Don't Force Gig Workers to Go Pro
When the COVID-19 pandemic closed restaurant dining rooms, Americans skipped drive-thru and takeout lines with the help of mobile delivery apps like Doordash, Grubhub and Uber Eats.
The four largest apps more than doubled their revenue last April through September compared with the same six-month span in 2019, according to a MarketWatch analysis of Securities and Exchange Commission filings.
Delivery services remain popular, but a bill that just passed the U.S. House could put drivers out of work and destroy the gig economy as we know it.
The Protecting the Right to Organize Act of 2021, a grab bag of labor law changes, would force businesses to reclassify millions of independent contractors as employees. On paper, drivers gain the right to unionize, and full-time workers would be eligible for heath insurance benefits. But where the rubber meets the road, most newly minted employees would find themselves unemployed.
Bill sponsor Rep. Bobby Scott, D-Va., adopted a California Supreme Court ruling's rubric for differentiating contractors from employees. Known as the ABC test, the provision reserves independent contractor status for workers who are "free from control and direction," perform services "outside the usual course of the business of the employer" and are "customarily engaged in an independently established trade, occupation, profession, or business of the same nature" as the employer.
A ride-hailing or delivery company can't claim picking up passengers or fulfilling food orders is outside its normal course of business. And in order to qualify as contractors, drivers would have to compete with themselves by performing similar work without the popular apps that connect them to customers.
Businesses can't afford to convert their vast networks of far-flung contractors to traditional employees. If they remain in operation at all, they're likely to cut most drivers loose and operate in select markets with a skeleton crew.
California legislators implemented the ABC test statewide in a 2019 law. Uber and Lyft planned to suspend service in the Golden State, but an appeals court averted that crisis by allowing them to delay compliance.
In November, California voters passed Proposition 22 to exempt app-based drivers from the employee classification requirement. In the most progressive, union-friendly state, residents reasoned that enhanced worker protections are counterproductive if they effectively wipe out an entire industry.
Congressional Democrats are determined to repeat California's failed experiment. PRO Act proponents who believe the gig economy exploits workers fundamentally misunderstand why ride-hailing took off in the first place.