Uber and Lyft leaders joined together on Wednesday to try to fend off a legislative threat to their businesses. In an opinion piece in the San Francisco Chronicle, Uber CEO Dara Khosrowshahi and Lyft founders Logan Green and John Zimmer argued a California house bill that might reclassify people who drive for the companies from independent contractors to employees would undermine the flexibility that attracts many to the work while potentially damaging the ride-hailing businesses.
Instead, they suggest a system of “worker defined benefits” for drivers for such things as paid time off, retirement planning and lifelong learning. They also pledged to “establish a commitment” to better pay and earnings transparency, and said they would form a new driver association in partnership with lawmakers and labor groups. There are few details, and it’s not clear why Uber and Lyft need government support or coercion to take the kinds of steps they’re promising in the op-ed.
Uber and Lyft have benefited from the status quo—in which their drivers are considered independent contractors—because they have leeway in how they pay drivers and don’t need to offer them benefits. The CEOs write, correctly, that many drivers value the flexible work hours that driving for ride hailing companies provides. And, it’s true that some drivers use the income from driving for Uber and Lyft to supplement what they make at other jobs.
The companies have fought unsuccessfully against other legislation aimed at their businesses. They’ve usually survived, but separately have paid to settle an array of lawsuits on the matter. Both have modeled what their businesses would look like if all their drivers became employees with Uber, at least, confident it would eventually be profitable, though smaller.
So while the headline on the piece—probably not written by the top three American ride-hailing executives—is, “Uber, Lyft ready to do our part for drivers,” it seems fair to ask why it’s taken another credible threat of legislation to get them to propose serious action.