What’s in Store for American Gig Workers? Maybe Europe Will Be a Guide

In a unanimous ruling on February 19, the Supreme Court of the United Kingdom held that Uber must classify its drivers as workers.[1] Previously classified as self-employed, the drivers will now be entitled to minimum wage, holiday pay, and other rights guaranteed to workers.[2] Although this ruling only applies to the 25 plaintiffs involved with the case, it opens the door for the 60,000 or so Uber drivers in the UK to change their classifications and has potentially far-reaching implications for the UK’s gig economy.[3]

This ruling comes just under four months after California voters passed Proposition 22[4] (“Prop 22”). The referendum overturned a California law that presumptively classified workers as employees.[5] Under Prop 22, drivers for “app-based transportation (rideshare) and delivery companies” are legally classified as independent contractors,[6] thereby exempting them from employment laws like minimum wage, overtime, unemployment insurance, health insurance, and workers’ compensation.[7] Instead, the ballot initiative created other forms of compensation that are unique to independent contractors who are drivers.[8] These include schemes to calculate minimum earnings and healthcare subsidies based on the driver’s “engaged time,” defined as the time between accepting a service request and completing the request.[9] 

Although it was approved by a majority of voters in November 2020, Prop 22 has not been met with open arms since going into effect.[10] Drivers have claimed that their pay per day has decreased under the new rule and that they were surprised to find out that they don’t qualify for some of the additional benefits.[11] Prices for consumers have increased, as services like Uber, Lyft, and Instacart have implemented new fees to pay for the additional costs.[12] And the effects of Prop 22 have even hit unaffiliated workers. The grocery store chains Vons, Pavilions, and Albertsons announced that they will fire their full-time delivery staff with plans to replace them with independent contractor drivers from DoorDash.[13]

It’s important to note that Prop 22 passed in California, a liberal state whose legislature had passed groundbreaking pro-labor legislation just a year prior.[14] It seems that Uber and other tech platforms were able to take advantage of the ideological divide found in the Democratic party. While progressive Democrats believe strongly in protecting the rights of gig workers, moderate Democrats tend to be friendlier towards corporations.[15] Even before Prop 22 passed in California, Lyft backed political actions committees in two other blue states—Illinois and New York—fueling speculation that it plans to launch similar campaigns elsewhere.[16]

While Democrats control both houses of Congress and the White House, this Democratic schism makes it difficult to predict what’s in store for gig workers in the United States on a national scale. President Joe Biden ran on a platform that called for gig workers to be classified as employees.[17] There are steps that the Department of Labor and other agencies can take immediately that would benefit gig workers, such as reinterpreting their work as employment on the federal and IRS levels.[18] However, any rule or regulation put into place by the Biden administration can be overturned the next time we have a Republican president.[19] A more stable solution at the federal level would require Congress to act, but it is unclear if the support needed to create or amend legislation exists in the Democratic party as it exists today.[20]

As the United States federal government takes steps to shape the future of our gig economy, it should consider looking towards the UK and Europe for guidance. The ruling by the Supreme Court of the United Kingdom followed the leads of courts in Spain, Italy, the Netherlands, France, and Belgium, which have all independently ruled in favor of reclassifying gig workers as employees.[21] Additionally, the EU is currently working on legislation to address the issues faced by gig workers.[22] However, Uber has already begun to lobby EU policymakers, [23]  so it’s unclear what recommendations the European Commission will make.

On a state level, voters have the responsibility to look carefully at the effects that Prop 22 has had on Californians. While not every state utilizes referendums like California does,[24] voters still have the power to make their voices heard if and when legislation is proposed elsewhere.

As the commercial goes, America runs on Dunkin’. But who’s bringing you your coffee when it’s snowing and we’re in a pandemic and you just don’t want to go outside right now? It’s more apt to say that America runs on gig workers, and their futures are in all of our hands.

Elyssa Diamond is a staff member of Fordham International Law Journal Volume XLIV.

This is a student blog post and in no way represents the views of the Fordham International Law Journal.

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[1] Natasha Bernal, Uber has lost in the Supreme Court. Here’s what happens next, Wired UK (Feb. 19, 2021, 11:10 AM), https://www.wired.co.uk/article/uber-loses-gig-economy-case.

[2] Id.

[3] Id.

[4] Chris Micheli, When Does Prop. 22 Take Effect?, Cal. Globe (Nov. 13, 2020, 2:15 AM), https://californiaglobe.com/section-2/when-does-prop-22-take-effect/.

[5] California Proposition 22, App-Based Drivers as Contractors and Labor Policies Initiative (2020), Ballotpedia, https://ballotpedia.org/California_Proposition_22,_App-Based_Drivers_as_Contractors_and_Labor_Policies_Initiative_(2020).

[6] Id.

[7] Michael Sainato, 'I can't keep doing this': gig workers say pay has fallen after California's Prop 22, Guardian (Feb. 10, 2021, 5:00 AM), https://www.theguardian.com/us-news/2021/feb/18/uber-lyft-doordash-prop-22-drivers-california.

[8] California Proposition 22, supra note 5.

[9] Id.

[10] See Sainato, supra note 7; Alexander Sammon, Prop 22 Is Here, and It’s Already Worse Than Expected, American Prospect (Jan. 15, 2021), https://prospect.org/labor/prop-22-is-here-already-worse-than-expected-california-gig-workers/.

[11] See Sainato, supra note 7.

[12] See Carolyn Said, Instacart is raising prices to help pay for Prop. 22, S,F, Chronicle (Feb. 19, 2021, 4:00 AM), https://www.sfchronicle.com/business/article/Instacart-is-raising-prices-for-its-California-15961886.php#; Carly Graf, Lyft announces additional fee for California riders to cover cost of Prop. 22 driver benefits, S.F. Examiner (Jan. 13, 2021, 4:00 PM), https://www.sfexaminer.com/news/lyft-announces-additional-fee-for-california-riders-to-cover-cost-of-prop-22-driver-benefits/

[13] See Sammon, supra note 10.

[14] See California Assembly Bill 5 (2019), Ballotpedia, https://ballotpedia.org/California_Assembly_Bill_5_(2019).

[15] See Faiz Siddiqui and Eli Rosenberg, Biden campaigned on making gig workers employees. Now he has to convince Democrats, Wash. Post (Jan. 18, 2021, 8:00 am), https://www.washingtonpost.com/politics/2021/01/18/biden-gig-workers-labor/.

[16] See Edward Ongweso Jr, Gig Companies Spend Millions on Anti-Labor PACs In Illinois and New York, Vice (Nov. 19, 2020, 9:00 AM), https://www.vice.com/en/article/m7avyp/gig-companies-spend-millions-on-anti-labor-pacs-in-illinois-and-new-york.

[17] Siddiqui, supra note 14.

[18] Id.

[19] See Bob Egelko, How Biden administration could upend Prop. 22 and make Uber, Lyft drivers employees, S.F. Chronicle (Nov. 25, 2020, 4:16 AM), https://www.sfchronicle.com/news/article/How-Biden-administration-could-upend-Prop-22-and-15753984.php.

[20] Siddiqui, supra note 14.

[21] Bernal, supra note 1.

[22] Id.

[23] See Id; Uber, A Better Deal: Partnering to Improve Platform Work for All (2021), https://uber.app.box.com/s/tuuydpqj4v6ezvmd9ze81nong03omf11?uclick_id=87e7b830-8f46-46bf-a55e-33cc1c1b6b6f . (Uber published a white paper in February targeting European policymakers in which it proposed a “positive path forward . . . to ensure that adequate protection and benefits are not incompatible with . . . independent workers”),

[24] See States with initiative or referendum, Ballotpedia, https://ballotpedia.org/States_with_initiative_or_referendum.