The state of California is set to pounce, so—big surprise!—Uber is playing Silicon Valley’s favorite get out of jail card: the “platform defense.” As in, “Judge, I couldn’t have committed the crime, I was a platform at the time.”
In the process, however, Uber may have helped energize critics who insist that Big Tech companies be held to account for their toxic negligence.
Quick backstory: California’s legislature this week passed, and Governor Gavin Newsom is expected to sign, a landmark bill designed to protect, among others, Uber and Lyft drivers—workers who punch the clock every day for employers, but are nonetheless treated as independent contractors. You know, as if the drivers are just a bunch of free agents who pick up customers as part of passenger-moving business plan they drew up and have begun executing.
The measure, called AB5, would instead require that a company treat its workers as employees if they exert control over how they perform their tasks or if their work is part of the company’s regular business. (And they certainly do.) The idea is to distinguish between workers who make the company tick and workers who are genuinely independent and are genuinely contracted to do sideline work.
The change in status mandated by the law would mean that the drivers—Uber and Lyft employ about 220,000 in California alone—be eligible for unemployment insurance and family leave, earn minimum wage and overtime, and have bargaining rights. By one estimate, Uber would need to spend $500 million to comply with the new law.
In the face of such an attention-focusing cost estimate, Uber’s top lawyer, Tony West, proffered an ingenious defense: The company’s drivers aren’t employees, even under the proposed new law, because Uber’s main business isn’t driving people around. The company, he told reporters on Wednesday, “is serving as a technology platform for several different types of digital marketplaces,” (Uber also offers food and freight delivery, along with rental bicycles and scooters) thus the whole ride-hailing project would fall “outside the course of Uber’s usual business,” as the law stipulates.
This peculiar definition of Uber’s business becomes important because the law was written to permit companies to hire genuine independent contractors—like the people who come by for a couple of days to paint the bathrooms a new color. Or, um, freelance journalists, who were among those getting exemptions.
West took to Twitter to challenge reporters who interpreted his claim to mean that Uber was preparing not to comply with the law, should the governor sign it. To the New York Times, whose headline read “Uber Says It Is Not Subject to California Gig-Worker Law,” he replied: “This is completely wrong. @Uber will absolutely comply with the law—but the law does not ‘require contract workers to be reclassified as employees.’ I made that clear on a call today with your reporters.” Uber is a platform company, not a ride-hailing company—that’s their story and they’re sticking with it.
In reply to West, a New York Times reporter, Noam Schieber, posted on Twitter a snippet of dialogue from a New York court case in which an Uber lawyer made this argument before a judge.
Judge: How would Uber generate revenue through this app we’ve been discussing without the platform drivers?
Uber: Right. So, you know the—the riders are the ones who need the drivers. They are the ones asking for the service; we are the marketplace between that. Would it be ideal for us if there were no rides and no drivers? No. But we are the marketplace—and we think that we can create a balance between those two things.
Judge: But if you have users, people who request rides, and no drivers, how would that work?