Last month, Uber and a major Canadian union, the United Food and Commercial Workers, announced an unusual deal. They billed it as a historic move for Uber’s more than 100,000 drivers and delivery couriers in this country. Is it?
First off, Uber workers didn’t suddenly become unionized. Not exactly. Instead, if they have a dispute with Uber, they are entitled to free help from UFCW. In addition, Uber and UFCW said they will “press” provincial governments to “enact reforms that provide new benefits” across the industry.
And that’s it.
Is this is an important step forward for ride-share drivers and others in the gig economy, or an off-ramp to a dead end?
It’s unclear why Uber and UFCW have to lobby government to provide new benefits to drivers that the company could introduce on its own. And this agreement appears to be a reversal from a year ago. Last March, Uber proposed governments “require” app companies that rely on gig workers to establish a benefits fund that could include things such as dental care or retirement savings. That sounds a lot like what Uber and UFCW are now co-operating to pitch. But last year UFCW called the idea “Uber’s latest tactic to circumvent” labour laws. UFCW now says its Uber deal is an “important first step” for workers.
The Uber-UFCW deal is the latest chapter in a decade-long debate over the relationship between ride-share companies and their drivers and couriers. The central question is whether these workers are contractors or employees. The latter category, which includes most working Canadians, enjoys basic protections such as minimum wages, employment insurance and compensation in the event of termination.
Uber and other app companies have always argued that their workers are contractors; in fact, Uber insists it’s not in the driving business at all. It’s just a tech company that connects people offering services with people seeking them.
That questionable logic has sparked a litany of lawsuits. But there has been little government action in Canada or the United States. California is, or rather was, an exception. After a court ruling in the state, legislators in 2019 passed a bill that deemed gig workers to be employees. In 2020, Uber and others spent US$204-million on a binding state referendum that aimed at exempting their gig workers from the new rules. They won, with 59 per cent of the vote.
There’s a reason the app companies so ferociously defend their position. In regulatory filings, Uber says it would incur “significant additional expenses” if it had to pay its drivers as employees and adds that being forced to do so “would require us to fundamentally change our business model.”
In rare cases, Uber has been pushed into semi-retreat. In early 2021, Britain’s Supreme Court ruled that Uber was an employer. A month later, Uber reclassified its British drivers as “workers” – a middle category that Britain has between freelancers and full employees. The new status provided benefits such as access to pensions.
In Canada, there have been no big legislative stirrings. Ontario is considering a benefits fund for gig workers, which sounds like what Uber has proposed. There has also been talk of a minimum wage. The federal Liberals in 2019 promised “greater labour protections” but have since turned to reforming employment insurance. Both levels of government have largely skirted the central issue, namely whether these workers should be treated as contractors or employees.
Watching the slow progress, and the reversals, UFCW seems to be taking a pragmatic approach in collaborating with Uber. The deal doesn’t offer much new, but it is also more than Uber’s Canadian workers had before.
And gig economy workers need protecting. It is precarious work that generally offers low pay and no job security, and your boss is an algorithm. Some workers appreciate the flexibility, but there’s a huge power imbalance inherent in this new business arrangement.
The answer may not be to order companies to treat all gig workers as full-time employees. There has to be some flexibility in how long-established worker protections are applied to this new business model. But one way or another, all workers, and particular low-wage workers with little or no bargaining power, deserve the legal protections extended by law to everyone else, to ensure their health and safety, and to prevent them from being forced to work for less than minimum wage. That’s the bottom line.
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