Most sig­nif­i­cant­ly, the bills do not estab­lish pro­tec­tions for those work­ing in the shar­ing econ­o­my, includ­ing those dri­ving for Uber and Lyft. The state con­tin­ues to clas­si­fy these work­ers as ​“inde­pen­dent con­trac­tors,” thus deny­ing them work­ers’ com­pen­sa­tion ben­e­fits and oth­er labor rights. In exclud­ing this ever-grow­ing class of work­ers from basic pro­tec­tions, the state is allow­ing a new sec­tor of the econ­o­my to be built on lais­sez faire labor regimes com­pa­ra­ble to those that exist­ed before the pas­sage of work­ers’ com­pen­sa­tion leg­is­la­tion in the ear­ly twen­ti­eth cen­tu­ry, with poten­tial­ly dire con­se­quences for those whose labor makes the ​“shar­ing econ­o­my” run.

This sum­mer, the Cal­i­for­nia leg­is­la­ture passed two bills designed to pro­tect work­ers and con­sumers caught up in the grow­ing temp and ​“shar­ing” economies. While improve­ments upon the sta­tus quo, these leg­isla­tive reforms, recent­ly signed into law by Gov­er­nor Brown, exclude some of the most vul­ner­a­ble work­ers from the pro­tec­tions they provide.

The first bill, AB 1897, seeks to hold com­pa­nies liable for temp work­ers’ injuries. A 2013 ProP­ub­li­ca report not­ed that tem­po­rary employ­ees in Cal­i­for­nia suf­fered a 50% high­er rate of injuries than per­ma­nent employ­ees, in part because the com­pa­nies that prof­it­ed from their labor gen­er­al­ly did not have to pay for their injuries in the form of high­er work­ers’ com­pen­sa­tion pre­mi­ums. Firms could employ temp agen­cies or sub­con­trac­tors in order to avoid liability.

AB 1897 clos­es this loop­hole and thus helps pro­tect hun­dreds of thou­sands of temp employ­ees in Cal­i­for­nia, includ­ing work­ers employed in man­u­fac­tur­ing and sim­i­lar­ly dan­ger­ous indus­tries. The bill doesn’t, how­ev­er, pro­tect work­ers clas­si­fied as ​“pri­vate con­trac­tors,” includ­ing Uber dri­vers, Home­joy house­clean­ers, and oth­ers whose labor gen­er­ates prof­its for those who run the bur­geon­ing ​“shar­ing econ­o­my.” Those clas­si­fied as pri­vate con­trac­tors are imag­ined to be work­ing for them­selves; they are seen as entre­pre­neurs who choose to take on risk, rather than employ­ees who are enti­tled to basic work­place protections.

The sec­ond bill, AB 2293, seeks to close gaps in lia­bil­i­ty insur­ance at Uber, Lyft, and oth­er so-called ​“Trans­porta­tion Net­work Com­pa­nies.” This past win­ter, on New Year’s Eve, an Uber dri­ver in San Fran­cis­co struck and killed a young pedes­tri­an, Sofia Liu, and injured her fam­i­ly mem­bers. At the time, Uber only car­ried back­up insur­ance cov­er­ing peri­ods when pas­sen­gers were being transported.

The com­pa­ny ini­tial­ly attempt­ed to deny any legal respon­si­bil­i­ty for Sofia Liu’s death on the grounds that the dri­ver was not car­ry­ing any pas­sen­gers at the time of the acci­dent, and was there­fore not con­tract­ing with Uber. AB 2293 requires that Uber dri­vers have a cer­tain min­i­mum lev­el of com­mer­cial insur­ance for all peri­ods when they are at work, and that Uber hold back­up insur­ance for the entire peri­od when its dri­vers are logged into its net­work. While the bill allows for the pos­si­bil­i­ty that com­pa­nies, rather than dri­vers, will pay for pri­ma­ry lia­bil­i­ty insur­ance, the word­ing of the bill makes this high­ly unlike­ly: com­pa­nies will prob­a­bly push this cost onto their drivers.

By man­dat­ing insur­ance for the entire peri­od when dri­vers are logged into the Uber net­work, AB 2293 chal­lenges Uber’s attempt to draw a clear dis­tinc­tion, with respect to third par­ty lia­bil­i­ty, between peri­ods when dri­vers are direct­ly gen­er­at­ing prof­it for the com­pa­ny and peri­ods when they are not.

Unfor­tu­nate­ly, Uber’s inten­sive lob­by­ing over the sum­mer reduced AB 2293 to a shad­ow of its orig­i­nal self. As not­ed by the Con­sumer Fed­er­a­tion of Cal­i­for­nia, in its final form the bill estab­lish­es insur­ance min­i­mums far below those required of taxi, limo, and oth­er com­pa­nies that pro­vide sim­i­lar ser­vices. But the bill was flawed even at its incep­tion, as it nev­er sought to pro­tect workers.

AB 2293 makes dri­vers legal­ly respon­si­ble for car­ry­ing lia­bil­i­ty insur­ance for pas­sen­gers, pedes­tri­ans, and oth­er motorists, while with­hold­ing from dri­vers and their fam­i­ly mem­bers guar­an­tees of com­pen­sa­tion or sup­port in the event that they are injured or killed on the job. Dri­vers can­not even pro­tect them­selves by pur­chas­ing com­pre­hen­sive car insur­ance, since this insur­ance does not apply when they are using the vehi­cle for com­mer­cial purposes.

Thus a bill pur­port­ing to close ​“insur­ance gaps” at Uber et al. does not address the most basic cov­er­age gap for work­ers. Uber dri­vers, like oth­ers work­ing in the shar­ing econ­o­my, will con­tin­ue to be denied the social insur­ance pro­vid­ed by work­ers’ com­pen­sa­tion policies.

Work­ers’ com­pen­sa­tion poli­cies gen­er­al­ly pro­vide reim­burse­ment for lost wages, cov­er­age of med­ical costs, and, in the case of work­ers fatal­ly injured on the job, pay­ments to work­ers’ heirs. In con­trast to insur­ance cov­er­age, work­ers’ comp ben­e­fits are paid regard­less of who is at fault for the injury.

This ensures that man­agers of com­pa­nies can­not avoid lia­bil­i­ty for unsafe con­di­tions of work — i.e. degrad­ed machin­ery; rapid, repet­i­tive­ly per­formed tasks; or long peri­ods of unin­ter­rupt­ed labor. Work­ers are cov­ered even when their exhaus­tion or stress results in a care­less mis­take that caus­es an inju­ri­ous acci­dent. Work­ers’ com­pen­sa­tion poli­cies thus can pro­vide work­ers with some mod­icum of sta­bil­i­ty, while giv­ing man­agers the finan­cial incen­tive to rem­e­dy unsafe con­di­tions of labor.

When man­agers lack an incen­tive to address work­place safe­ty, the like­li­hood of on-the-job injury sky­rock­ets, as we can see in the ProP­ub­li­ca report on temp work­ers’ injuries. To appre­ci­ate why injury rates would sky­rock­et under these con­di­tions, we can also con­sid­er the con­di­tions of labor that pre­vailed in the late nine­teenth cen­tu­ry. This was a time before the estab­lish­ment of work­ers’ com­pen­sa­tion ben­e­fits and oth­er health and safe­ty pro­tec­tions, when employ­ees were held indi­vid­u­al­ly respon­si­ble for pre­vent­ing and man­ag­ing the effects of injuries on the job (as are those now employed in the ​“shar­ing economy”).

In Britain and the Unit­ed States — fol­low­ing pop­u­lar attempts to impose upon com­pa­nies some respon­si­bil­i­ty to pay for work­place injuries — mid-nine­teenth cen­tu­ry legal deci­sions estab­lished con­sumers’ rights to com­pen­sa­tion for acci­dent-induced injuries, while deny­ing such rights to work­ers and their heirs. When work­ers were fatal­ly injured on the job, those depen­dent upon their wages for sur­vival lacked any legal recourse or means of eco­nom­ic sup­port. Work­ers and their spous­es were left to fend for themselves.

As dev­as­tat­ing and fre­quent as indus­tri­al injuries were at the time, man­agers gen­er­al­ly did not have to fac­tor work­ers’ injuries into their account books. For this rea­son, when their prof­its dipped, as dur­ing the depres­sion of the ear­ly 1870s, man­agers chose to accel­er­ate pro­duc­tion process­es and extend work­ers’ hours in ways that they knew would result in more fre­quent acci­dents and injuries. In response to such cal­lous ​“speedups,” work­ers and wid­ows in the rail­way indus­try began in the 1870s to build unions and to press for the estab­lish­ment of work­ers’ com­pen­sa­tion ben­e­fits — efforts that, a few decades lat­er, would bear fruit.

Today, those who fund and man­age Uber, Home­joy, Lyft, Taskrab­bit, and oth­er start-up com­pa­nies are attempt­ing to con­struct a new mod­el of work and eco­nom­ic exchange, which they refer to as the ​“shar­ing econ­o­my.” Those who prof­it from this econ­o­my clas­si­fy those who work in it as ​“inde­pen­dent con­trac­tors,” in part in order to avoid respon­si­bil­i­ty for pro­vid­ing work­ers’ com­pen­sa­tion and oth­er benefits.

The shar­ing economy’s boost­ers thus seek to reverse the gains in work­er safe­ty real­ized over a cen­tu­ry ago by those who suf­fered the effects of inju­ri­ous work­ing con­di­tions and inad­e­quate state sup­port. And, as we’ve wit­nessed this sum­mer, state leg­is­la­tors and reg­u­la­to­ry agen­cies appear will­ing to go along with the shar­ing economy’s ​“inno­v­a­tive” degra­da­tion of work­place safety.

The effects of this degra­da­tion are begin­ning to become appar­ent. Uber, fac­ing com­pet­i­tive pres­sures, has begun shift­ing dri­vers’ terms of employ­ment in ways that encour­age them to dart more quick­ly from job to job, and to work for twelve, fif­teen, or even sev­en­teen hours at a time. Under these con­di­tions, acci­dents become much more like­ly — just as they did for over­worked 19th cen­tu­ry indus­tri­al work­ers with few legal protections.

But since dri­vers are pri­mar­i­ly respon­si­ble for cov­er­ing lia­bil­i­ty insur­ance for pas­sen­gers and pedes­tri­ans, and since Uber will con­tin­ue to bear no cost in the event that dri­vers suf­fer injuries while work­ing, the increas­ing­ly unsafe con­di­tions imposed on dri­vers are unlike­ly to dis­rupt Uber’s prof­its or over­all busi­ness mod­el. That is, unless these unsafe con­di­tions pro­voke anoth­er wave of labor orga­niz­ing and pub­lic outrage.