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Main article: Labor

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The year of the gig worker uprising

20:17 | 26 December

2019 was a momentous year for gig workers. While the likes of Uber, Lyft, Instacart and DoorDash rely on these workers for their respective core services, the pay does not match how much they’re worth — which is a lot. It’s this issue that lies at the root of gig workers’ demands.

“This past year has been a pivotal year not only for gig workers but for workers across the tech economy,” Gig Workers Rising co-organizer Lauren Casey told TechCrunch. “That unto itself is a win — to see mass mobilization of workers across apps, across sectors and across positions.”

Instacart workers kicked off the year with a class-action lawsuit over wages and tips, and spoke out against Instacart’s practice of subsidizing wages with tips from customers. The suit alleged Instacart “intentionally and maliciously misappropriated gratuities in order to pay plaintiff’s wages even though Instacart maintained that 100 percent of customer tips went directly to shoppers. Based on this representation, Instacart knew customers would believe their tips were being given to shoppers in addition to wages, not to supplement wages entirely.”

Shortly after that lawsuit was filed, Instacart CEO Apoorva Mehta apologized and said the company would take steps to ensure tips were counted separately. Following Instacart’s capitulation, DoorDash and Amazon eventually followed suit and stopped offsetting worker wages with tips.

While Instacart now pays workers their full wages plus 100% of tips, workers take issue with the fact that Instacart’s suggested default tip decreased from 10% to just 5%.

In October, Instacart shoppers went on strike for 72 hours across the nation. Instacart responded by getting rid of a $3 quality bonus. This month, Instacart shoppers are engaging in six days of actions in protest of the company, including filing a complaint with the U.S. Department of Labor as well as filing a wage claim.

“We’re still just trying to get this one tiny thing: double the default tip percentage,” Instacart shopper and protest organizer Sarah (pseudonym) previously told TechCrunch. “We’ve tried endlessly to get them to raise the base guarantee pay. But we feel like, fine, at least give us the higher default tip.”

Meanwhile, DoorDash still has yet to offer back pay to workers who were subjected to the misappropriating of tips. In protest of Instacart, DoorDash and Postmates, labor group Working Washington delivered bags of peanuts their respective offices as a symbol of the pay workers receive.

“This was the year gig workers built a movement that seized control of the future of work from the tech lobbyists and venture capitalists,” Sage Wilson of Working Washington told TechCrunch.

 


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Instacart shoppers plan a series of actions in protest of company’s wage practices

17:00 | 9 December

Instacart shoppers are continuing to hold the grocery startup accountable with their latest set of actions. Kicking off next Monday, Instacart shoppers plan to take one action per day, for six days in protest of Instacart.

“We’re still just trying to get this one tiny thing: double the default tip percentage,” Instacart shopper and protest organizer Sarah (pseudonym) told TechCrunch. “We’ve tried endlessly to get them to raise the base guarantee pay. But we feel like, fine, at least give us the higher default tip.”

Instacart currently suggests a default tip of 5% but workers want Instacart to increase it to 10%. Next week, Instacart shoppers plan to take a number of actions. including filing a complaint with the U.S. Department of Labor as well as filing a wage claim.

Sarah, who has been an Instacart shopper for four years in California, says shoppers have become furious because it’s clear Instacart does not respect them.

“We’re trying to continuously show them that we do have power,” Sarah said. “I believe this protest of seven days is going to be the most powerful thing we’ve ever done because it has the ability to really fuck them up.”

The full schedule is as follows:

  • December 16: File complaint with the U.S. Department of Labor, asking the department to audit Instacart’s previous practice of misappropriating tips
  • December 17: Contact federal legislators and ask them to hold Instacart accountable to minimum wage laws and more
  • December 18: File a wage claim regarding Instacart’s classification of shoppers as 1099 independent contractors
  • December 19: Hand-deliver binders, filled with a letter and personal notes from workers, to CEOs of six partner stores. Workers want partner stores to help ensure minimum standards and earnings.
  • December 20: Contact the Occupational Safety and Health Administration regarding how Instacart shoppers sometimes have to fulfill heavy orders, which can lead to injuries on the job.
  • December 21: Contact state legislators

This comes after Instacart shoppers organized a nationwide protest where they went on strike for 72 hours in demand of a better tip and fee structure. Following that protest, Instacart got rid of the $3 quality bonus.

“When we did the walk-off, that required people to take off several days from work,” Sarah said. “We don’t want people to miss out on money so we’re doing something that will take less time.”

So far, more than 300 workers have signed up to participate in the seven days of action. This upcoming action follows years’ worth of protesting. Back in 2016, Instacart removed the option to tip in favor of guaranteeing its workers higher delivery commissions. About a month later, following pressure from its workers, the company reintroduced tipping. Then, in April 2018, Instacart began suggesting a 5% default tip and reduced its service fee from a 10% waivable fee to a 5% fixed fee.

Instacart has previously said it’s committed to providing its shoppers with an earnings structure that offers upfront pay and guaranteed minimums.

“We respect the voices of all shoppers and take the feedback of our community very seriously,” an Instacart spokesperson previously said in a statement. “We will continue to listen and engage with shoppers to improve their experience.”

 


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Fired Google workers will file federal complaint alleging the company wrongfully terminated them

17:34 | 3 December

The four ex-Google employees, also known as the “Thanksgiving Four,” who were fired right before the holiday, are planning to file a complaint with the National Labor Relations Board.

“We look forward to hearing the NLRB’s findings, which we expect will confirm that Google acted unlawfully,” ex-Googlers Laurence Berland, Paul Duke, Rebecca Rivers and Sophie Waldman wrote on Medium today.

The plan is to argue that Google fired them for organizing, which is a protected activity. As the Thanksgiving Four outlined on Medium, they organized around a variety of topics, including Google’s treatment of its temporary, vendor and contractor workers, Google’s alleged retaliation against employees who organized, the company’s work with Customs and Border Protection and more.

“Google didn’t respond by honoring its values, or abiding by the law,” the four wrote on Medium. “It responded like a large corporation more interested in revenue growth than in ensuring worker rights and ethical conduct. Last week, Google fired us for engaging in protected labor organizing.”

Last month, Google put Rivers and Berland on leave for allegedly violating company policies. At the time, Google said one had searched for and shared confidential documents that were not pertinent to their job, and one had looked at the individual calendars of some staffers.

Following a protest in support of the two, Rivers, Berland, Duke and Waldman were fired.

Google declined to comment but confirmed an internal note published by Bloomberg, which said Google fired a total of four employees for repeatedly violating its data-security policies.

Since the massive employee-led walkout last November, organizers say Google has tried to undermine further attempts to organize. In July, walkout co-organizer Meredith Whittaker left the company following reports of retaliation in April. Organizers of the rally say both Rivers and Berland were put on leave for “simply looking at openly shared internal information.”

The Thanksgiving Four’s terminations came shortly after The New York Times reported Google hired an anti-union firm, IRI Consultants. Google employees, who the Times kept anonymous, discovered Google’s relationship with ISI via internal calendar entries.

“Google fails to understand that workers are the ones who built the company and its most successful products,” the four wrote. “And that we can stop building them. No company — tech giant or otherwise — should be able to interfere with workers’ rights to organize for better working conditions, including ethical business practices.”

TechCrunch has reached out to Google and will update this story if we hear back.

 


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DoorDash tipping practices prompts lawsuit from DC Attorney General

20:08 | 19 November

DoorDash is facing a new lawsuit regarding its tipping practices. This time, it’s coming from Washington, D.C. Attorney General Karl Racine. In the suit, Racine accuses DoorDash of engaging in deceptive tipping practices while also failing to provide any relief to workers whose tips were taken.

Racine’s office first opened an investigation into DoorDash’s practices in March 2019. In D.C., the suit alleges DoorDash customers paid millions of dollars in tips that the company used to offset the costs of its payments to workers over the span of two years. Racine’s office is seeking to make DoorDash pay damages and restitution.

“We strongly disagree with and are disappointed by the action taken today,” a DoorDash spokesperson told TechCrunch in an email. “Transparency is of paramount importance, which is why we publicly disclosed how our previous pay model worked in communications specifically created for Dashers, consumers, and the general public starting in 2017. We’ve also worked with an independent third party to verify that we have always paid 100% of tips to Dashers. We believe the assertions made in the complaint are without merit and we look forward to responding to them through the legal process.”

The suit focuses on how DoorDash had been offsetting the amount it pays its delivery drivers with customer tips. DoorDash’s payment structure as follows: $1 plus customer tip plus pay boost, which varies based on the complexity of order, distance to restaurants and other factors. It’s only when a customer doesn’t tip at all, which DoorDash told Fast Company happens about 15 percent of the time, that DoorDash is on the hook to pay the entire guaranteed amount.

In July, DoorDash announced it would change its tipping model, about a month after it doubled down on that same model. In August, DoorDash revealed how its new model would work but it later made clear that it would not be paying back any workers for lost wages.

“There’s no ‘back pay’ at issue here because every cent of every tip on DoorDash has always gone and will always go to Dashers,” a DoorDash spokesperson previously told TechCrunch via email in response to a question about whether or not DoorDash would back pay its delivery workers.

When Instacart changed its tipping practices earlier this year, it retroactively compensated shoppers when tips were included in the payment minimums. DoorDash, however, does not see the need for back pay. DoorDash fully implemented its new policy in September.

Meanwhile, DoorDash is funding a ballot initiative alongside Uber and Lyft to try to ensure it doesn’t have to treat its workers as W-2 employees.

The ballot measure looks to implement an earnings guarantee of at least 120% of minimum wage while on the job, 30 cents per mile for expenses, a healthcare stipend, occupational accident insurance for on-the-job injuries, protection against discrimination and sexual harassment and automobile accident and liability insurance.

This initiative is a direct response to the legalization of AB-5, the gig worker bill that will make it harder for the likes of Uber, Lyft, DoorDash and other gig economy companies to classify their workers as 1099 independent contractors.

I’ve reached out to DoorDash and will update this story if I hear back.

 


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Instacart is under fire for how it compensates shoppers

19:18 | 12 November

The Tech Workers Coalition and Gig Workers Rising are outside the company’s headquarters in San Francisco this morning in support of shoppers, who demand Instacart reinstate the $3 quality bonus, implement a 10% default tip and eliminate its service fees.

Last week, Instacart got rid of the $3 quality bonus shortly after thousands of shoppers participated in a 72-hour strike where workers demanded a better tip and fee structure. By protesting outside of Instacart’s SF HQ, shoppers are hoping to reach employees and get them on their side.

“We’re asking that Instacart employees urge management to reverse this decision,” organizers wrote in a handout…”As a worker who builds the product, you have a say over how it’s used.”

Back in 2016, Instacart removed the option to tip in favor of guaranteeing its workers higher delivery commissions. About a month later, following pressure from its workers, the company reintroduced tipping. Then, in April 2018, Instacart began suggesting a 5% default tip and reduced its service fee from a 10% waivable fee to a 5% fixed fee.

“We take the feedback of the shopper community very seriously and remain committed to listening to and using that feedback to improve their experience,” an Instacart spokesperson told TechCrunch last month.

The protest was on the heels of a class-action lawsuit over wages and tips, as well as a tipping debacle where Instacart included tips in its base pay for shoppers. Instacart, however, has since stopped that practice and provided shoppers with back pay. Though, Fast Company recently reported that Instacart delivery drivers’ tips are mysteriously decreasing.

Following Instacart’s post-protest move to eliminate the $3 quality bonus, #DeleteInstacart and #BoycottInstacart started making waves on Twitter. California Assemblyperson Lorena Gonzalez, the one who authored gig worker bill AB 5, joined in.

TechCrunch has reached out to Instacart and will update this story if we hear back.

 


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Labor leaders and startup founders talk how to build a sustainable gig economy

01:44 | 17 October

Over the past few years, gig economy companies and the treatment of their labor force has become a hot button issue for public and private sector debate.

At our recent annual Disrupt event in San Francisco, we dug into how founders, companies and the broader community can play a positive role in the gig economy, with help from Derecka Mehrens, an executive director at Working Partnerships USA and co-founder of Silicon Valley Rising — an advocacy campaign focused on fighting for tech worker rights and creating an inclusive tech economy — and Amanda de Cadenet, founder of Girlgaze, a platform that connects advertisers with a network of 200,000 female-identifying and non-binary creatives.

Derecka and Amanda dove deep into where incumbent gig companies have fallen short, what they’re doing to right the ship, whether VC and hyper-growth mentalities fit into a sustainable gig economy, as well as thoughts on Uber’s new ‘Uber Works’ platform and CA AB-5. The following has been lightly edited for length and clarity.

Where current gig companies are failing

Arman Tabatabai: What was the original promise and value proposition of the gig economy? What went wrong?

Derecka Mehrens: The gig economy exists in a larger context, which is one in which neoliberalism is failing, trickle-down economics is proven wrong, and every day working people aren’t surviving and are looking for something more.

And so you have a situation in which the system we put together to create employment, to create our communities, to build our housing, to give us jobs is dysfunctional. And within that, folks are going to come up with disruptive solutions to pieces of it with a promise in mind to solve a problem. But without a larger solution, that will end up, in our view, exacerbating existing inequalities.

 


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Learn how to help build a sustainable gig economy at Disrupt SF

19:00 | 26 September

A handful of years ago, the on-demand or ‘gig’ economy was seen as an innovative system of modern work that provided workers and consumers alike with flexibility, independence, and convenience. It seems like every week, a new on-demand or labor marketplace startup would stroll through Sand Hill Road with a slick logo and a new way to flip the nature of work on its head and would walk out with seven-figure checks.  

However, the gig economy ballooned — now permeating nearly every major industry — and its negative externalities have become inescapably evident. In the past year alone, whether it was new headline-grabbing regulations or new disclosures from the high-profile IPOs of Uber and Lyft, the issue of inequitable labor treatment for gig workers has risen to the forefront of public debate. Now, more activists, founders and companies are dedicated to figuring out how to create a more just and sustainable economic system for gig workers.

This year at TechCrunch Disrupt SF, we’ll be joined on the Extra Crunch stage by a panel of gig-focused civic leaders and founders to break down how one can best be a positive force in the modern gig economy.

From the activist side, we have Derecka Mehrens, an Executive Director at Working Partnerships USA and co-founder of Silicon Valley Rising – an advocacy campaign focused on fighting for tech worker rights and creating an inclusive tech economy. Though Silicon Valley Rising, Derecka has worked with some of the Valley’s largest and most influential tech giants (including Google and Apple) to invest in and improve labor and renter housing protections for local workers. With roughly two decades in civic advocacy, Derecka has helped and continues to help Bay Area workers organize, play more active roles in local policy, and reach milestone victories in wage improvement.

We’ll also dive into the founder’s perspective with Amanda de Cadenet, founder of Girlgaze, a platform that connects advertisers with a network of 200,000 female-identifying and non-binary creatives. Prior to founding Girlgaze, Amanda founded the website, online community and interview series known as “The Conversation”, which focuses on female empowerment and bringing to light key social issues that plague the female-identifying population. As a former photographer, author and TV host herself, Amanda continues to build companies determined to shift the lack of diverse and equal gender representation in media and creative industries. 

We’ll be diving deep into all the roles to be played by the public sector, startups and the private sector, gig workers themselves and the broader community in ensuring we have an equitable future of work landscape. We couldn’t be more excited to tackle all these topics and we hope to see you there! Buy tickets to Disrupt SF here at an early-bird rate!

Did you know Extra Crunch annual members get 20% off all TechCrunch event tickets? Head over here to get your annual pass, and then email extracrunch@techcrunch.com to get your 20% discount. Please note that it can take up to 24 hours to issue the discount code.

 


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Paro raises $10 million series B to offer corporate finance expertise on demand

14:00 | 26 September

As any CFO can attest, corporate finance is extraordinarily complicated. From tax preparation, to financial controls, to cash flow estimation and more, the finance department of any major company often has to turnaround sophisticated analyses with extreme attention to detail — and quick.

Most of the time, businesses outsource at least part of those financial functions to the big four accounting firms or to smaller firms, but as with all consulting firms, getting contracts signed and work underway can take significant time and effort.

That’s where Paro comes in. The Chicago-based expert marketplace wants to provide corporate clients with on-demand sophisticated expertise across a range of financial functions.

The company announced today that it has raised a $10 million series B venture capital round led by Mark Fernandes of Sierra Ventures. Existing investors Revolution Ventures, KGC Capital, and Tom Williams also participated.

When we last checked in with Paro 18 months ago, it had just raised a $5 million series A from Clara Sieg at Revolution. Since that time, the marketplace has continued to expand, and CEO and co-founder Michael Burdick says that the company is increasingly zero-ing in on the types of clients that best match the platform’s offerings.

“The cognitive load is huge,” Burdick explained for companies trying to find this talent on existing marketplaces. “You’re posting project descriptions, you’re wading through all these mountains of unfiltered proposals, you’re having to shortlist candidates.” That often leads CFOs right back to the incumbent accounting firms, since they are much more plug-and-play.

Paro has taken a different tact, focusing instead on recruiting and retaining the highest-quality financial talent on its marketplace. The company has built out and continues to improve tools to help the marketplace’s experts focus on the work that makes them unique rather than the drudgery that can come as part of their jobs. We’re “automating a lot of their back office functions [and] giving them workflow automation tools to make them more productive and efficient and earn more,” Burdick said. He dubbed this the “freelancer operating system.”

Sieg of Revolution also noted that the pursuit of quality has been beneficial for Paro’s bottom line. “Unlike a consulting gig, where it’s a one-time analysis and a sort of lumpy engagement, you need monthly financials, you need annual tax reporting, you need audit work, and so these are really ongoing relationships,” she said. That “gets us away from some of the informal problems that you’ve seen in labor marketplaces, which is really high customer acquisition costs, and relatively low take rates, and not very much recurring business.”

As Paro scales, Burdick sees an opportunity to leverage the firm’s data network effects to build a moat around its business. “There is inherently a wealth of data at our fingertips that we’re leveraging, giving back to the freelancers and the clients,” he said.

Online labor marketplaces targeting business functions have grown dramatically in popularity in recent years, with companies like Pilot raising large rounds of venture capital. Burdick says that Paro differentiates from bookkeeping services like Pilot by focusing on elite financial talent which ultimately leads to higher margins.

The company intends to use the capital to continue expanding its product and sales staffs.

 


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Despite tipping policy changes, DoorDash says back pay is not ‘at issue here’

21:31 | 13 September

When DoorDash announced changes in its tipping model last month, it was certainly a step in the right direction. Some workers, however, have said it’s not enough. In addition to wanting fair wages, they want back pay.

In light of DoorDash’s announcement, labor group Working Washington said a key question remained: “Will they pay workers backpay for the customer tips the company has been misappropriating since 2017?”

“There’s no ‘back pay’ at issue here because every cent of every tip on DoorDash has always gone and will always go to Dashers,” a DoorDash spokesperson told TechCrunch via email in response to a question about whether or not DoorDash would back pay its delivery workers.

When Instacart changed its tipping practices earlier this year, it also retroactively compensated shoppers when tips were included in the payment minimums. DoorDash, however, does not see the need for back pay.

“An independent third-party research firm has confirmed that Dashers were paid as was explained on our website and in our app: Dashers received a minimum base bay from DoorDash, plus 100% of customer tips, plus additional pay for some orders to reach the guaranteed minimum,” the spokesperson said. “A reminder that under our old model, DoorDash would boost pay if a customer left little or no tip. Although boost pay was intended to help Dashers, we recognize that it also had the unintended effect of making some customers feel like their tips didn’t matter. Under our new model, every dollar a customer tips will be an extra dollar in their Dasher’s pocket.”

Additionally, DoorDash says it will increase the amount it pays on average through base pay and bonuses. Ideally, that will increase overall earnings for Dashers.

“This commitment is incredibly important to us, which is why we’ll be working with that same independent third party to ensure that Dasher earnings under this new model increase,” the spokesperson said.

As DoorDash previously announced, the new payment policies will go into effect this month following feedback from its tests. Since the announcement, however, DoorDash has put $30 million toward a campaign committee to establish a 2020 ballot initiative that would enable companies to provide workers benefits, establish wage commitments and guarantees, offer flexibility and establish that drivers are not employees. Lyft and Uber have also each put $30 million into the initiative. Meanwhile, gig worker protections bill AB5 passed.

AB5 would help to ensure gig economy workers are entitled to minimum wage, workers’ compensation and other benefits by requiring employers to apply the ABC test. The bill, first introduced in December 2018, aims to codify the ruling established in Dynamex Operations West, Inc. v Superior Court of Los Angeles. In that case, the court applied the ABC test and decided Dynamex wrongfully classified its workers as independent contractors.

According to the ABC test, in order for a hiring entity to legally classify a worker as an independent contractor, it must prove the worker is free from the control and direction of the hiring entity, performs work outside the scope of the entity’s business and is regularly engaged in an “independently established trade, occupation, or business of the same nature as the work performed.”

The bill has yet to be signed into law, but Governor Gavin Newsom is expected to do so. Moving forward, we can surely expect DoorDash to continue advocating for its independent worker model. We can also expect organizers from Working Washington to keep advocating for better wages and protections.

 


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Uber plans to keep defending independent contractor model for drivers

23:06 | 11 September

In light of gig worker protections bill AB5 passing in the California State Senate last night, and amendments to AB5 passing in the Assembly this morning, Uber has made it clear it plans to do whatever it takes to keep its drivers independent contractors.

“We will continue to advocate for a compromise agreement,” Uber Chief Legal Officer Tony West said on a press call today.

As Uber outlined last month, the company is pushing for a framework that would establish a guaranteed earnings minimum while on a trip, offer portable benefits and enable drivers to “have a collective voice.”

He went on to say that Uber is continuing to explore several legal and political options to lay the groundwork for a statewide ballot initiative in 2020. Uber and Lyft announced a $60 million joint initiative last month, and now, West is saying Uber is open to investing even more money in that committee account.

“This is not our first choice,” West said. “At the same time, we need to make sure we are exploring all options and all alternatives to put forward a framework that works for the 21st-century economy and we believe we have a framework that does that.”

AB5 would help to ensure gig economy workers are entitled to minimum wage, workers’ compensation and other benefits by requiring employers to apply the ABC test. The bill, first introduced in December 2018, aims to codfiy the ruling established in Dynamex Operations West, Inc. v Superior Court of Los Angeles. In that case, the court applied the ABC test and decided Dynamex wrongfully classified its workers as independent contractors.

According to the ABC test, in order for a hiring entity to legally classify a worker as an independent contractor, it must prove the worker is free from the control and direction of the hiring entity, performs work outside the scope of the entity’s business and is regularly engaged in an “independently established trade, occupation, or business of the same nature as the work performed.”

If Uber were to fail this test, drivers would not be able to determine when, where and how often they work, nor would they be able to work for more than one platform at a time, West said.

“I do think there would be significant changes in the experience drivers would have,” West said.

But West believes Uber would not fail this test. While it will be required to pass this test in the likely event AB5 gets signed into law, West pointed out “we have been successful in arguing under this ABC test in the past that drivers are independent and independent contractors,” West said. “We believe that to be true.”

There would surely be a financial impact if Uber fails the test, but West declined to comment on just what that fiscal impact would be. Industry analysts, however, have estimated it could result in up to a 30% cost increase.

As noted earlier, the bill is expected to pass, as Gov. Gavin Newsom has previously expressed his support for the measure. Though, Newsom said earlier today, he’s still in negotiations with both Uber and Lyft.

“The governor has been pretty clear he is fully committed to a negotiated solution here,” West said. “He’s been clear to us on that message in private and has publicly stated that now.”

Following the bill’s passing in the Senate, Lyft said the state missed an opportunity to support the majority of rideshare drivers who want a solution that balances flexibility with earnings standard and benefits.

“The fact that there were more than 50 industries carved out of AB5 is very telling,” a Lyft spokesperson said. “We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need.”

Earlier today, Lyft sent out an email to drivers regarding AB5 and how if it’s signed into law, drivers “may soon be required to drive specific shifts, stick to specific areas, and drive for only a single platform (such as Lyft, Uber, Doordash, or others).”

Despite what Uber and Lyft are saying, there are a number of drivers who have fought long and hard to ensure the bill passes. Two of the main organizations behind the actions in support of AB5 are Gig Workers Rising and Mobile Workers Alliance. In addition to urging legislators to pass AB5, Uber and Lyft drivers organizing with Gig Workers Rising also want the right to form a union.

“AB 5 is only the beginning,” Edan Alva, a driver with Gig Workers Rising, said in a statement. “I talk daily to other drivers who want a change but they are scared. They don’t want to lose their only source of income. But just because someone really needs to work does not mean that their rights as a worker should be stepped all over. That is why a union is critical. It simply won’t work without it.”

 


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