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Nov 26, 2020

The future of work … as determined by Uber?

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The idea of a "third way," an option that falls between contractor and employee, comes from Canada.

As the pandemic recession drags on, people are turning to gig work to fill the gaps, and the nature of that work is evolving. Proposition 22 in California, which passed this month, lets companies classify delivery and ride-hail drivers as independent contractors. There are some new requirements, such as a wage floor and some health benefit options.

Some describe it as a “third way,” between benefit-free part-time work and traditional full-time employment. If the idea catches on more broadly, what could it mean for how we work? I spoke with David Weil, dean at the Heller School for Social Policy and Management at Brandeis University. He told me about the origin of the idea. The following is an edited transcript of our conversation.

David Weil: Well, the third way comes, in fact, from Canada, where there is a concept of what’s called a dependent contractor, where you have a set of protections that are designed for independent contractors that really rely on a single or a small number of major employers who are contracting their business to protect independent contractors who really had this level of dependency. But I think the problem of the third way is the fact that Canada starts in a very different place than workers in this country start.

Molly Wood: New York City and Seattle have their own laws providing protections for workers. With Prop. 22, these companies have said that they’ll start to provide some basic protections that don’t go as far as full employer-sponsored health insurance. Are we creeping toward a new mindset around how we deal with labor in the U.S.?

Companies dictating public policy

Weil: I think we are, and I think creeping is the right word. I think what we have done is, unfortunately, we’ve allowed some very powerful platform companies to dictate the terms of our public policies. I mean, remember that in many markets, Uber and Lyft, basically, their business model was to come in in advance of regulations and just set the terms on their own before there had been any measured public policy discussion about who are these workers, and is this an appropriate way to classify them. And what concerns me about the efforts of those platform companies [is], in lots of different places, before we even got to Prop. 22, was they were trying to, in many ways, dictate the terms about who is protected under different laws and who isn’t. And that to me is an appropriate thing for public policies and people we elect to think about, not for people in any industry or powerful company to determine for us. I think Prop. 22, and a lot of other things that have happened at the state level, have pushed us, unfortunately, towards defining that based on the interests of a small number of businesses rather than on what we as the public think are appropriate protections.

Wood: Do you think, as you look down the road, that we may end up moving to a different kind of system? A lot of people believe that benefits, like health care and retirement savings, are too tied to our employers in the U.S. Obviously, maybe one reason that the third way works in Canada is that health care doesn’t come from companies. How much will we have to change to get to a true, new labor paradigm?

Health care

Weil: I mean, certainly the health care issue, as you raise it, is certainly fundamental. And I think there’s some fundamental things that I think we really need to debate, like access to a health and safety work environment, being assured that you’re not going to be retaliated against for the use of rights, being sure that you’re not going to be harassed. Even the basic notion that you should be paid for work you do, regardless of your status, I think are pretty fundamental things that we should debate and say we should provide these for work, not employment status.

Wood: What are some other options for how we could get benefits to workers?

Weil: The other argument, or the other policy issue, that I think people get mixed up on is the portability of benefits. What we want to do is figure out mechanisms that make benefits — retirement savings, or saving for your own personal training and development, or paid leave — let’s make that portable. Let’s use mechanisms that we’ve known about for a long time [on] how to make things like that portable, whether again, you’re an independent contractor or an employee. Evolve those kinds of mechanisms separate from the question about what rights do we want to make sure working people have regardless of where they work.

A rideshare driver holds up a sign urging Californians to vote "no" on Prop 22 in Oakland, California, on Oct. 9, 2020.
A driver holds up a sign urging Californians to vote no on Proposition 22, which passed on Nov. 3 and classifies app-based workers as independent contractors. (Josh Edelson/AFP via Getty Images)

Related links: More insight from Molly Wood

A reminder that Uber, Lyft, DoorDash, Instacart and others spent over $180 million on the Proposition 22 campaign and their version of the third way.

Proposition 22 in California already has techie types in other states eyeballing similar measures. There’s an op-ed in the New York Daily News arguing that New York should also pursue a version of the measure. It notes that in a survey conducted by The Rideshare Guy, an Uber and Lyft driver who also blogs about the industry, about 69% of California-based drivers surveyed want to remain independent contractors, and 79% of all the drivers who responded want to as well. Maybe people really do want a third way.

In other things tangentially related to cars, tech and big money campaigns, we’ve talked a lot on our show about the right to repair movement, and it scored a big victory in Massachusetts this month when AutoZone and Advance Auto Parts spent a bunch of money to pass a measure that lets any repair shop get into a car’s diagnostic system, something that’s usually proprietary to dealerships and costs consumers a ton of money.

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Molly Wood Host
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