California bill would let gig workers organize, negotiate

A registered Uber car waits in the TNC lot at San Francisco International Airport in San Francisco, California, on Wednesday, March 9, 2016. A registered Uber car waits in the TNC lot at San Francisco International Airport in San Francisco, California, on Wednesday, March 9, 2016. Photo: Connor Radnovich Connor Radnovich, The Chronicle Buy photo Photo: Connor Radnovich Connor Radnovich, The Chronicle Image 1 of / 4 Caption Close California bill would let gig workers organize, negotiate 1 / 4 Back to Gallery

Gig workers such as Uber and Lyft drivers, as well as many other contractors, would gain the right to collectively bargain over wages and working conditions under legislation being considered in California.

“As our economy innovates, so should our labor laws,” said Assemblywoman Lorena Gonzalez, D-San Diego, a former labor leader who proposed AB1727, the California 1099 Self-Organizing Act. “More and more employers are doing business by classifying workers as independent contractors. Under current law, independent contractors can’t get together and negotiate with the master employer.” The U.S. views contractors as businesses, which means they would violate antitrust law if they pursued collective action to raise rates, for example.

The bill is likely to face stiff opposition from the scores of new Internet platforms that have sprung up to connect workers with people who need rides, deliveries, housecleaning, home repairs, massages, valet parking and other services. These on-demand services typically take a cut of the fee for each job, and consider the workers to be self-employed.

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“For millions of Americans, the sharing economy is an important safety net that offers flexible earning opportunities,” said Michael Beckerman, CEO of the Internet Association, an industry trade group, in a statement. “Individuals are now able, like never before, to work for themselves and earn money how, when and where they want. Independent contractors are prevalent in every industry, but this proposal unfairly targets the Internet sector in a way that could hurt the very people it purports to help.”

Uber, by far the biggest on-demand platform with a $62.5 billion valuation, referred requests for comment to the Internet Association.

“We share Assemblywoman Gonzalez’s dedication to workers and agree with the starting point that people engaging with platforms are independent contractors,” Lyft spokeswoman Chelsea Wilson said in a statement.

On Wednesday Gonzalez broadened the bill’s scope beyond the on-demand workers for platforms like Uber, TaskRabbit and Postmates to include contractors in a range of sectors, not just those dispatched by smartphone apps. Truck drivers at the state’s ports are another potential target group, for instance, she said. The criteria is that the hosting platform must make money off the workers’ labor, so listing services such as Craigslist and Thumbtack would not be covered.

Gonzalez’s bill, which has Sen. Ben Allen, D-Santa Monica, as a co-sponsor, would allow as few as 10 workers to join forces to negotiate with a company.

“That’s a pretty small bargaining unit,” said Donald Polden, a law professor at Santa Clara University, who said the bill raises many questions about its validity.

Gig workers, the most visible segment of the nation’s rapidly growing freelance workforce, have sparked a nationwide debate about their treatment. Workers from several on-demand platforms have sued to be classified as employees. Lawmakers have proposed creating flexible benefits to provide more of a safety net for freelancers. Critics say that contractors lack the benefits and protections of employment, such as workers’ compensation, a minimum wage, overtime and expense reimbursement.

Enrico Moretti, a UC Berkeley economics professor who studies emerging labor markets, said he thinks the California bill is misguided because it would hurt an industry that has fueled new earning opportunities. “Making it less flexible would have considerable costs for the industry and would reduce market entry, innovation and employment growth among incumbent players,” he said.

Moreover, Moretti said, “If the working conditions were so dismal, it would be a problem for Uber and Lyft to find drivers, but that doesn’t seem to be the case. There are plenty of people interested in these types of jobs.” As of September, Uber said it had 327,000 U.S. drivers, double the number from a year earlier.

But a San Francisco Uber driver said that many have been leaving Uber because it has continued to cut its rates. Jason, who declined to give his last name for fear it would hurt his job prospects, said that two years ago he earned about $1,000 for a 35-hour week and now struggles to make $650 putting in the same time.

“If they allow collective bargaining, the drivers will end up saving the company from itself” by pushing back against the price cuts, he said. “They are having a hard time recruiting now.”

Seattle last year passed an ordinance that would allow Uber and Lyft drivers to unionize. That law is now facing legal challenges from the U.S. Chamber of Commerce. Seattle Mayor Ed Murray, who said he will neither sign nor veto the bill, expressed concerned about its administrative costs.

Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid