Upcoming Conference | 2022 Re-Wire Policy Conference, Dec 05, 2022 Learn More

Lyft, Uber cut a deal with Teamsters over driver pay, benefits, and protections

Gig-economy giants Lyft and Uber have cut a deal with the Teamsters Union over driver pay, benefits, and protections statewide. 

Rep. Liz Berry’s House Bill 2076 passed the House 55-42 on Wednesday after months of negotiations over the underlying deal. 

The measure leaves in place Seattle’s pre-existing regulatory scheme for the rideshare companies while establishing a statewide minimum elsewhere. Drivers also get paid sick leave, workers compensation, and a system for contesting deactivation by Lyft or Uber. 

Lyft and Uber avoid having the drivers formally classified as employees rather than independent contractors. That’s been a red line for the companies. The two companies and their allies in the gig economy spent a record $122 million on a California ballot initiative to roll back that state’s attempt to make drivers employees.

They also get a workable deal in a progressive state that might be replicable in other states where the companies face a similar dynamic: a major city led by progressives inclined toward heavy-handed regulation of their business.  

If the bill makes it through the Senate and across Gov. Jay Inslee’s desk, it would likely forestall a ballot measure on the issue in November. As we’ve noted, the companies have been paying consultants and stockpiling campaign cash in the Coalition for Independent Work in case the effort in the Legislature goes sideways.  

The potential for an initiative was something of a stick for the companies in the negotiation because they could likely have persuaded voters statewide to give them a better deal. Just a few days ago, they floated a poll indicating that ride-share drivers overwhelmingly favor their independent status, a message the companies used to great effect in California. However, an initiative campaign could have cost north of $20 million and significant political capital.

One unresolved wrinkle is the regulation of app-based delivery services Doordash and Postmates, which are part of that ballot committee but weren’t included in the HB2076 deal. The two companies are currently in negotiations with the labor group Working Washington over a regulatory scheme likely to come before the Seattle City Council this year. However, taking care of Lyft and Uber might have the effect of fracturing that coalition. 

The gig economy in general and Lyft in particular have been working to win friends and influence lawmakers in Olympia after their early years of brashly controversial approaches to government relations. Setting aside the more than $2 million sitting in the Coalition for Independent Work war chest, the company has spent more than $500,000 in recent years on political contributions to members of the Legislature and related political action committees. 

Your support matters.

Public service journalism is important today as ever. If you get something from our coverage, please consider making a donation to support our work. Thanks for reading our stuff.