Uber CEO Dara Khosrowshahi and Lyft co-founders Logan Green and John Zimmer lead companies that have been locked in fierce competition for years. But more and more, these executives find themselves sitting on the same side of the table because of growing frustration from drivers and labor activists.
The latest: Khosrowshahi, Green, and Zimmer penned a rare op-ed in Wednesday’s San Francisco Chronicle claiming they are willing to address driver concerns. “Our companies are no longer upstarts,” the letter says. “We are public companies that tens of millions of people rely on for mobility and for work. If there ever was a time for new policies, it’s now.”
The background: Drivers frustrated with declining rates and a lack of transparency in how those rates are calculated had their whale song in May when Uber filed its initial public offering. They held demonstrations around the world to call attention to their treatment and speak out about language in Uber’s IPO documents, which predicts driver pay could drop.
What’s more: There is also a debate over whether Uber and Lyft drivers should be classified as employees instead of independent contractors, which is their current designation. The California legislature is considering a bill that would raise the bar for workers to be considered independent contractors. The bill could have big implications for gig economy services.
What the execs say: Uber and Lyft’s leaders said classifying drivers as employees would be misguided in the op-ed. “First, most drivers prefer freedom and flexibility to the forced schedules and rigid hourly shifts of traditional employment; and second, many drivers are supplementing income from other work,” they wrote.
Their vision: Khosrowshahi, Green, and Zimmer want labor laws to be revised so that independent contractors can receive benefits without a traditional employer-employee relationship. They also called for a driver association to advocate on behalf of workers, though they have fought a Seattle ordinance that will allow Uber drivers to collectively bargain if it clears the courts.
Yes, but: This is also about protecting their businesses. It would cost Uber and Lyft dearly to bring drivers on as employees, as Uber acknowledged in its IPO documents. “Any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition,” Uber said in its IPO prospectus.