The business model of companies like Uber and Lyft, with their reliance on a vast force of independent contractors, may soon be facing an existential threat in New York State.
A group of labor advocates has formed a coalition seeking to impose a new standard in New York for what qualifies as an “independent contractor.” The coalition takes direct aim at Uber’s and Lyft’s contention that it does not have to provide employee benefits like unemployment insurance to its workers because they are independent contractors, not actual employees.
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“These workers are exploited every single day,” said Alison Hirsh, the political director at 32BJ, one of the coalition members. “They are treated incredibly poorly. Their income is not reliable. Their health and welfare standards are incredibly low. They’re at the whim of these companies that dictate the terms of their work.”
The law the coalition is seeking would apply to Uber and Lyft drivers, and also to nail salon workers and bike delivery workers for Door Dash.
“Our approach is really saying it’s got to be universal standards,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance, another coalition member. Other members include the New York Nail Salon Workers Association, the Legal Aid Society, Make the Road New York, an affiliate of SEIU and the National Employment Law Project.
The proposed law would call for a three-part test to determine if in fact a worker is an employee. The so-called “ABC test” would find a worker an independent contractor, not an employee, if the worker is “free from control and direction in how they operate in their day to day job;” “performing services that are outside an employer’s usual course of business;” and “engaging in an independent trade.”
California is in the process of passing a similar bill, an effort that has sparked a firestorm among tech-sector players. Uber, Lyft and Door Dash have vowed to spend up to $90 million fighting the effort.
Spokespeople for Uber and Lyft had no immediate comment. Nor did spokespeople for the New York State Senate. A spokesperson for Gov. Andrew Cuomo had no immediate comment.
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