Supporters of California’s AB-5 circle the Capitol during a rally in Sacramento on Wednesday. The legislation would require companies like Uber and Lyft to treat their drivers as employees.
On Wednesday, a caravan of Lyft and Uber drivers, some 200 in total, arrived on the steps of the state capitol building in Sacramento. It marked the most recent stop in a multiday demonstration that started Tuesday, as drivers have traversed a route from Los Angeles to Uber’s headquarters in San Francisco, then on to the capitol, all in support of AB-5, a bill currently under consideration in the California State Senate.
If passed, that bill would reclassify Uber and Lyft drivers as employees, rather than independent contractors, a decision that could have profound and lasting consequences for both drivers and ridesharing companies themselves, along with numerous other companies that use freelancers or independent contractors. For the 220,000 Uber and Lyft drivers in the state, some of whom have been shown to make far less than minimum wage and all of whom are without benefits, reclassification as employees could result in significant increases in pay; for the ridesharing companies themselves, an increased cost of labor would make things even more difficult as they struggle to turn anything resembling a profit even currently. The decision could send shock waves not just through Silicon Valley, but through the gig economy broadly.
Drivers aren’t the only ones taking a keen interest in the bill. It’s quickly become a political litmus test for Democrats at the national level. And it’s fracturing the Democratic Party along battle lines, with Obama-era Democrats lining up behind Uber and Lyft while the presidential candidates and recently elected Democrats stump on behalf of AB-5.
The strange, fractious coalitions that have emerged tell the story of the embattled soul of the Democratic Party in miniature. On one side, the presidential candidates have marshaled their support of the bill, which is being backed by SEIU, a powerful and important labor union whose endorsement many are courting. Support from Elizabeth Warren, who proclaimed that “all Democrats need to stand up and say, without hedging, that we support AB 5 and back full employee status for gig workers,” and Bernie Sanders, who introduced a comparable proposal at the federal level and has endorsed AB-5 unequivocally, come as no surprise.
But other centrist candidates with weaker labor bona fides have also come out in support of it. Pete Buttigieg turned out at Uber’s headquarters on Market Street in San Francisco to join the caravan of protesters as they demonstrated on Tuesday. And Kamala Harris (somewhat tepidly) voiced her support as well, telling Vice News through a spokesperson that she “believes we need to go even further to bolster worker protections and benefits and elevate the voice of workers.” Beto O’Rourke has said he’s behind it too.
Given that, one would think that the Democratic Party was unanimous in its backing of the bill, which, in a state where Dems have a two-thirds majority in the state legislature, should make it a slam dunk. But that’s far from certain, given that the other side is also staffed with Democrats, many of whom are Obama-era stalwarts.
Looking down the ranks of the mounting opposition to the bill, members of the former Obama cabinet are well represented. Tony West, who served for five and a half years in the Obama Department of Justice and was once its third-ranking member, is now the chief legal officer at Uber. He also happens to be married to Maya Harris, who, you guessed it, is Kamala’s sister.
That’s not all. Valerie Jarrett, who served eight years as a senior adviser to Obama (the role now held by Jared Kushner), has worked in Silicon Valley since leaving the administration. Promptly after leaving the White House in 2017, she accepted a position on the board of Lyft. And David Plouffe, Obama’s 2008 campaign manager, himself a senior adviser to the president from 2011 to 2013, served as an executive at Uber from 2014 to 2017.
Meanwhile, Barbara Boxer, the former U.S. senator from California, whom Barack Obama campaigned on behalf of in 2010, has been hired by Lyft as a special adviser, vocalizing her opposition to AB-5 in an op-ed in the San Francisco Chronicle earlier this week.
It should come as no surprise then that Joe Biden, whose chief credential is having been in the room with Obama for eight years, has refused to weigh in on AB-5, as it’s split the Democratic Party into two camps that his campaign is predicated on straddling.
One lingering question is where Governor Gavin Newsom, who has tried to stay out of the AB-5 fight, will come down if the bill reaches his desk. He has talked about “a new and modern compact” for the state’s workers, but ties to Silicon Valley, an ATM for ambitious politicians in California, have made him hesitate. Newsom recently disinvited the head of the state building trades, Robbie Hunter, for an appointment on a Future of Work Commission he’s assembling. Hunter is a vocal supporter of AB-5.
The tumult over AB-5 paints a vivid picture of the Obama-era Democratic Party and the stark differences being seen in the new crop of Democratic figureheads. Democrats during the Obama years were criticized for their coziness with Silicon Valley; indeed, the revolving door between the Obama administration and companies like Google, Facebook, and the aforementioned ridesharing companies was robust throughout his two terms, while donations from the Valley poured in. Now, these deep-pocketed tech firms are calling in the support they paid for.
But the post-Obama Democrats aren’t nearly as smitten with Silicon Valley, and have articulated a set of labor policies notably to the left of his administration. The bill has exposed the ongoing identity crisis for Democrats as they search to find their political footing in the post-Obama years. The widespread support from the presidential candidates shows the party may indeed have moved meaningfully to the left, but it will have to continue to contend with Obama holdovers who have proven hesitant to do the same.
It’s likely that the fate of AB-5 will go right down to the wire: The legislative session ends on September 13, and it would be a surprise to see a resolution before that. It’s currently held up in the senate as business groups rush to carve out exceptions for themselves. But with pressure mounting from the Democrats nationally, the fate of gig economy workers will tell us if the baton has indeed been passed to a new generation of Democratic politicians, or if Obama-era operatives still reign supreme.