SEIU Is Trying to Cut Backroom Deal with Uber and Lyft in California

SEIU officials in California have been engaged in secret discussions with Uber and Lyft around a scheme to exempt the two tech giants from a groundbreaking new bill in California that would force the companies to hire their drivers as employees rather than exploit them as independent contractors.

SEIU, in exchange for backing the companies’ political play in the Capitol, would be designated as the companies’ official union-lite “association” for their independent-contractor drivers, according to articles in the Los Angeles Times, New York Times and other publications.

(Johana Bhuiyan, “Treat workers as employees? Uber, Lyft and others are scrambling for a compromise,” Los Angeles Times, June 23, 2019.  Noam Scheiber, “Debate Over Uber and Lyft Drivers’ Rights in California Has Split Labor,” New York Times, June 29, 2019.)

The news has been met with outrage by drivers. Check out this tweet from Rideshare Drivers United-LA:

 

We won't work with any union that's in talks with #Uber and #Lyft to accept money from them and limit our full rights as employees. We represent the direct voice of the drivers who want & deserve better. Collective bargaining and a seat at the table.@GavinNewsom should know this. https://t.co/Fiy3zbZpUr

— Rideshare Drivers United - LA (@_drivers_united) June 30, 2019

What’s causing SEIU officials to leap into bed with gig executives?

Opportunism on SEIU’s part. And desperation from the tech execs.

California’s legislature is poised to pass a bill that would require Uber, Lyft and other gig companies to hire their drivers as employees. This would finally give drivers the basic legal protections that come with employment status, including: minimum wage, sick leave, overtime pay, meal and rest breaks, unemployment insurance, disability insurance, workers’ compensation, parental leave, family leave and contributions to Social Security and Medicare.

The bill was triggered by a unanimous 2018 decision by the California Supreme Court known as the Dynamex decision.

To save money, Dynamex -- a same-day courier service -- converted all its employees to independent contractors. A former employee sued the company. The case ultimately landed in the state Supreme Court, which ruled that company executives had misclassified the workers as contractors. The court set up a new test to determine whether workers are independent contractors or employees.

Earlier this year, California Assemblymember Lorena Gonzalez introduced Assembly Bill 5 to put this new standard into California law. If it’s not in state law, workers’ only solution is to sue every time a company violates the Supreme Court’s new standard. AB 5 was approved by the Assembly by a vote of 59 to 15, and it’s now in the State Senate. It’s sponsored by the California Labor Federation.

The bill would affect 100,000 drivers at Uber and Lyft, as well as an estimated 1.9 million additional California workers who are currently misclassified as independent contractors.

Tech companies are going batsh*t crazy over AB 5.

If they can no longer exploit workers as independent contractors, their profits will decline. So they’re pulling out all the stops to try to defeat or gut the bill… including trying to cut backroom deals with unprincipled union officials at SEIU and the Teamsters. Here’s how the Los Angeles Times describes it:

In recent months, Uber, Lyft, DoorDash, Postmates and other companies have been in discussions with officials at two labor unions — including local chapters of the Teamsters and Service Employees International Union — over a possible legislative alternative to Assembly Bill 5, now working its way through the state Senate. The proposal, details of which are still in flux, would allow the firms to continue to treat workers as independent contractors while providing them some benefits and protections typically reserved for employees. (The California Labor Federation, which represents most of the state’s unions, remains committed to obtaining full employee status for on-demand workers.) At least two of the companies, Postmates and DoorDash, have also commissioned surveys to feel out how such a deal would play with Californians.

According to Vox, the deal would require the tech companies to pay the unions to “advocate for the drivers.” Sounds like a company union. (Alexia Fernández Campbell, “Secret meetings between Uber and labor unions are causing an uproar,” Vox, July 1, 2019.)

The New York Times cites two unnamed people who attended a meeting of SEIU officials during the past two weeks during which Alma Hernandez, the executive director of the SEIU California State Council, reportedly talked about SEIU’s discussions with the tech companies. It also cites David Huerta, president of the United Service Workers West, as saying he “attended internal and external meetings about gig workers with Ms. Hernández.”

 Drivers have also filed class-action lawsuits to recoup money and rights stolen by the gig giants. In March, Uber settled a class-action lawsuit with 13,600 Uber drivers, agreeing to pay them $20 million, but without changing their status as independent contractors.

Vox’s Alexia Fernández Campbell points out that the tech companies are not just exploiting workers, they’re also shifting billions of dollars of taxes onto the backs of regular people. She writes:

The state estimates it loses about $7 billion a year in payroll tax revenue due to worker misclassification that could be supporting schools, roads and other public services. And by avoiding unemployment insurance taxes and workers’ compensation premiums, businesses shift the burden to the state when workers get laid off, get sick or get injured on the job.

“These billion dollar companies can complain but we have to ask ourselves as taxpayers: Should we subsidize their business by subsidizing their workers?” said Assemblywoman Lorena Gonzalez, a former labor organizer from San Diego who is author of AB 5. “That’s what happens when you don’t adequately compensate workers.”

This is not the first time that SEIU’s top officials have been caught doing dirty deals with tech titans and gig giants. In 2017, SEIU President Emeritus Andy Stern began working as a highly paid consultant for tech businesses to help them pass a law in the New York state legislature so tech companies could continue to treat their workers as independent contractors. It’s unclear whether Stern continues today in that consultant role.

Andy Stern and David Rolf

Also in 2017, Stern co-authored a proposal with a right-wing D.C. political operative calling on the Republican-controlled U.S. Congress and White House to grant “waivers” to states to allow them to do an end-run around federal labor laws. The waivers would be a boon to tech companies, which are facing dozens of class-action action lawsuits from workers alleging they’re owed millions in back pay after being misclassified as “independent contractors.”

Stern’s proposal, entitled “How to Modernize Labor Law” and co-authored with Eli Lehrer (President of the right-wing “R Street Institute” in Washington DC), was published in National Affairs.

In 2018, David Rolf (then-President of SEIU Local 775 and a member of SEIU’s International Executive Board) signed an open letter with Uber CEO Dara Khosrowshahi and venture capitalist Nick Hanauer calling for the passage of Washington state legislation that reportedly would consign gig workers to a second-class status as independent contractors.

The uber-wealthy plutocrats atop tech companies want to keep sucking as many profits as they can from their workforce. The top three execs at Uber and Lyft have a combined worth of over $1 billion.

Garrett Camp -- a multi-billionaire “Tech tycoon” who co-founded Uber -- just paid a record-breaking $72.5 million for a brand-new estate in Beverly Hills, according to an article published yesterday in Variety.

Uber cofounder and billionaire Garrett Camp

 Camp’s purchase has sparked anger from drivers in Los Angeles. Here’s an excerpt from an article in the London Guardian published yesterday (Sam Levin, “Uber co-founder buys record-breaking LA mansion for $72.5m as drivers fight for wages,” The Guardian (London), July 2, 2019.):

“This is a perfect example of the 1% stealing from the rest of us,” Nicole Moore, a ride-share driver in Los Angeles, said of Camp’s $72.5m purchase. “Drivers are living in their cars. We’re fighting for fair wages. At least share that wealth with the people who have actually built your company.”

… “This guy is buying lavish houses with our money, our hard-earned money that they are unjustly taking from us,” added Karim Bayumi, another Los Angeles Uber driver and organizer. “It’s exploitation.”

Hey Mary Kay Henry and Jimmy Hoffa, Jr... Your thoughts? Will SEIU and Teamsters officials perform intimate love acts with these tech billionaires? Or defend exploited workers against greedy corporations?

Big Tech’s Purple Cheerleaders

SEIU’s Andy Stern and David “Mini Me” Rolf are facing more criticism for partnering with Uber executives.

Jay Youngdahl -- a civil rights attorney and journalist -- says Rolf and Stern have become “cheerleaders” and “circus barkers” for Uber and other tech firms pushing poverty jobs on millions of US workers. 

The companies, says Youngdahl, use “an 18th-century business model dressed up for the 21st century.” (Jay Youngdahl, “Poverty's 'Progressive' Cheerleaders,” East Bay Express, March 14, 2018.)

Even as Rolf and Stern appear to be hypnotized by the glare of their iPhones and the tech companies’ vast wealth, Youngdahl reminds us of the story of drivers like Douglas Schifter.

Last month, Schifter -- who worked for 30 years as a livery driver in New York -- shot himself to death in front of New York City Hall to protest the economic ruin brought on by Uber, Lyft and other companies. According to the New York Times, Schifter…

was now sometimes forced to work more than 100 hours a week to survive… He had lost his health insurance and accrued credit card debt… preferring, he said, to die in hope that his sacrifice would draw attention to what drivers, too often unable to feed their families now, were enduring.

(Ginia Bellafante, “A Driver’s Suicide Reveals the Dark Side of the Gig Economy,” New York Times, February 6, 2018.)

Here’s a recent segment from Democracy Now about Schifter and the impact of Uber and Lyft on drivers.

Youngdahl writes:

[H]onest analyses show that profits for gig economy companies come from not paying for employee health care, pension, and paid leave, as well as foregoing outlay for governmental safety net benefits such as social security, workers' compensation, and unemployment insurance.

To protect their cash flow and flawed business model, these new economy capitalists have assembled a group of "progressive" circus barkers to shape public opinion so the companies can continue, as one driver leader recently wrote, an 18th-century business model dressed up for the 21st century.

Schifter's post on Facebook at the end of his life

Led by former Obama and Clinton strategists, think tanks desperate for operating revenue, foundation-financed nonprofits, and a few past and present Service Employee International Union officials with wealthy benefactors, these companies have constructed a marketing campaign that puts Mad Men to shame. The cast of characters, preaching a rosy "Future of Work," appear in media outlets throughout the land. They have been described as a progressive "Brain Trust," by New Yorker writer Nathan Heller.

Apparently terrified of worker power and solidarity, they oppose traditional unionization and extol company-controlled worker organizations. They promise pie-in-the-sky future benefits and "freedom" and "flexibility." But they're unwilling to face what life is like today for these workers. The "freedom" they're extolling is, as Janis Joplin sang, "just another word for nothin' left to lose."

At least one official inside SEIU is critical of Rolf’s and Stern’s handiwork in support of Uber, the $48 billion startup. In additional comments, Hector Figueroa, the President of SEIU 32BJ in New York, told BuzzFeed:

This isn't just a matter of Washington state. Washington is opening the door for something we believe is harmful for workers. So we’re going to oppose it, even though a sister union is actively involved.

(Caroline O'Donovan, “Uber’s Latest Concession to Drivers Could Spell Trouble for Gig Workers,” BuzzFeed News, January 26, 2018.)

One day after Rolf recently co-signed a letter with Uber’s CEO Dara Khosrowshahi and a venture capitalist, Figueroa posted a statement on his union’s website that says in part:

“We… we don’t support the plans being pushed by Uber and other companies to classify workers as independent just to avoid the responsibilities that employers have to their employees under labor law. All workers, whether they are considered employees or self-employed, should have meaningful health and retirement benefits, paid leave and sick days and enough income to support themselves and their families. They should also have the right to bargain collectively with their employers... We are deeply suspect of Uber’s intentions given their track record of misclassifying, underpaying, harassing and exploiting workers and opposing worker organization and we will judge them and others by their actions, not their words.”

Figueroa and Rolf both serve on SEIU’s International Executive Board.

SEIU Joins Hands with Uber CEO and Tech Titans as "Gig" Workers Suffer

SEIU's Andy Stern with Honeywell CEO David Cote

We’ve seen it again and again: SEIU officials leaping into bed with CEOs to proclaim "maverick" partnerships that (you guessed it) toss workers under the bus.

Here's the latest.

SEIU’s Andy Stern, David Rolf, and Laphonza Butler are drawing fire from worker advocates for their recent deal with the CEOs of Uber, Lyft, Handy and other so-called "gig economy" companies.

The tech titans are using a classic scheme to boost their profits by ripping off workers.  How?

They misclassify their workers -- including Uber drivers and Handy maids -- as "independent contractors" rather than employees.  As such, the workers have no access to health insurance, vacation, holidays, retirement, and other benefits; no access to unemployment insurance and workers compensation; and no company contribution to Social Security and Medicare. And the workers are unprotected by most federal, state and local minimum wage laws and other labor protections. And they can’t form unions.

It's the same scam used by FedEx, trucking companies at ports, and other greedy companies.

In California, Uber drivers are suing their $62 billion company to be reclassified as employees and to collect millions of dollars in mileage reimbursement and tips, which the company has never paid to drivers. The suit could affect 160,000 workers.

SEIU officials -- rather than backing the workers -- decided to become BFFs with the CEOs of Uber, Lyft, Handy and other such corporations. Earlier this month, they co-signed a lame, milk-toast letter that fails to take these corporations to task for ripping off their workforces.

Instead, SEIU’s joint letter offers hollow platitudes and vague proclamations -- with no concrete commitments or funding from the corporations -- that are summed up in the following excerpt from the joint letter:

Everyone, regardless of employment classification, should have access to the option of an affordable safety net that supports them when they’re injured, sick, in need of professional growth, or when it’s time to retire.

Worse yet, SEIU's joint letter pointedly criticizes workers for suing their billion-dollar bosses for ripping them off. The letter states: "We believe these issues are best pursued through policy development, not litigation…" (emphasis added)

SEIU is the only union to sign the letter… which was also signed by Eli Lehrer, the President of "The R Street Institute," a right-wing think tank inspired by Milton Friedman and Frederick Hayek.  By the way, the R Street Institute is reportedly pushing for legislation to make it easier for companies to classify what their workers as "independent contractors."

SEIU's David Rolf

SEIU’s lame-ass sell-out of precarious workers is what prompted worker advocates to publish a recent critique entitled "When Labor Groups and Silicon Valley Capitalists Join Forces to ‘Disrupt’ Protections for Employees" (In These Times, December 4, 2015).

The authors -- Jay Youngdahl and Darwin Bondgraham -- include a quote from Shannon Liss-Riordan, a labor attorney who represents 160,000 Uber drivers in their class-action lawsuit against the company:  

I’m concerned seeing labor groups on there. … I’m wondering whether they’re fully informed as to what they’re putting their names on.

Unfortunately, cozying up to the boss is par for the course at SEIU. 

Readers will recall similar episodes such as Andy Stern’s dirty deals with Wal-Mart CEO Lee Scott; pension-slashing venture capitalist Gina Raimondo; Honeywell CEO David Cote; Andy’s billionaire patron Ron Perelman; and the anti-teacher Broad Foundation.