Uber’s Latest Concession To Drivers Could Spell Trouble For Gig Workers

Labor leaders say Uber’s push to bring benefits to Washington state drivers could doom broader efforts to organize drivers.

For years, Uber has battled driver complaints of unfair treatment. But this week, the $48 billion startup announced its interest in exploring state legislation that could provide certain benefits to gig workers, many of whom — along with lawyers and labor activists — have fought for years to be recognized as employees.

On the surface, the surprising news implies that Uber’s sense of responsibility to its massive independent contractor workforce has shifted. But critics say it’s little more than a PR scheme designed to distract from Uber’s years-long battle with the Teamsters union in Seattle.

“The world of work is changing,” reads the letter, which was published Tuesday and cosigned by CEO Dara Khosrowshahi. “At a basic level, everyone should have the ability to protect themselves and their loved ones when they’re injured at work, get sick, or when it’s time to retire.”

Setting aside the fact that Uber is one of, if not the, most potent technological forces driving these changes in the so-called world of work, the company’s interest in extending further support to gig workers is big — and surprising — news. But the announcement also has the potential to deal a fatal blow to one of the country’s only promising attempts to give Uber drivers real collective bargaining power via a union.

This story has gotten VERY little play today, but is a big deal. SEIU's affiliate, @seiu775 in Seattle, has cemente… https://t.co/eptstk53gH

The letter in question, while vague, loosely outlines how both Uber and other gig economy companies could potentially help gig workers pay for benefits like unemployment insurance or workers’ compensation by jointly paying into a fund that the worker, the other platforms they work on, and the government also contribute to. It doesn’t offer any specific details about how such a deal would actually work, and Uber told BuzzFeed News it’s more of a starting point than a real policy proposal.

The controversy, however, isn’t over what is or isn’t in the letter, but who signed it.

The Service Employees International Union’s David Rolf, along with venture capitalist and civic activist Nick Hanauer, have been trying to advance portable benefits as a pragmatic solution to the gig economy problem for years. Rolf is the president of an SEIU local in Washington state, which represents home care workers, not drivers. He and Hanauer have been working on portable benefits legislation in Washington state since last year, which West Coast representatives for Uber say is when the company first became interested in working with them on the policy.

But labor activists say Rolf’s willingness to work with Uber has created an opportunity for the company to legally enshrine the drivers’ status as independent contractors, not employees, and makes Uber look willing to work with labor, despite its strident campaign against the Teamsters in Seattle.

“This isn't just a matter of Washington state,” said Hector Figueroa, an executive with an SEIU local in New York. Years of observing Uber’s tactics on the ground have left him wary of cutting any deal with the company. “Washington is opening the door for something we believe is harmful for workers. So we’re going to oppose it, even though a sister union is actively involved.”

Traditional labor organizers like Figueroa want Uber drivers to be classified as employees, not as independent contractors. This would give drivers the protection of minimum wage laws while also guaranteeing them certain benefits, like paid sick leave. The organizers’ concern is that, if labor collaborates with Uber on portable benefits policy, the legislation will cement drivers’ status as contractors, which would compromise their rights and bargaining power while making Uber look both innovative and generous.

In Seattle, Uber has actively fought against efforts by the Teamsters to organize drivers. The city of Seattle passed an ordinance in 2015 that allowed workers to organize and collectively bargain against ride hail companies like Lyft and Uber even though they weren’t employees. But the law, the first of its kind and a policy innovation, didn’t get those interested in unionizing drivers very far.

While Uber fought the Teamsters on the ground level, programming an anti-union podcast and offering free pizza to drivers who came to anti-union meetings, the US Chamber of Commerce filed a lawsuit and tried to fight the bill in the courts. Right now, the bill is hung up in the 9th Circuit, and the Teamsters, despite having won their application to represent drivers, is still waiting on a list of driver names and contact info that would allow them to begin their organizing campaign.

The Teamsters in Seattle said they got no warning about the deal between Rolf and Uber at all. Rolf’s office blamed a miscommunication and said the Teamsters' efforts have his full support. “We support the Teamsters efforts in organizing,” he told BuzzFeed News. “We've always worked well together with the Teamster organization, and we expect to on this issue as well.

But some say that whatever Rolf’s motives might be, his decision benefits Uber without securing any real guarantees for the drivers.

“Striking a top-down deal with a corporation does not replace organizing. It's not innovative. It's a cop out,” said Bhairavi Desai, president of the New York Taxi Workers Alliance, which has fought Uber on behalf of workers since it launched. “There's no doubt this is meant to give Uber some kind of political cover.”

The Teamsters said drivers they spoke to were “excited to hear that benefits for workers have started to be part of the conversation at Uber.” But a spokesperson also pointed out that there’s “nothing holding companies back from offering benefits to workers who need them today,” and that the bill does nothing to address other concerns drivers have, like higher pay and more respect.

The spokesperson said the Teamsters’ organizing efforts in Seattle would continue, but declined to say whether the Teamsters intend to sign on to Uber’s portable benefits letter.

A representative for Uber in Seattle said the company continues to oppose unionization efforts in Seattle, saying “the notion that the Teamsters are the appropriate rep is one I would challenge.”

While Uber has cosigned a letter with Rolf expressing interest in exploring the possibility of portable benefits, the company has not actually cosigned the proposed legislation, which, in its current form, asks for employers to contribute 25% per transaction to the fund, or $6 an hour, whichever is higher.

Rolf said he expects, as the bill moves through the legislature, there will be a healthy debate over how much money each party should contribute. “The companies will want to go to low, and the worker advocates will want to have a rate that is equivalent to a W-2 employee,” he said.

Uber’s letter said the plan is to find a compromise that addresses “the need to promote a rising standard of living as well as healthy, profitable businesses.”

For Rolf, getting Uber on board with portable benefits is a coup. Other supporters of the idea, including Virginia Democratic Sen. Mark Warner, who has proposed federal portable benefits legislation, tweeted their approval of the deal.

This is an important start towards remaking our social safety net to address a changing economy. I applaud the… https://t.co/eycpSpBzvS

“A number of other on-demand companies voiced their support for these principals two years ago,” Rolf said. “Uber was under different leadership then. They obviously had some reputational issues. It seems to me there's maybe a different philosophy at the top of the organization now about working with others.”


The US Chamber of Commerce sued the city of Seattle over collective bargaining legislation. An earlier version of this post misstated the name of the plaintiff.

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