Uber and Lyft Are Poised to Crush Gig Workers Yet Again

In New York, gig work companies like Lyft and Uber are close to winning new legislation that will cement gig workers’ independent contractor status — with help from the state Democrats.

Uber and Lyft are negotiating legislation with New York politicians and labor leaders to codify the nonemployee status of app-based ride hailing and delivery companies drivers. (Paul Hanaoka / Unsplash)

Lyft, Uber, and other allied gig work companies are reportedly nearing a deal with New York state legislators and labor leaders that would allow tech giants to continue classifying their workers as independent contractors rather than employees, and would prohibit newly unionized workers from “any picketing, strikes, slow downs, or boycotts,” according to leaked language of the state bill.

The potential legislation comes as companies led by Lyft and Uber have engaged in a multi-year, multi-million-dollar political influence campaign in the state and cultivated deep ties to New York Democrats. Their efforts could lead to a radical reshaping of labor relations in a state that has long been a labor stronghold.

If the bill leaked last week passes into law in its current form, the development would be a landmark victory for gig work companies. While the firms failed to secure a similar compromise in Connecticut, they spent $200 million to pass a 2020 California ballot initiative denying employee status to gig workers in the state after labor negotiations broke down there.

Details about the deal Uber and Lyft are negotiating with New York politicians and labor leaders were obtained last Friday by Labor Notes and Bloomberg. While the pact would allow gig workers to vote to form unions and collectively bargain, it would codify the nonemployee status of app-based ride hailing and delivery companies drivers. It would also preempt local laws — like New York City’s — that set minimum wages and require companies to pay drivers for time they are waiting for fares.

Gig work companies are willing to invest heavily in this fight because classifying their workers as independent contractors — which foists the costs of buying and maintaining cars and other necessary equipment onto workers in addition to denying them a minimum wage, health care, and other basic workplace rights — is critical to their corporate model.

Democratic state senator Jessica Ramos, who chairs the senate labor committee, came out strongly against the deal on Friday, saying that it would legitimize company-dominated unions and undermine the Protecting the Right to Organize (PRO) Act, a federal bill that has passed the US House of Representatives that would recognize a more expansive set of rights for gig company workers.

“I cannot support legislation crafted without uncompromised worker voices at the table and I will not stand aside while billion-dollars corporations try to legislate the lives of immigrant workers, my neighbors,” Ramos said in a statement.


A Million-Dollar Election Campaign

Uber and Lyft spent a combined $1.1 million to influence New York elections in 2020, the bulk of which went to ads backing Democratic candidates for the state Senate. The money came through a pair of independent expenditure committees, or super PACs, that can pour unlimited sums of corporate money into state and local elections: New Yorkers for Independent Work, registered by Lyft head of external affairs Jordan Markwith, and New Yorkers for Flexible Work, registered by Uber director of public policy Josh Gold.

The company’s efforts in New York have focused on buying favor with the state’s Democratic Party, which controls both houses of the state legislature. Even though Democrats are traditionally more amenable to workers rights than Republicans, the New York party under Gov. Andrew Cuomo has displayed a decidedly pro-corporate bent.

New Yorkers for Independent Work, which was funded by two Lyft loans totaling more than $1.2 million, did the bulk of the outside spending.

In the Democratic primary, Lyft’s super PAC spent $86,000 on digital ads and $127,000 on mailers supporting six incumbent assembly members, all but one of whom won their primaries. In the general election, Lyft spent $774,640 through its super PAC on ads and mailers supporting five Democratic state senate candidates, three of whom won their elections.

Lyft’s spending appeared targeted at maintaining a Democratic majority in the state senate as billionaire Ronald Lauder and New York police groups attempted to flip control of the state house back to Republicans. Lyft even paid to boost progressive, union-backed Democrats presumably more likely to back protections for gig economy workers, underscoring the firm’s apparent view of the Democratic Party as a necessary collaborator in blocking workers’ rights.

Uber spent far less on the 2020 elections than Lyft, spending $105,000 for streaming ads on Spotify and “telephone and data services” backing six incumbent state assembly candidates facing primary challenges, most of whom lost their races.

Beyond their Super PACs, Uber and Lyft have spent a combined $12.1 million on traditional lobbying in New York from 2017 through April 2021, mostly through firms with close ties to the Democratic Party establishment.

Deep Democratic Ties

Uber and Lyft have also hired staff with deep ties to New York Democrats.

Matthew Wing, Uber’s head of work communications, is a former communications director and press secretary for Cuomo and is married to Melissa DeRosa, Cuomo’s top aide. Josh Gold, the Uber lobbyist named as the control person on Uber’s super PAC, is a former political director for the Hotel Trades Council and manager of New York City mayor Bill De Blasio’s universal pre-kindergarten campaign.

What’s more, the companies have spent tens of millions of dollars retaining lobbying firms and launching front groups with heavy Democratic Party connections.

That includes Mercury Public Affairs, which ran Lyft’s super PAC, New Yorkers for Independent Work.

Charlie King, Mercury’s New York cochair, worked under Cuomo at the Department of Housing and Urban Development (HUD), ran as Cuomo’s running mate in 2002, and advised Cuomo’s 2014 reelection campaign. Morris Reid, a partner at Mercury, was also a senior aide to Cuomo at HUD. Another Mercury partner, Michael McKeon, is the executive director of Republicans for Andrew Cuomo. Mercury also ran Lyft’s New Yorkers for Independent Work super PAC in the 2020 election.

Uber’s super PAC, New Yorkers for Flexible Work, was run by Red Horse Strategies, which is closely affiliated with the Democratic Party and progressive political campaigns. Red Horse Strategies previously worked with the Long Island Law Enforcement Foundation, a super PAC affiliated with the Suffolk County police union. The firm has also worked in the past for 32BJ, one of the unions at the center of the fight to win employment status for gig company workers in New York.

Patrick Jenkins, another Uber lobbyist, is a close friend and the former college roommate of New York state assembly speaker Carl Heastie. While lobbying on behalf of Uber and other corporate clients, Jenkins has also engaged in political consulting work for Heastie’s campaign and political action committee.

In December 2019, Uber and Lyft launched Flexible Work for New York, a front group seeking “to protect New Yorkers’ ability to maintain flexible work hours that fit their schedules and support their families,” to create the appearance of grassroots support for their agenda.

In its registration documents, Flexible Work for New York indicated that it is lobbying on behalf of TechNet, a lobbying group representing many big technology companies, including Uber, Lyft, and DoorDash as well as other major gig work firms like GrubHub, Postmates, Seamless, and TaskRabbit. The coalition listed its address as Technet’s office in Washington, DC.

Flexible Work for New York was initially run by the public relations and lobbying firm SKDK (formerly SKDKnickerbocker), which also disclosed lobbying on behalf of the group “on a pro bono basis.” SKDK had previously disclosed pro bono lobbying for both Lyft and Uber in 2018.

SKDK is owned by the Stagwell Group, a conglomerate founded by Mark Penn, a close advisor to Bill and Hillary Clinton. SKDK partner Josh Isay is a former chief of staff to Senate Majority Leader Chuck Schumer. Former partner Jennifer Cunningham, who has lobbied for both Uber and Lyft in the past, is a long-time friend and political advisor to Cuomo. Anita Dunn, a partner at SKDK, was a senior advisor and communications director for former president Barack Obama’s campaigns and was a top strategist with “effective control over” President Joe Biden’s 2020 campaign. Dunn is now a temporary senior advisor in the Biden White House.

In December 2020, Flexible Work for New York was rebranded as the New York Coalition for Independent Work (NYCIW) and relaunched under the control of Mercury Public Affairs, the party-affiliated strategy firm that also ran Lyft’s super PAC.

Under both its names, the Uber- and Lyft-backed front group employed similar tactics to those used by gig economy employers in their successful $200 million campaign to pass Proposition 22, the 2020 California ballot initiative overturning a law granting employment status to gig workers in that state.

During the Prop. 22 campaign, gig employers paid the president of the California chapter of the National Association for the Advancement of Colored People to speak out in favor of the initiative. Similarly, Flexible Work for New York enlisted religious leaders from across the state to pressure legislators not to grant labor protections to gig workers.

Further, when the “launch” of the rebranded NYCIW was announced in December 2020, the nonprofit Arc of Justice, Inc. was named as a “founding member” of the coalition and its director, Rev. Kirsten Foy, was quoted in the press release. Foy is a protégé of Rev. Al Sharpton and works as the northeast regional director of Sharpton’s National Action Network, which is also named as a coalition member on the NYCIW website.

Foy has been an outspoken advocate for the gig company position on labor rights, giving interviews and publishing opinion pieces on the matter. On Arc of Justice’s website, both Uber and Mercury Public Affairs are listed as “benefactors” of the organization.