at least at first.
Uber CEO Dara Khosrowshahi, Lyft CEO Logan Green and Lyft President John Zimmer all signed on to the op-ed.
The legislative clash shaping up this year over the rights of independent contractors follows a state Supreme Court decision last year that cast a question mark over the way businesses classify many employees.
Backers of the proposed legislation argue that it is key to protect access to fundamental benefits, such as workers compensation and unemployment insurance.
Assemblywoman Lorena Gonzalez, a Democrat from San Diego and the author of the bill, pointed to these rights as central to what she described as the social compact of work.
“’Century Old’ labor laws brought us the minimum wage, overtime, workers compensation, the right to organize, social security and Medicare, unemployment insurance and more,” she wrote on Twitter on Wednesday. “We’re not willing to let big tech upend the social compact of work in the name of ‘innovation.’ “
Gonzalez’s office did not comment further.
Proponents of Gonzalez’s legislation, Assembly Bill 5, argue it would at least provide certainty to businesses in the wake of that case, which may have an impact on industries from trucking to newspapers.
The state Assembly has passed the bill, and it’s awaiting a hearing in the Senate.
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