Robert Ovetz explores Prop 22 in California and recent attempts to strike deals between gig companies and unions in New York and Seattle, arguing that strategies which prioritise lobbying & advocacy over the self-activity and organisation of gig workers are doomed to fail over the long-term.
This piece is part one in a three part series by Ovetz for the Gig Economy Project on the strategy & tactics of gig worker struggle. Part 2 will make the case for gig workers prioritising self-organised struggle, while Part 3 will argue that the lack of rules governing platform capitalism could actually be an advantage for organised gig workers. A version of this series will be published as a chapter in an upcoming Routledge Handbook of the gig economy, for which Ovetz is an assistant editor.
Robert Ovetz is a lecturer at San Jose State University in California, USA, and is author of ‘When Workers Shot Back: Class conflict from 1877 to 1921’ (2018) and editor of ‘Workers’ Inquiry and Global Class Struggle: Strategies, Tactics and Objectives’ (2020). He is the book review editor of the Journal of Labor and Society. Follow him on Twitter @OvetzRobert.The Gig Economy Project recently spoke to Ovetz in a podcast to discuss the ‘Workers’ Inquiry’ book.
This series of articles concerning the Gig Economy in the EU was made possible thanks to the generous support of the Foundation Menschenwürde und Arbeitswelt
The passage of Proposition 22 in California on November 3, 2020 was a parting of the waters for gig worker organising not only in California but around the United States. Prop 22 quickly revoked the classification of gig workers as employees of the tech companies under California’s 2019 AB5 law that extended the protections and benefits of labour law. While the passage and repeal of AB5 has animated efforts to organise gig workers it has unfortunately offered a false choice; the question of whether on-line gig workers should be employees or “independent contractors.” The pivot to reform, as a short cut to some of the benefits of union organising, promises to impose legal accountability on the tech companies, without necessarily ensuring income stability and security, while allowing them to continue to impose unquestioned control over gig work itself. The catastrophic passage of Prop 22 has opened up the need for a strategic discussion about whether “ride-share” and food delivery gig workers will continue the pivot toward further efforts at reform, negotiate labour-management peace agreements, or continue organising for control over work. The answer to the focus on which strategy promises the most effective path is inseparable from the gig companies use of apps for algorithmic management that allows them to control, atomise, and divide the workers using digital tracking. Focusing on organising to demand employer accountability while leaving the question of control unaddressed risks further defeats for gig worker organising.
Prop 22
The passage of Prop 22 with 58 per cent voting yes on the ballot initiative written by Uber, Lyft, and other big tech companies was not merely a defeat at the ballot box, it was a defeat for shifting from gig worker self-organising that led to a global strike wave in 2019 to union led advocacy and legislative reform as a shortcut to achieve the benefits of union organising without the long-term commitment and work of organising.
Prop 22 followed the passage of Assembly Bill 5 (AB5) by the California legislature in 2019. The bill had stalled until Ride-share Drivers United (RDU), a self-organized independent union of ride-share gig workers, marched on the state capitol in Sacramento demanding the passage of the then stalled bill. Ride-Share Drivers United (RDU) followed the march with a strike of thousands of gig workers in California that spread to several other states and countries in Europe and Africa. The strike made its impact felt and the legislature soon passed the bill and it was signed into law on September 18th by Governor Gavin Newsom only two weeks after he publicly announced his support for the bill.
The ruling was so damaging to the companies’ profitability that the CEO of Uber threatened a capital strike in California and the Yes on 22 campaign later threatened hundreds of thousands of layoffs and “a permanent shutdown of services” if it didn’t pass. It is estimated that reclassifying their workers as employers would cost Uber $4 billion a year.
AB5 was a direct hit to the very survival of the gig companies, like the publicly traded Uber and Lyft, which are yet to post a profit and face increasing pressure from shareholders and investors. California is still pursuing legal action against Uber and Lyft for $413 million in unpaid contributions to the state unemployment insurance fund between 2014-19. Uber and Lyft reported in their initial public offering (IPO) prospectuses that they owe California, Massachusetts, New York and New Jersey a combined $1.1 billion (about one-half of their total revenues in 2018) for unpaid contributions to federal entitlements, as well as unpaid wages, fines for wages and hour law violations, and other penalties.
Under pressure from the tech companies, the governor then called for negotiation between gig worker groups and the rideshare companies to carve out exceptions that could be added as amendments in the next legislative session. When the companies’ offer to allow for company unions with dues paid for surcharges on customers was rejected by the gig worker groups, the companies proceeded to spend more than $224 million qualifying Prop 22 for the ballot and flooding the state with propaganda to ensure its passage.
Soon after its defeat, Service Employees International Union, which set up Gig Workers Rising (GWR) and ran the AB5 lobbying and No on Prop 22 campaigns without disclosing itself as the employer of campaign staff, filed a lawsuit in the state Supreme Court arguing that the new statute violated the state constitution in several ways. The plaintiffs argued that by prohibiting any amendments of the law by the legislature unless passed by an astoundingly high 7/8 supermajority vote prevents the legislature from carrying out its constitutional authority to make new labour law. The lawsuit also charges that the initiative should be struck down as unconstitutional for dealing with more than one non-germane subject.
As a consequence, when Prop 22 qualified for the ballot and gained in the polls, SEIU and other unions decided to spend about $13 million of the reported $19 million they had planned to use for a No on Prop 22 campaign to focus on a lawsuit in an attempt to have Prop 22 thrown out by the courts, a strategy that is still ongoing. Prop 22 proved to curry favour with investors. The week after it passed Uber and Lyft’s stock market value rose by $20 billion.
Prop 22 is an extraordinary, if hardly unique, example of corporations buying their own law. Overturning AB5, Prop 22 essentially invents a third category of workers beyond employee and independent contractor, stranding the workers outside all labour law.
Despite the setback it is critically important to observe that the impetus for passing AB5 didn’t come from advocacy and lobbying but self-organisation and strikes coordinated by RDU without any union backing or much money. RDU was launched in 2017 and organised drivers with several protests at the Los Angeles airport, the second largest rideshare market in the US, and a strike on March 25, 2019. RDU organised a 25 hour strike on March 25, 2019 against Uber and Lyft for pay-rate cuts. It’s May 8 strike went global, working with a network of gig workers to launch a global day of protest and strikes on May 8, 2019 joined in the US, Nigeria, Kenya, France, Scotland, Brazil and Australia, in a total of 10 cities on 5 continents, the day before Uber’s initial stock market IPO and about a month after Lyft’s IPO. With gig workers in the streets and threatening the companies’ survival, AB5 became a sensible intervention to stabilise the newly emerging sector.
Seattle and New York Union U-Turns
The success of Prop 22 led to threats of similar efforts in Congress and other states, creating fear among some unions that has resulted in back door labour union-management peace agreements that would enshrine the third legal category of work. Despite their unsuccessful effort to achieve a union-management peace agreement in California, the gig companies have had more success in New York and Seattle.
A peace agreement was pursued in Connecticut until the AFL-CIO labour confederation put a stop to it. Another effort in 2021 in New York state involving the International Association of Machinists and Aerospace Workers (IAM)/Uber company union and the Independent Drivers Guild (IDG) to represent drivers, the Transport Workers Union (TWU) to represent delivery workers, and the Retail, Wholesale & Department Store Union (you may be aware of its catastrophic loss in the Bessemer Alabama Amazon warehouse organising campaign) was abandoned after widespread condemnation.
Alongside the disruptive impact of strikes, established unions and non-profits such as the Worker Justice Project in New York have supplemented organising with other tactics. They have resorted to lawsuits, complaints to labour tribunals, courts, and regulators, and lobbying for regulations to improve the working conditions of workers, challenging the de-activation of workers from the app, and even the classification of workers as independent contractors. Some of these campaigns have been instructive in both what is possible under current conditions in which the neoliberal state continues to apply labour laws, previously introduced following previous waves of class struggle in the 1970s and 1930s, to impede, manage and de-escalate workers struggles rather than intervene to tip the balance more in favour of workers.
With backing from the Taxi Driver’s Alliance, gig workers in New York City carried out a disruptive campaign of street rallies, protests, lobbying, and strikes that eventually forced the city to pass several measures to improve gig worker pay in the city. Recent city laws established the right to a written contract when the gig work has a value of $800 or more, a $17.22 minimum wage by adding $5 to the average $11.90 gig worker wage to ensure drivers reached the $15 minimum wage in the city, a cap on the number of drivers, and the reporting of trip details including duration, cost, driver earnings, and company commission. The council also set a limit on the number of new drivers that can operate in the city. If gig workers were employees of a single company, the approximately 80,000 drivers would be the largest single workforce in the city. The company not only threatened to sue but defeated the reforms by restricting driver access to the app to avoid having to pay them for waiting and riding to and from a gig. This leaves drivers paid an average of 25 hours for every 40 hours they are working on the app.
Such deals would deliver a semblance of accountability to the gig companies without organising the workers to have power to enforce them. Among other features, the New York agreement would allow the companies to decide which unions can contact workers and limit contact with workers to using company email only without any identifying information. The state Department of Labour would also determine which union could represent the workers and would be restricted to selecting among unions with experience organising gig workers in the previous five years, which would exclude independent and smaller unions. It would put all gig workers in the sector into a single union if 10 percent of workers sign cards, workers would not be allowed to elect their union or officers, and would be limited to bargaining only over minimum earnings, deactivation appeals, and the contributions to a “portable benefits fund” established by both the employer and union and run by an unaccountable non-profit. The union would be funded by a surcharge on customers rather than dues, would not be subject to democratic control by workers, and would be prohibited from striking, slowdowns, pickets, or taking any job action. Contracts would be signed for five years and workers would continue to be independent contractors exempt from labour law. The threshold to decertify the union would be much higher, requiring 30 percent to request the election and a majority to vote to decertify.
Such labour peace agreements are modelled on an existing deal between Uber and the International Association of Machinists in New York City following the passage of several city laws governing gig work that essentially did the same thing. The “union,” called the Independent Drivers Guild (IDG), would have no power to bargain, would sit on a toothless workers council with management, and have no independent power ordinarily associated with unions. In fact, it’s so weak IDG’s president pleaded with the city to pass these laws because it “has no voice” and is powerless to even enforce the terms of the agreement.
In some places organising has been sacrificed to local reforms and negotiated peace agreements. In Seattle gig drivers were organised by the Teamsters affiliated App-Based Drivers Association union alongside Instacart workers organised in the independent Gig Workers Collective, supported in Washington state by the union backed Working Washington. Instacart worker organisers met drivers in supermarkets and are building an app that allows workers to calculate their pay and provides them opportunities to get involved, a social media campaign and petition that allows workers to expose the company’s theft of tips.
The Seattle City Council has implemented a number of protections and benefits for gig workers, such as allowing drivers to collectively bargain in 2015, in response to organising campaigns by Uber and Instacart, as well as Doordash workers. In August 2018, the Ninth Circuit Court of Appeals upheld the city’s collective bargaining law because independent contractors are not covered by federal labour law. In exchange for dropping the lawsuit, the city council negotiated the so-called “Fare Share Plan” with Uber and the US Chamber of Commerce. The city then passed laws granting premium pay, a mileage payment rate that considers waiting time to ensure drivers are paid the city’s $16.39 per hour minimum wage, temporary “paid sick and and safe time” during the pandemic, and watered down the 2015 law by removing wages from bargaining.
Strategic Dead-end
The efforts in California, New York, and Seattle have come in a flurry of global recomposition of gig worker power. In India, Belgium, Spain, Canada, Brazil, Ecuador, UK, India, Italy, Ecuador, France, Brazil, South Africa, China, and Germany, gig workers have been self-organising and striking by setting up their own unions or with support from autonomous and mainstream militant unions. 34 autonomous unions from 12 countries joined together in 2018 to form the Transnational Federation of Couriers to coordinate their struggles across borders.
In the UK Deliveroo workers carried out workers’ inquiries into algorithmically managed work to devise and share tactics and strategies to find choke points, weaknesses, and vulnerabilities they can exploit to shift the balance of power. In some countries, gig work organising and strikes have resulted in favourable court rulings. This includes the UK, where Uber has been forced to classify drivers as employees, while rulings in Italy (Wray 2021a) and The Netherlands have forced the company to turn over its algorithm, in Ontario Canada and Spain employees have been re-classified, while French gig workers have been granted the right to organise, take collective action, and receive social protections.
Like AB5, the UK and EU court rulings are being held up as strategic models for improving the conditions of gig workers. But are they really improvements? Has the shift from worker organising for power in the workplace to lobbying for a voice in the legislature and civil damages in court, adequately met the needs of gig workers? Answering these questions requires looking at gig worker organising at two levels: how to target gig companies and the risks of reform without worker power.
The narrow focus on whether gig workers are independent contractors or employees illustrates a key problem with the current strategy of advocacy and lobbying. Using union-management peace agreements to improve the conditions of gig workers as independent contractors or forcing employers to correctly classify them as employees, and thus bring them under the protection of labour law, addresses only one side of the problem.
If the gig companies management strategy is to profit from their control of gig workers without being accountable to them, then efforts to use reform to extend accountability is a strategic dead-end. Focusing only on expanding accountability as it pertains to wages, benefits, hours, and safety, while almost entirely abandoning the other side of control over work, will deliver short term gains at the expense of long term defeat. The neoliberal age was ushered in by nearly identical wage-productivity deals in the auto and port sectors in which powerful unions abandoned bargaining over control in exchange for wages that rose along with productivity. Without control, management ushered in new technologies and outsourcing that undermined higher wages for a shrinking workforce.
The same strategy is again being attempted in the gig sector. Even if they become employees or negotiate higher wages the app is left firmly in charge. The strategy of accountability will not change the material conditions of gig workers whose work is still managed by the companies using the algorithm because it excludes workers from having any say over it. This strategy leaves workers without any control over how they are paid, how much, and for what portion of their work time, and their wages will remain obscured and changed unilaterally by the company. Workers will have no say over the intensity of their work, the times they work, and the massive data collected about their work and life through ‘dataveillance’. The reason is that the companies retain absolute control through their algorithm driven app that uses data to automate the assessment, evaluation, and control of their work. Jamie McCallum has aptly called this management strategy “rule by data,” rightly concluding that: “The steady growth of the employee surveillance state means that management has mostly been getting its way.” The singular focus on accountability will ensure it continues to get its way indefinitely.
Although there is no doubt that making gig workers employees would vastly improve their lives by allowing them to legally organise a union and collectively bargain, raise their wages, and be protected by occupational health and safety laws, accountability is hardly a panacea. Along with labour law protections and a contract come obligations and legal limitations on workers’ and their unions’ ability to act with other workers to take collective action, negotiate over prohibited issues, and struggle over issues beyond their own particular work place, employer, and industrial sector. Because labour law and contracts are legally binding on both employers and workers they can be used by the state, employers, and even unions to discipline, dampen, and constrain workers self-activity.
In many US states even where collective bargaining is allowed, workers are prohibited from negotiating over work control issues such as work hours, scheduling, hiring, firing, productivity, what is produced, and discipline. Even when these are allowed in bargaining, unions commonly bargain away control issues for higher wages and benefits which are cancelled out when higher productivity is factored in.
In other words, the focus on only accountability is exactly what’s wrong with the global labour movement and unions. It’s no accident that the string of defeats over the past four decades has corresponded with harnessing self-organised worker struggles to the contract, union discipline, and local labour law. Making gig companies more accountable to gig workers will make the workers lives better in the short term but at the expense of the companies continuing to control them using ubiquitous and invasive forms of algorithmic management to fragment their labour into its component tasks in order to better control, monitor, track, and evaluate their every motion and action both at work and away from work.
Part 2, ‘The case for gig workers prioritising self-organised struggle’, will be published next week.
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