It was about fundamental issues: Are the drivers of Uber or Lyft, the food delivery service Doordash and many other similar platforms self-employed? Or shouldn’t they actually be employees? In California, the home of many of these companies, the matter has now been decided in the final instance. The employees are still considered self-employed, which means they miss out on many of the benefits they would be entitled to as employees.
The US Supreme Court declared the so-called Proposition 22 to be legal, which means that the employees are still considered self-employed. Proposition 22, a legislative initiative, was passed in the 2020 election in California with 59 percent approval. According to it, the platform employees are considered self-employed, but receive some benefits. For example, they receive a 20 percent premium on the local minimum wage for every hour driven, compensation for injuries sustained at work, and a fixed amount of money for health insurance.
The initiative for this proposal was driven by the companies with hundreds of millions of dollars; it was the best-funded in the country’s history. For Uber and Lyft, a lot was at stake, perhaps even everything. After all, their business model is based on being able to rely on an army of casual workers. This gives them flexibility on the one hand and saves costs on the other.
While the companies rejoiced at the ruling, opponents of Proposal 22 were angry. Union official Lorena Gonzalez, president of the California Federation of Labor Unions, said in a statement published online with: “We are deeply disappointed that the Supreme Court has allowed tech companies to buy their way out of basic labor rights, even though Proposition 22 is not consistent with the nation’s constitution.” The companies have “turned our social contract on its head, requiring employees and the public to bear the risk of this work while profiting.”
In many places in Europe, the situation is viewed differently. Britain’s highest court, for example, classified Uber drivers as bogus self-employed. In Germany, private individuals are also no longer allowed to offer taxi services with their own cars. They must be employed by a company and have a passenger transport license.
Many delivery services also work at least partially with self-employed people. They are under great pressure to get food or grocery deliveries to customers by bike or e-bike in the hustle and bustle of city traffic as quickly as the platforms require. However, with some, such as Lieferando, the drivers are employed with all the associated services, and since 2021 also on a permanent basis.