Ride-sharing — or as they prefer to be called, “transportation management” — companies like Uber and Lyft have been in the news recently for protests in France and increased competition in China. But a bigger issue here in the United States may be the impact of these new modes of local transportation on the model for corporate-employee relations.
I have written before about the California Labor Commission’s ruling in July that Uber drivers should be classified as employees of the company, not independent contractors. Just last week, however, a second wave of attack on the contractor model for app-based sharing services arose in, of all places, Seattle. The city is considering an ordinance that would require transportation management companies to allow “exclusive driver representatives” to negotiate terms and conditions of work — that is, to unionize — on behalf of all drivers. The sponsor of the bill, Councilman Mike O’Brien, said it is necessary to “innovate and try a new approach to help these drivers realize Seattle’s dream that everyone can make a living wage.”
Whatever one thinks politically about income inequality and the proper role of government in safeguarding a “living wage,” this local initiative raises a number of serious questions. First and most importantly, it fails to reflect the rapidly changing nature of employment in the U.S., especially in the aftermath of the 2008-10 Great Recession. In the face of massive layoffs and reductions in hiring, many people, particularly students and recent college graduates, opted for part-time positions, unpaid internships or “1099” independent contractor arrangements in order to make ends meet and to gain an advantage in pursuing full-time employment opportunities with both blue-chip and emerging growth companies. The accelerating one-two punch of automation and offshoring just added to the pressures on workers to find new models of paid jobs other than low-wage retail positions.