Front Burner - Uber and the perils of the gig economy

Episode Date: January 7, 2019

"The fact that these three judges really got this power imbalance between workers and this huge behemoth multi-national corporation...was just really breath-taking." Labour law professor and gig economy expert Veena Dubal talks about the significance of the Ontario Court of Appeal's decision to let a proposed class action lawsuit against Uber proceed, and how it fits into a larger picture of gig economy workers around the world trying to get recognized as employees.

Hey there, I'm David Common. If you're like me, there are things you love about living in the GTA and things that drive you absolutely crazy. Every day on This Is Toronto, we connect you to what matters most about life in the GTA, the news you gotta know, and the conversations your friends will be talking about. Whether you listen on a run through your neighbourhood or while sitting in the parking lot that is the 401, check out This Is Toronto, wherever you get your podcasts. This is a CBC Podcast. Hello, I'm Jamie Poisson. So there's a big fight involving the ride-hailing company Uber that's playing out in courts around the world right now.

Here in Canada, just last week, Ontario's highest court ruled that a group of Uber drivers can go ahead with a proposed class action lawsuit. At the centre of this lawsuit is a very simple question. Should Uber drivers be recognized as employees of the tech giant, with holidays and a minimum wage? Or are they self-employed contractors? Uber chiefs! Order just eat! Feel like your own boss, but they have so much control over you.

It's not even worth me going out because of gas, you know, expenses. Similar cases are also playing out in the UK and the United States. And the results of these cases can have implications on the way that the gig economy, which relies on temporary workers, works. More than 2 million Canadians, a huge number, are now part of this workforce. And it's growing really fast. Today on FrontBurner, we're talking to Veena Dubao,

a law professor based in Silicon Valley. She's an expert on gig economy workers and an advocate for their rights. This is evidence that the informal economy is now a growing part of the United States and in Canada and European work. Hi, Veena. Hi. I want to start with what happened here in Ontario. A court ruling that will now allow a proposed class action lawsuit against Uber to go ahead. What stands out to you most about this ruling?

So what is so important about this ruling is that it allows a judge to actually make a decision under Canadian law about whether or not these drivers are misclassified in Canada. And I should mention that this decision is from a higher court in Ontario, but Uber still has the ability to appeal this decision all the way up to the Supreme Court of Canada. That's right. And in the United States, we just haven't had the opportunity to have a fight like this in court because Uber has been super successful at getting their arbitration agreements validated by court. So basically, this court of appeals said this can move forward because the arbitration agreement that Uber has with its drivers is

unconscionable. Basically, what an arbitration agreement is, is it forces, it would have forced the drivers to adjudicate their complaints about misclassification outside of the Canadian legal system. They would have had to go through an international mediation process in the Netherlands. One interesting aspect of this ruling, and I do want to get later to some of the other cases that we're seeing in the US and the UK play out. But one interesting aspect, I was looking at the ruling today, is that the judges, this three-person panel of judges, dealt with power imbalances in their ruling. They said that this arbitration clause that you were just talking about takes advantage of a significant power disparity between Uber and its drivers. So for example, just to dispute something through

this arbitration process in the Netherlands, it would cost up to $14,500. What are your thoughts about that? You know, this is something that courts, other courts have sort of failed to recognize. Not only in the US, the Uber has to pay for arbitration, so courts haven't sort of made that argument. But they have said, well, even though drivers don't understand what arbitration is, even though drivers might not even know that they're signing on to a mandatory arbitration clause, even though this means that they can't enforce their rights, whatever, they signed it, that they can't enforce their rights, whatever, they signed it. Contract law says we have to hold them to it. Versus this decision looks at the reality on the ground. And so the fact that these three judges really sort of got the power imbalance between workers and this huge behemoth

multinational corporation, I think it was just really breathtaking. I want to talk a little bit more about the reality on the ground. What do we know about who a typical Uber driver is? Many, many Uber drivers are people who have been carved out of other types of work. So racial minorities, immigrants, women, people who need some sort of limited flexibility in their schedule to be able to earn a living. You know, I've talked to, I've done hundreds of interviews with drivers in the U.S. and drivers repeatedly have told me, like, look, if there was more stable work or if more stable work was accessible to me, I would absolutely do it. work was accessible to me, I would absolutely do it.

We want to let people know that Uber is not treating us fairly. It's costing me more money to work for Uber than it is making me money. You see this bait and switch. They promised the American dream, but the workers are waking up to the American nightmare and that's the reality of driving. You mentioned that you've done hundreds of interviews with drivers. Are there any stories, personal stories that stick out to you that you might be willing to share with us today? Oh my gosh, absolutely. I think of this particular story all the time. I sort of got to know this Syrian Iranian refugee. He was a carpenter in Iran. He fled religious persecution just, you know, maybe 10 years ago. He came here. He couldn't get the right licenses that he needed to work as a carpenter in the United States. And he ended up driving for Uber. And so I asked him, you know, what do you, Uber says that this work is so

flexible and that's why it's so great. What do you think about that? And he looked at me and he said, yeah, I get to sleep in my car, eat in my car and work in my car. It's really flexible, to sleep in my car, eat in my car, and work in my car. It's really flexible, sort of sarcastically. And this particular driver drove three hours up from the Central Valley to work in the San Francisco area. So he was, in effect, a migrant worker. And he showered at a 24-hour fitness. He slept in his car. And then he would travel back, live at home for a few days, hang out with his family and then come back to earn wages. And, you know, a few years ago, just like even in the 90s, we thought that the informal economy in North America and the global north and developed countries was shrinking. And this is evidence that the informal economy is now a growing part of the United States and in Canada and European work. This latest court ruling in Ontario, it means that this group of Uber drivers have cleared a hurdle in getting their case heard to try and classify themselves as employees as opposed

to temporary contractors or independent contractors. And as we mentioned, this is just one of many cases playing out globally. But there are two clear sides to this argument here. And I'm hoping that you can help me break both sides down. So you mentioned earlier that Uber talks about flexible hours. What is Uber, what's Uber's position here? You know, why do they think that their drivers should be classified as independent contractors? Uber's entire business model is based on this idea that they don't have to pay employees a minimum wage, they don't have to pay them overtime, they don't have to give them paid holidays. In the US, they don't have to provide workers' compensation or unemployment insurance.

And so their argument is that they do not control the driver enough to consider that driver an employee. Many of our drivers have moved from traditional jobs, and they've chosen to work with Uber because of that flexibility. jobs and they've chosen to work with Uber because of that flexibility. The fact that you can work literally whenever you want, that's the flexibility that the majority of Uber drivers are really looking for. In courts across the world, they've said, look, we're just a technology company. We just provide software to drivers and they do all the work. However they want to do it, they do it. They are, from Uber's perspective, you know, independent business people. We reached out to Uber for this story and a communications person explained to us that the drivers have the freedom to choose when they want to work.

Right. That is really, at this point, at the crux of their argument, because a lot of courts have said, give me a break. You're not a technology company. You're clearly in the business of transportation. And so the crux of their argument at this point is that, oh, drivers can work whenever they want to work. From the driver's perspective, however, so the drivers say, look, we are low wage workers. And although you say we can work whenever we want to work and that you don't direct or supervise us, you have so much control over our everyday lives. You set the price in the fair. We don't set the price in the fair. And you set a price in a fair that changes over periods of time. So we don't even necessarily know how much money we are going to make. So we can work hard and long and still not make the money that we expect it to make because

you unilaterally change the prices. I can go out at 2 a.m. and drive around for three hours, but I'm not going to make any money. And Uber knows that. Uber incentivizes us to work during certain times, and it is only if we work during those times that we are actually going to make any money. And so, in effect, drivers tell me, you know, we do have a shift. Well, I'd like to think that I'm an independent contractor, but we're being treated less than employees. I don't control the fare. If I take a different route other than the one I've been given, I'll be penalized. I'm performance managed through a rating

system. If I hit 4.4, I'm be penalised. I'm performance managed through a rating system. If I hit 4.4, I'm out of a job. It is true we are self-employed. It's not true to say that it is just a technology provider. See, what Uber wants to do is take its business model into the cloud, into the internet cloud, and avoid all the responsibilities on the ground. The objections to being treated as independent contractors, they seem to be playing out in courts now all over the world. And can you give me a broad overview of some of the most notable cases, in addition to this one in Ontario, that are sort of winding their way through courts? Sure. So I think the clearest and best reasoned answer in the employment context is from the UK, where the Employment Tribunal held that drivers were workers employed by Uber's UK subsidiary. And in that particular case, drivers were found by an appellate court to be eligible for minimum wage protections and paid holidays.

Fantastic result for us. And I hope that Uber will now respect the judgment and obey employment laws in this country and ensure that every driver is paid minimum wage for every hour that they're logged into the platform and get holiday pay. That was, I think, sort of the biggest, most clearest ruling that we have internationally. The labor commissioner in California has decided many individual cases in favor of employment status for unemployment insurance purposes. The same is true in New York. In that case, the appeals board actually held that drivers were in the state eligible for unemployment insurance purposes. So in various states across the United States, this is also true that drivers have been found to be eligible for certain individual rights, but we haven't had the kind of broad decision that we have

in the UK, where the appellate court made the decision, and so it's enforceable across the country. And is that being enforced in the UK right now? Or is this a decision that could still be appealed to a higher court in the UK? It was appealed to the higher court and the court rejected the appeal. And so this decision stands in the UK. How it's going to be enforced is another matter. So this has been the problem historically, is that you have a decision on the books, and then oftentimes, instead of just abiding by the decision and giving their workers a minimum wage, a company that's misclassifying their workers will change their business model as per the decision, such that they look more like they are actually using independent contractor labor.

We've talked about a few cases where these drivers have been successful or are having some favorable rulings, like in the UK and here in Ontario. But what happens if Uber starts to win some of these cases as well? What happens if Uber starts to win some of these cases as well? I mean, I know there is one at the federal appeal, a federal appeal ruling in the United States, which said that the arbitration clause stands and that it prohibited a class action from going forward. States. And this is part of what makes this Canadian decision so incredibly important. In the United States, we're not even getting to hear whether or not Uber drivers are legally employees because they're keeping all of these cases out of public hearings and having them held in private arbitration proceedings. So because of the, because they haven't, Uber has been so successful at keeping these cases out of court in the U.S., both through arbitration agreements and through settlements, what they're doing is avoiding the judicial process and going through the legislative process. So in the U.S., in order to, even when they've had a good ruling, like in Alaska, for example, the Workers' Compensation Board found that Uber drivers

were employees for the purposes of workers' compensation, which is really important, because when a driver gets into an accident, he needs to be able to, you know, survive. He needs to be able to be making some money. Well, Uber got mad about that. And so they lobbied the state legislature to pass a law essentially overturning that ruling, saying by law, by the statute in the state, Uber drivers are independent contractors for purposes of workers' compensation and unemployment insurance. I want to zoom out a little bit because I know we've been talking about Uber a lot today, but this issue, this issue of whether people should be classified as independent contractors or employees,

it's not just relegated to companies like Uber and Lyft. Here in Canada, we've seen accusations of people working for banks through temp agencies and as private school teachers have been misclassified as independent contractors. Where do you see this issue going? I think that this is certainly a growing issue, misclassification. And it, you know, it certainly didn't start with Uber, Lyft and the larger what we consider the technologically enabled gig economy. In the U.S., misclassification has been a growing problem since the 1970s. growing problem since the 1970s. You know, it's not clear to me that these companies could not be profitable if they did the right thing here and made sure that workers were making a minimum wage and getting overtime compensation. They would not be as profitable. Maybe the people at the top

wouldn't be making as much money as they're making. But certainly it would, it's not at all clear that they would go under or go out of business altogether. You mentioned that earlier that governments or, you know, legislative bodies can pass laws and that they have in the United States sort of rolling back rights around contract workers. Is what we're seeing now the same as what we've always seen? Or, you know, do you think that we need a new legislative regime to address what's happening today? I don't think that what we're seeing today is any different than what we've been seeing for the last 40 years of corporations evading responsibility by misclassifying their workers.

I think that there is this, again, this sort of shiny mirage of technology that makes this seem different. But I think it's the same. I don't think we need a third category of worker. I don't think that there needs to be a whole new regime of portable benefits. I think that the laws on the books apply to these workers. And if we could get them enforced by willing political entities, then these workers and the economy would be in a better place. We'd have more secure workers. We'd have a more secure middle class. There'd be less social and economic inequality.

And there just has to be political and legal will. Veena, thank you so much. Thank you. Thanks for talking to me. As I mentioned in my conversation with VNAT, we reached out to Uber for comment on last week's ruling in Ontario. They sent us the following statement. We are proud to offer a flexible earning opportunity to tens of thousands of drivers throughout Ontario. We are reviewing the decision. That's it for today. I'm Jamie Poisson.

Thanks for listening to FrontBurner. For more CBC Podcasts, go to cbc.ca slash podcasts. It's 2011 and the Arab Spring is raging. A lesbian activist in Syria starts a blog. She names it Gay Girl in Damascus. Am I crazy? Maybe. As her profile grows, so does the danger. The object of the email was, please read this while sitting down. It's like a genie came out of the bottle and you can't put it back.

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