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Sep 16, 2020

Following a recent temporary reprieve granted by a California appeals court, Uber and Lyft recently managed to avoid having to follow through on their previous threat to suspend services in the state where they were founded. The threats were in response to a California court order that the rideshare companies comply with California Assembly Bill 5 (AB5) by reclassifying their drivers as employees and not independent contractors. Uber and Lyft responded that doing so would require them to shut down operations in California in order to restructure their businesses, thus prompting the reprieve. 

But this legal battle is far from over as the reprieve only buys the companies more time and doesn’t let them off the hook. However, between the California Superior Court’s arguments on one side, and the rideshare companies’ grievances on the other, something crucial is being drowned out: the voices of the drivers themselves.

For their part, Uber and Lyft have made numerous claims representing what drivers want, chief among these being that most drivers prefer to be independent contractors. The biggest reason for this, the companies say, is because drivers value the flexibility that gig work allows. 

Another reason, according to Uber, is that most drivers work part-time. Since part-time drivers are often doing this work in addition to other jobs, it makes sense that flexibility would be important for them. 

There is, however, a problem with the data that Uber often cites to support its claims: the conflicts of interest

What Do the Drivers Themselves Want? 

In a survey sponsored by Uber, questions that drivers were asked framed flexibility and being employees as mutually exclusive. But that does not have to be the case. 

Many employees at various companies happen to enjoy various levels of flexibility while also receiving benefits. Therefore, we need more research that is fair and unbiased and that ensures that drivers participating in surveys fully understand the nuances and complexities of the questions they are being asked. 

Unfortunately, not all drivers may be aware of all the implications of remaining independent contractors. A good example of this is the way that Uber, as part of an effort to show that they wish to comply with AB5, experimented with letting drivers set their own fares to prove that they are, in fact, true independent contractors. It sounded good in theory, but in reality it quickly became a race to the bottom in which drivers competed to set the lowest fees to get any customers at all. 

Part of the issue was that Uber’s algorithm would prioritize matching passengers with drivers who set lower fares. Another problem was a lack of sufficient quality indicators that drivers could use to justify setting higher fees. 

What happened is that customers would unsurprisingly opt for drivers with the cheapest fares. Consequently, experienced drivers arguably offering better ride experiences therefore found themselves setting their fares as low as possible to make even a fraction of what they used to earn

Proposition 22 May Decide the Outcome 

None of this is to say that California should get its way, necessarily. Even if it does, unless we know what drivers truly and actually want, this wouldn’t solve the problem at its core.

Besides, it appears that what voters, not the courts, think about Proposition 22, may ultimately determine the outcome. But the same caveat applies to voters who are not themselves rideshare drivers — in that the biggest determinant should be what drivers want. Voters cannot reliably know what that is without more bias-free research.       

It may very well be the case that new research will reveal that the majority of drivers do, in fact, prefer to remain independent contractors. In that event, California’s courts would ideally take this into consideration and Uber and Lyft should by all means continue fighting if necessary. If the reverse turns out to be true, then that should give voters and the state of California the confidence to vote “no” on Proposition 22 and to enforce compliance with AB5, respectively. 

Hearing Straight From the Horse’s Mouth

Aside from research by objective third parties, it would also be helpful to hear more directly from rideshare drivers themselves. The Rideshare Guy, for example, is a popular blog started by a former Uber and Lyft driver whose stated goal is to educate his primarily rideshare driving audience. The site conducts a survey of drivers every year, and the results of the latest survey support the idea that most drivers wish to be independent contractors for the perceived flexibility. 

However, the survey results also show that drivers’ satisfaction levels have gone down, something that rideshare companies would be wise to consider (which we’ll get to in a moment). 

Then there is Rideshare Drivers United, an association of California rideshare drivers that is currently 12,000 members strong. They, on the other hand, support AB5 and voting “no” on Proposition 22. In other words, they do not want to be independent contractors. 

This disparity among drivers suggests that what we might discover with enough research is that drivers do not uniformly want something that can be easily classifiable in simple, binary terms and that we may need an unconventional approach. 

Uber CEO Dara Khosrowshahi himself has proposed something like this, calling for state governments to work together with Uber to come up with a third solution. If sincere, his idea is intriguing, but it still does not change the fact that the wants and needs of drivers should steer the conversation.

The Importance of Worker Satisfaction

Regardless of how this legal drama plays out, it will hopefully shed further light on the importance of treating workers the way they wish to be treated. 

This goes beyond the rideshare industry. The independent-contractor classification in general is one that is frequently abused. Further, when companies exploit independent contractors, it only hurts them in the long run even as they may benefit financially in the short run. 

Research shows that the type of dissatisfied workers at the greatest risk of leaving a company are precisely the type of drivers who were making less money under Uber’s set-your-own-fares experiment: hard working, high-achieving, and ambitious. These are the type of drivers who would feel that setting higher fares would be justified but who were pressured to set fares as low as possible due to Uber’s biased algorithms.       

A company’s perceived reputation also plays a big influence on whether workers choose to continue working for that company. Uber consistently communicates that it cares about its drivers and does everything it can for them. Such messaging may attract new drivers, but if the experience of working with the company does not live up to the messaging, then drivers may experience stages of disappointment resulting in higher turnover rates. 

Rather than slant research to support a preferred narrative, therefore, it would be in rideshare companies’ interests to fairly and objectively assess their drivers’ needs with the sincere goal of meeting those needs.

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