August 29, 2019 / 7:26 PM / 16 days ago

Breakingviews - Uber labor bill risks straying from righteous road

A man arrives at the Uber offices in Queens, New York, U.S., February 2, 2017. REUTERS/Brendan McDermid

SAN FRANCISCO (Reuters Breakingviews) - A labor bill aimed at helping Uber Technologies drivers, under discussion in the ride-hailing giant’s own state, risks straying from the righteous road. California wants gig-economy firms to give workers paid vacation and sick time, following similar pushes in Europe. It makes sense, but other workers outside of tech could use the same protections.

The plan known as AB5 is a good first step in reducing the power imbalance between companies and workers. Currently under consideration by the state senate, it would change the criteria for which businesses determine if a person is an employee. That wouldn’t be the first move in that direction. A French appeals court in January ruled a former driver had been employed by Uber. In the UK, a court decision last December could force Uber to offer minimum wage and paid vacations to drivers.

But it’s not just the $60 billion Uber that doesn’t give its workers a safety net. Realtors, insurance agents and hair stylists have already secured carve-outs to the bill – and other professions from travel agents to truckers are arguing for similar treatment. That ignores the reality that big companies in any industry have an incentive to give workers as little as they can get away with. Uber drivers can switch to Lyft, or DoorDash, or Postmates more easily than a nail technician can switch salons.

Even if the rule sticks, the greater challenge will be enforcing it. Massachusetts has already adopted the standard that California is considering with uneven effects. Uber still considers drivers contractors there. A switch would rack up expenses for the money-losing firm. The burden is on the worker to prove they are an employee, which generates the potential for lawsuits but offers little certainty of better treatment.

A similar outcome could occur in California if the labor bill is passed. It’s another reason to consider what workers need in a comprehensive way. In its simplest form, a person who works regularly for a business for a significant number of hours has a good reason to think of themselves as an employee, and be treated as such. Cherry picking winners and losers – or fixating on Uber and its peers – would be to miss the opportunity to rethink protections for all earners.

Breakingviews

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