Alastair Grant/AP Photo
A member of the GMB union takes part in a gig economy workers protest outside the Royal Courts of Justice ahead of a legal hearing over employment rights in London, October 30, 2018.
Last week, Uber agreed to reclassify its 70,000 drivers in the United Kingdom as “workers.” The move, more acceptance than decision, comes on the heels of last month’s ruling by the U.K.’s highest court, which sided with a group of 35 drivers who alleged that Uber exercised excessive control over them, far beyond what could reasonably be expected for someone in self-employed status. The court upheld a prior ruling that those drivers could not credibly be seen as independent contractors.
Facing even more legal action from drivers, the company acquiesced. “The shift represents the most significant concession yet to the more traditional norms of employment law,” wrote the Financial Times of Uber’s reclassification decision. Despite a penchant for simply disregarding inconvenient local laws and judicial rulings, the company will now guarantee minimum-wage pay to drivers after expenses, grant paid vacation equivalent to 12 percent of drivers’ earnings, and make them eligible for a pension plan to which the company will contribute.
What Uber did not do, crucially, was withdraw from the United Kingdom. Facing the prospects of increased worker protections, pay, and benefits, Uber’s default position historically has been to threaten to leave regions entirely—from California, from Austria—in an attempt to blackmail regulators into submission. An email to the company asking if they were considering this course of action went unreturned.
The U.K. agreement is not perfect, nor does it conform with the court’s ruling entirely. Uber drivers will still not be paid for any time they’re not actively paired with a customer, which means that reclassification may not change drivers’ immediate take-home pay as much as they expect. But neither is it insignificant. The added benefits will make for a meaningful windfall for drivers. Bank of America estimates the company will have to put up an additional $500 million for its workers. “In places where Uber cannot avoid giving employment benefits to drivers, it is predicted to increase Uber’s costs up to 30 percent,” said Pinar Ozcan, professor of entrepreneurship and innovation at Oxford University’s Saïd Business School, to CNBC.
The U.K. is by far the most important European market for Uber, and London is by far the company’s most critical European city. The changes are considerable, especially when compared to how a similar showdown played out in California, over a series of court rulings and legislation compelling Uber to pay minimum wage and benefits to its drivers. Uber threatened to go on capital strike by exiting California altogether, a bluff that helped, along with a deluge of advertising and influence campaigning on a historically unforeseen scale, to see through the passage of Proposition 22.
Now, Uber drivers in California are grouped in a third category of laborer, neither employee nor independent contractor, and ineligible for most benefits and protections. The model is spreading like wildfire to Massachusetts, Illinois, New York, and Connecticut, in various guises.
That all began because California’s voters, legislators, and even many of its rideshare drivers got punked.
What’s important to note in all of this is the essential emptiness of the threats Uber has employed in service to bending state, local, and national governments and courts to its own agenda. Of course Uber was never going to exit the U.K., just as it was never going to exit California, a wealthy, car-heavy enclave with 40 million people where the company happens to be headquartered. There’s no way they could forgo that consumer base and survive.
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Similarly, the claims that they can’t survive while paying workers basic, legally mandated wage floors, and conferring upon them simple protections and benefits, don’t hold up either. Uber has not cratered or ceased to exist since its recognition of U.K. drivers as workers. Its path to profitability hasn’t even been consequentially altered—if the company were merely short the $500 million that these additional benefits are predicted to cost before being able to turn a profit, its investors would shout audibly with glee.
That a living wage or added worker protections would be a disastrous, existential burden for Uber is a well-rehearsed line from many of the country’s largest corporations, many of which are in far better financial shape than a ride-hailing service propped up by venture capital. This is exactly the line that Amazon has been using in its attempt to prevent its warehouse workers in Bessemer, Alabama, from forming a union, one of the mostly closely watched and hotly contested American union campaigns in years.
Amazon, too, has borrowed from Uber’s playbook on the threat of departure and disinvestment. In Lauren Gurley’s dispatch from Bessemer for Vice, she notes that some of the area’s union opponents are under the impression that Amazon will simply pack up and leave if the union is formed, leaving them all jobless and worse off. But Amazon, of course, would not strand a sizable and brand-new investment in a warehouse facility—the single largest private investment in Bessemer’s 131-year history, in fact—just because its workers want a little more on-the-job protection. That’s an almost indescribably minuscule cost for the extremely profitable, trillion-dollar firm. Moreover, if it wants to honor its long-stated customer commitment to rapid shipping in Alabama and the Southeast, Amazon cannot afford to desert any warehouse facility. Threats of abandonment have no force behind them whatsoever.
Amazon, too, has borrowed from Uber’s playbook on the threat of departure and disinvestment.
And again, we can look to Europe to see that the company’s claim that a unionized workforce would destroy its operations is not remotely grounded in fact. Amazon warehouses all over Europe are unionized, and the company’s services and operations work just fine. Germany is Amazon’s largest foreign market; its warehouses, both in the country and in neighboring Poland that serve the German market, have seen various, successful union actions. The workers just get a slightly larger percentage of the exorbitant profits. The same is true of Walmart and other virulently anti-union, exceedingly profitable mega-corporations. Their own unionized workplaces are testament to the emptiness of their threats.
These threats even find a not-too-distant cousin in Mitch McConnell’s attempted blackmail on the filibuster, where he claims he’ll unleash a political and legislative wrath never before seen if Democrats go through with majority rule. First of all, it’s hard to decipher how this would be any different than the current situation under the supermajority threshold that rewards obstructionism. Second, an environment where Democrats are willing to change the Senate rules to let the majority operate is surely one that would further change those rules if McConnell commits to further obstruction. And third, McConnell had every opportunity to kill the filibuster to pass the conservative agenda when Republicans controlled Washington, but its deep unpopularity confined him to only subverting Senate rules for what he really wanted: tax cuts and Supreme Court justices.
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What the moment calls for, then, is a calling of the collective bluff. Warehouse workers should not be bluffed into refusing a union; Senate Democrats should not be daunted by a blustery Mitch McConnell; and legislators, regulators, and labor leaders should certainly not be bluffed into striking a concessionary deal, as Connecticut is in the early stages of doing, with Uber and other companies that will not and cannot make good on their threats.
