Editor’s Note: My friend and fellow Red Sox fan Bill Gould wrote a piece on the Uber/Ride Share issue back when the spotlight was on the legislature and Assembly Bill 5. A crowded queue prevented us from running it then, but the outcome of the legislative resolution of the California Supreme Court Dynamex decision is still in doubt so here is Professor Gould’s perspective. 

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How Democrats, labor should react to grand bargain resulting from Dynamex decision

Uber, Lyft and the burgeoning ride-sharing industry are confronted with the 2018 California Supreme Court Dynamex ruling that will convert their drivers from independent contractors who possess no benefits and low wages into employees immediately covered by the nation’s panoply of labor laws.

The Legislature is considering AB 5, which would codify the Dynamex ruling. This has driven the industry to seek a legislative bailout from the Democratic supermajority and organized labor in Sacramento.

Ride-sharing companies had already convinced the Trump administration’s National Labor Relations Board that the drivers are entrepreneurs and thus exempt from federal labor’s promise of a right to organize and bargain collectively.

But the Dynamex ruling threatens their ticket to super profits. Ride-sharing companies fear the prospect of higher fares for the public and lower wages for the already disgruntled, sometimes demonstrating drivers. The companies require more control to assuage investors and the stock market.

Their proposed solution: The long-discussed and debated industry-wide portable benefits and a third classification that cuts across the existing employee-independent contractor demarcation line and which those companies say would benefit from portable benefits.

Aside from the influence from their backers’ enormous wealth, Uber and Lyft hold another card — the U.S. Supreme Court rulings that allow them to prohibit class action lawsuits (the major strength of workers who attempt to implement employment laws) through so-called individual arbitrations. This, they believe will permit them to negotiate a grand bargain for ride share and the gig economy.

The companies also hold another card — the false fear that they have been able to instill in many drivers that if they lose their role as contractors, they will lose the flexibility to work when they want. Countless labor law rulings are to the contrary.

Organized labor and Democrats should say yes and no to the grand bargain.

They should say yes to the idea of industry-wide benefits, if adequate, but no to the implicit acceptance of the drivers’ exclusion from the right to bargain and and band together.

California should enact a law similar to a still stalled Seattle ordinance, which establishes collective bargaining for drivers.

A Ninth Circuit Court of Appeals ruling has made it clear the states may legislate to promote or enforce agreements involving non/employees and their bosses that would otherwise violate antitrust law’s prohibition against agreements between business people on wages or prices. The same conservative panel of judges addressing the Seattle case said the ride-hailing labor law, like those involving agricultural labor, aren’t preempted by exclusive federal law.

The point here is that some representative process — call it collective bargaining or something different — must administer and formulate benefits so as to ensure the drivers and public that they, in the words of Alexander Hamilton, “are in the room where it happens”.

The Seattle process points the way. Judicial precedent allows California to act. But this leads to the most important point of all.

It is the parties, particularly the drivers themselves, who must decide what is best for them as they attempt to retain flexibility and place bread on the table. A mechanism ought to be established which, in their view is fair and adequate. Otherwise litigation, however flawed, should proceed under a Dynamex banner, however torn by the limitations of individual arbitration.

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First published via the Bay Area News Group