Drivers are at the heart of the ride-share business. They’re also at the heart of the debate over a bill approved by California’s legislature, AB5, which aims to solidify gig workers’ legal status as employees. Uber and Lyft have always classified drivers as independent contractors. But many lawsuits over the years, by drivers and others, have put that classification under question. AB5 is intended to help drivers by creating a set of criteria under which Uber or Lyft drivers could be considered employees of those companies, and therefore entitled to the benefits and protections of employees.
So why would some drivers be against it?
I spent nearly a year driving part-time for Uber and Lyft, and then left my job as an engineer to cover the industry full-time through my blog The Rideshare Guy. After thousands of conversations with drivers, I’ve found that while they come from all walks of life, one of the main reasons they value this work is flexibility. As a driver, you can work almost as much or as little as you want, cash out your pay instantly, take a break at a moment’s notice, or even go on a six-month vacation. This flexibility and that feeling of not having a boss makes ride-hail driving stand out in the vast array of service jobs and low-wage work.
Despite what Uber and Lyft are telling drivers, there is nothing in the text of AB5 that would take that flexibility away. And yet, many drivers are worried that they will lose it.
I think it’s because they are scared. There are plenty of negatives to driving for Uber and Lyft, but for a lot of drivers, the thought of becoming an employee is even worse.
Proponents of AB5 have argued that nothing has to change if drivers all become employees, but I’m not so sure. New York City, for example, recently passed a minimum pay rate for ride-hail drivers. While the initial numbers from the Taxi and Limousine Commission show that drivers are indeed making more, it has come at the cost of some flexibility. Lyft no longer allows drivers in the city to log on in less busy areas, because they don’t want to pay the minimum wage for drivers who aren’t as likely to get rides.
Uber and Lyft are currently digging in for a long legal battle, and it’s clear that they will do everything in their power to prevent having to pay drivers like employees. But I see a simpler solution: Uber and Lyft should treat drivers like actual independent contractors.
Over the years, Uber and Lyft have taken away a lot of the flexibility that made driving for them so great. They now use software and algorithms that share information selectively with drivers, giving drivers incentives to work when and where the companies want them to. This allows the companies to have more control over drivers and maximize their own revenue, not the drivers’ pay.
These days, the number one complaint I hear from drivers is that the pay — which is calculated according to complex pay structures and bonus programs — is too low. And every few months, there seems to be another rate cut. When this happens, drivers feel helpless. They are faced with the reality of driving more to make the same amount of money or quitting. But if drivers were truly independent contractors, they would have the ability to set their own rates. Uber and Lyft could set suggested rates, but drivers would be able to charge higher, or even lower, rates and thus be in control of their pay.
By exerting various elements of control over their drives, Uber and Lyft are the ones treating drivers like employees, more so than any law could ever do.
Things would be a lot better for some drivers if they were considered employees. While the majority of drivers work only part-time, there are drivers on the roads today who put in 40, 50 or 60 hours a week and even sleep in their cars. For full-time drivers, it is really tough. They don’t get to take advantage of the flexibility that ride-hail driving affords, and they’re essentially working an employee-like schedule, but without any of the protections. That means no minimum wage, no unemployment insurance, no benefits and no workers’ compensation. I can’t fault these drivers for pushing to improve their lives.
But the drivers who actually want to remain independent contractors are rightly worried that the flexibility they love will disappear. Turning them into employees, as AB5 intends, turns driving into just another job.