Uber, Lyft, Instacart, DoorDash form coalition in Washington state to ‘protect driver independence’

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(Uber Photo)

Five evenings a week, sometimes more, Carmen Figueroa gets into her car, signs into her GrubHub account and sets out for a night of deliveries.

She averages three-to-four deliveries an hour and five or six hours of work each night. She made about $570 a week in January, which was a jump from the $530 a week earnings December brought.

But that’s before taxes, car repairs, gas and insurance. “It’s not a living wage,” said Figueroa, 47, of Shoreline, Wash. “It’s a surviving wage.”

This is why she gets steamed when she sees the so-called gig economy companies spend tens of millions of dollars to thwart state and local regulations which seek to mandate minimum pay and workplace standards for the largely part-time contractors who drive the cars and drop the dinners at front doors.

“It’s not like I’m getting rich,” she said. “But they are.”

This employee-vs.-contractor or hourly-vs.-gig fight, which has been playing out in Seattle, California, Massachusetts and elsewhere, appears to be headed this year to Washington state.

Some of the biggest players in the state’s gig economy – Uber, Lyft, Instacart and DoorDash — have formed an industry group called Washington Coalition for Independent Work which appears to looking to the initiative process or legislation help curb the regulation of their businesses.

Lyft, which recently put $2 million into funding the group, believes strongly in the existing contractor model. Mark Funk, spokesman for the WCIW, says it’s not only better for gig workers, it’s also what they want. He added that the coalition has made no decisions specifically about initiatives or legislation.

“We’re still determining what the final vehicle will be,” he said. “The committee is committed to preserving all options for achieving policies that protect driver independence and flexibility while advancing driver benefits.”

First reported by politics newsletter The Washington Observer, the newly formed group has hired lobbyists and political fixers to put the brakes on regulation and minimum-wage requirements of their contractor-based employment models.

Inside a Lyft ride in Seattle. (GeekWire Photo / Kurt Schlosser)

Generally in Washington state, independent contractors are considered to be self-employed. Businesses that hire them therefore owe no employment taxes. Contractors themselves pay the taxes, which makes it cheaper for employers. Additionally, there generally are fewer worker wage protections such a minimum wage or overtime.

This contractor classification of rideshare and delivery drivers has led to spectacularly expensive political and legal fights throughout the country between labor activists and the companies that hire workers for app-based jobs.

In California two years ago, Uber, Lyft, Instacart, DoorDash and Postmates spent a combined $224 million to secure passage of Proposition 22, a successful statewide ballot measure to create rules that specifically allowed app-based companies to hire workers only as independent contractors. (Prop. 22 remains tied up in court.)

Currently in Massachusetts, Lyft has spent $14.4 million toward a planned November ballot measure to classify gig drivers as contractors, much like the California initiative.

In September 2020, Seattle did just the opposite, establishing a $16.39 minimum wage standard specifically for Uber and Lyft drivers after a unanimous city council vote. The law required rideshare companies to pay drivers at least $0.56 per minute when there is a passenger in the vehicle as well as a per-mile rate to cover expenses.

Historically, gig companies have defended the use of contractors by pointing out that their workers get paid for the hours they work — with no minimums — and have the flexibility to work only when they want to.

“Research has consistently shown that drivers overwhelmingly say they want to maintain their independence while having access to key benefits and protections,” Funk said.

Many gig employment delivery companies, ranging from food to package deliveries, boomed during the pandemic as restaurant closures and fear of COVID-19 infections prompted online ordering to spike. But the added business also brought added scrutiny. Labor activists have long complained that rideshare and delivery companies don’t provide fair, adequate and consistent wages to their workers.

In Seattle, the labor activists won the day two years ago in regard to Uber and Lyft. But similar efforts to expand those protections and wage guarantees to additional gig workers across the state is what the gig industry coalition wants to stop, political observers say.

“The impetus of this activity,” wrote veteran politics reporter Paul Queary in the Observer, “is the looming specter of the #PayUp movement aimed at app-based delivery services that bring restaurant food, groceries and other goods directly to customers.”

The WCIW lists executives with Uber and Instacart on its board of directors, according to state records. State campaign filings indicate much of the money initially has gone to attorneys at Seattle’s Davis Wright Tremaine firm, potentially to draft an initiative.

Washington Wire reported that Uber, Instacart and DoorDash have pledged $200,000 each to the effort.

The union-backed #PayUp effort, currently in the form of an online petition, seeks to pressure public officials into requiring gig employers to pay a minimum of $15 an hour for every hour worked while requiring that tips are in addition to hourly pay — and cannot used as an offset to that wage — in addition to better transparency on prospective trip costs.

Sage Wilson, a spokesman for Working Washington which is backing the petition, said other workers are paid for time spent on the job, why not these contractors too?

“I appreciate that companies don’t want to pay people more than they do now,” he said. “But when you start calculating expenses and time spent on these delivery jobs, it can get as low as $2 an hour.”

And it isn’t just hourly wages #PayUp is fighting for, he said. Drivers have long complained that the apps are misleading about the time each trip will likely take, which doesn’t allow drivers to calculate if a trip is worth it. “None of the companies provide good information on a consistent basis,” he said.

Figueroa, who is disabled, said she “doesn’t have other options for work.” She said all the gig workers want is their fair share from the companies, nothing more.

“They’ve made millions off my labor,” she said. “I would like a piece of the pie I helped produce. Just a small piece.”



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