Gig companies like Uber and Lyft have long resisted classifying workers as employees, stating in regulatory filings that doing so would force them to alter their business model and risk a financial hit.
After California passed a law in 2019 that effectively gave gig workers the legal standing of employees, companies like Uber and Lyft spent some $200 million on a ballot initiative exempting their drivers.
To avoid such threats in other states, the companies have pressed for legislation that classifies drivers as contractors, meaning they are not entitled to protections like a minimum wage and unemployment benefits, Noam Scheiber reports for The New York Times. Industry officials have estimated that making drivers employees could raise labor costs 20 to 30 percent.
As California considered its bill in 2019, the companies met repeatedly with a few large unions, including the Service Employees International Union and the Teamsters, to discuss a deal. But the talks collapsed because many in the labor movement refused to make significant concessions while holding the legislative upper hand.
The California bill passed in September of that year, but after a ballot initiative that exempted drivers was approved last fall, some in labor became more amenable to a deal. New York State, where discussions were already underway, was a natural place to seek one.
The initiative in New York has stalled while facing opposition from labor groups as the state’s legislative session winds down this week. But the effort seems certain to be revived, and the negotiations — in which the companies offered to grant workers bargaining rights and certain benefits but not all the protections of employment — have indicated what an eventual deal could look like in New York and beyond.