An effort backed by the New York State AFL-CIO would create a new bargaining scheme for app-based workers without addressing the question of whether or not these workers are legally “employees.”

Labor Notes obtained a draft version of the legislation that is being negotiated by unions and app employers.

Workers for apps like Uber, Lyft, and DoorDash are currently considered independent contractors; most in the labor movement consider them misclassified, a tactic the companies use to avoid paying the full cost of benefits. These workers are blocked from unionizing by antitrust laws, and don’t have the protection of the National Labor Relations Board (or many other protections).

To sidestep this, the draft legislation would enact a new process to recognize unions and bargain agreements—relying on the state government to enact the negotiated “recommendations” as regulations.

But the draft bill includes much to give labor activists pause, and marks a departure from the national push against misclassification.

“It’s about creating a distraction and a real carve-out from the PRO Act,” said Bhairavi Desai, director of the New York Taxi Workers Alliance.

The federal PRO Act, which much of the labor movement is pushing for, would sidestep the question of misclassification but allow independent contractors to unionize under certain conditions using the National Labor Relations Act.

New York State Senator Jessica Ramos, chair of the Labor Committee, has just released a statement that she will not be backing the draft bill because “We will not legitimize any company union. We will not undermine the PRO Act.”

THE BIG UGLIES

We don’t know what would end up in the final legislation. But the biggest immediate concerns fall into two major categories: departures from existing labor law, and lessening local regulatory power over gig companies.

This legislation says that workers would be put into a union that they likely never voted for, and which would not be funded by workers, and barred from putting up any serious fight for an agreement—no strikes, no boycotts, no picketing. It would create a new type of legally recognized union which is not financially accountable to its members. This should be deeply concerning to those who care about building powerful, democratic unions.

This draft legislation would also take away local governments’ power to rein in gig employers—New York localities could no longer create specific minimum wages for app workers or rules about their working conditions. What’s more, cities would lose the ability to legislate about these companies at all. Local governments couldn’t create taxes or surcharges on the services, or rules for how they must operate. NYC already has a cap on the number of rideshare drivers; this would be thrown out. If a local government wanted to put a surcharge on rides or deliveries to fund infrastructure, or green jobs, or schools—it couldn’t. This power would rest solely with the state.

This type of legislation is not entirely new, but this may be the furthest it’s gotten. Two years ago, as California legislators were preparing Assembly Bill 5 to rein in misclassification, Uber and Lyft were approaching major unions, including SEIU and the Teamsters, in an attempt to preempt the legislation with a compromise. When that didn’t work, the companies spent hundreds of millions of dollars on last fall’s ballot measure, Proposition 22, to carve themselves out. They won, and they’ve made no secret of their intention to get the same deal in other states.

Now, up against the might of these incredibly powerful companies, some labor leaders are looking for compromise legislation of their own. What’s in it for the apps? Legislation like this could help siphon off labor organizing energy and undermine campaigns for tougher legislation.

TWO MASSIVE UNITS, ONE UNION EACH

The legislation covers app-based workers in two groups: rideshare drivers, who perform on-call taxi service for companies like Uber and Lyft; and delivery workers, who deliver packages, groceries, and restaurant orders for companies like Instacart, Amazon, DoorDash, and Seamless. Each of these two groups would become a massive, statewide unit. The draft bill sets up a process (detailed below) for one union to cover each group.

Rideshare companies employ around 80,000 drivers in New York City alone, a figure that is currently capped by local legislation. The number of delivery workers is less clear, but would include between 50,000 and 80,000 food delivery workers as well as Amazon “Flex” drivers and probably others.

The likely unions—based on who’s been pushing this legislation—would be the Machinists’ Independent Drivers Guild for the rideshare drivers, and the Transport Workers Union for delivery workers. The IDG already claims to represent the 80,000 app-based drivers in New York City, but this would formalize its role. The Machinists’ project has come under scrutiny for receiving money from Uber.

RECOGNITION

The recognition process relies in part on labor peace agreements—familiar in places like construction and the burgeoning cannabis industry. Here, the agreement requires companies to sign a peace deal with a union that meets certain requirements; the union is then restricted from encouraging any “picketing, strikes, slow downs, or boycotts” until a finalized deal has been ratified by the state.

The unions only have to show signed cards of support from 10 percent of the workers in the unit—there’s no election. (What if more than one union shows interest? It reads as an afterthought; the labor commissioner is supposed to come up with a process in that case.) Contrast that with the union authorization process run by the National Labor Relations Board, where 30 percent of workers must sign union cards to trigger an election, which can even include competing unions on the same ballot.

Under the draft law, the state ultimately gets to decide if the union should be recognized—because, in addition to the 10 percent show of support, the union must have “demonstrated experience in representing network workers or other related workers in reaching agreements with companies for at least five years.” (“Network” is being used here as a synonym for “app.”)

“We read that as they want to make sure TWA is locked out,” Desai said. “It’s meant to favor—that’s not even strong enough—IDG and it’s meant to get rid of us.”

Service Employees Local 32BJ has been supporting the Worker’s Justice Project, a worker center, in its campaign to organize app-based delivery drivers—but will the state say that WJP or even SEIU has the requisite experience representing “network” workers?

Getting rid of or changing the union would require a much more significant lift, and an election. Thirty percent of workers would have to say they wanted a decertification election, and a majority of all workers (not just those voting) would have to vote to decertify. If they wanted a different union, workers would have to go through the process of showing 10 percent support again (after decertifying the existing union), and have the state “certify” their organization.

WHAT’S THE DEAL?

Once a union was certified, the rideshare companies would bargain together for one agreement, and the delivery companies would bargain a separate one, each across the table from the chosen union. The draft legislation demands that the negotiators bring state representatives a deal covering a handful of topics, including union access to workers and a minimum five-year agreement.

The two most remarkable topics they would negotiate are a “portable benefits fund” and the minimum wage for drivers. Portable benefits is a vague term that can mean a lot of different things that aren’t tied to a specific job—anything from Social Security to privatized unemployment insurance for misclassified workers. Here, the union and the employers are told to set up a nonprofit and negotiate how much money to send its way, though the legislation doesn’t say anything about what benefits this should cover. Unemployment? Workers compensation? Family leave? It would be up to them to figure that out. Many of these things are mandated for W-2 employees by laws that don’t cover independent contractors.

The wage negotiations are supposed to have a “floor,” consisting of a local minimum wage plus a mileage rate. The kicker, though, is that these only cover active time—that is, time the workers spend performing the job. App workers have long complained about unpaid idle time while they’re waiting for dispatch—this was a big push for California’s Assembly Bill 5, and NYC passed a driver minimum wage that covered inactive time (more on this later).

NO DUES, BUT LOTS OF CASH

The draft legislation provides a direct line of funding for the unions involved, in the form of surcharges. Each ride in an Uber or food delivery by an Instacart worker would have a 10-cent surcharge, paid by the customer, which companies would collect and then hand over to the unions.

This doesn’t necessarily preclude unions from setting up dues and membership structures, but it does provide them a huge pot of money without having to do that. Right before the pandemic, rideshare companies were hitting 750,000 rides a day in New York City. So the rideshare union would get $75,000 per day—almost $27.5 million per year—just from NYC, even before you figure in all the drivers in the rest of the state.

PROGNOSIS

The New York legislature is only in session for a little less than two weeks, leaving a small window for this to pass this year. The IDG has tried to pass similar legislation over the past several years, but this time it is opening the door to the support of another union by including a separate unit of delivery workers.

Similar legislation was floated recently in Connecticut, before it was allegedly shut down by the national AFL-CIO—in part because of its contradictions with the federal PRO Act, which would provide many misclassified “independent contractors” the right to organize and bargain under the National Labor Relations Act.

As app-based employers continue to grow in size and power, they will keep looking for creative new ways to undermine labor law. Unfortunately, it’s all too easy for them to find allies in labor who are willing to gamble away workers’ rights for the promise of quick, massive membership increases.