Uber drivers get a pay floor in Washington state

Not every innovation is sexy

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Labor rules.

Photo by John Moore/Getty Images

Last week was big for labor rights. Amazon workers at a warehouse in Staten Island, New York, voted to unionize, a first in company history. Starbucks workers voted to unionize the company’s flagship store in Manhattan, the tenth Starbucks location to organize since late last year. And in Washington state, governor Jay Inslee signed a law establishing a minimum pay standard and paid leave for ride-hail drivers.

One of these things is not like the other. While the “Expand Fairness Act”(HB 2076) won support from local labor groups like the Teamsters, it does not give drivers the ability to bargain collectively. Instead, it arguably staves off the need for a union by offering workers a compromise in the form of higher pay and certain benefits. A carrot, not a stick. Under the new law, and starting Dec. 31, 2022, ride-hail drivers in Washington state are guaranteed minimum earnings of:

• In Seattle: $0.59 per ‘passenger platform minute’ and $1.38 per ‘passenger platform mile’ or at least $5.17 per dispatched trip

• Everywhere else: $0.34 per ‘passenger platform minute’ and $1.17 per ‘passenger platform mile’ or at least $3 per dispatched trip

The law also entitles ride-hail drivers to:

• Tips, which may not count toward minimum compensation

• One hour of paid sick leave accrued for every 40 hours worked

After a decade of battling employment classification lawsuits, Uber has entered a new era of labor negotiations. Rather than put the kibosh on any and all workers rights movements, the company is increasingly working with local unions and legislatures to find compromises that are amenable to drivers while also potentially less threatening to the company than a full-fledged union. Uber’s first foray here was the Independent Drivers Guild (IDG), a driver advocacy group formed in New York City in 2016 as part of an agreement between the company and a regional union branch that was explicitly not a union. The IDG has led several successful campaigns, most notably for Uber to give riders the option to tip (something co-founder Travis Kalanick famously abhorred) and to set a first-of-its-kind pay floor for drivers, which the city did in late 2018 with a clever economic formula. The IDG notched wins on these goals even as driver labor campaigns in other parts of the U.S.—an attempt to unionize in Seattle, the many employment classification lawsuits—faltered. Uber also recently struck a deal in January with United Food and Commercial Workers Canada to offer a pay floor, benefits, and support and legal representation by the union to Canadian ride-hail and delivery drivers.

Uber and other gig companies have historically blamed U.S. labor laws for preventing them from providing benefits and support to their workers. The argument was that providing any form of benefit like paid time off or a minimum wage would imperil the gig business model, which relies on a large workforce of independent contractors, because it would be interpreted by regulators as evidence of an employer-like relationship. You can take that at face value or view it as a somewhat cynical excuse for doing little to improve gig labor conditions. Regardless, Uber’s deals in Canada and Washington state, plus the early success of the IDG, suggest the company has found a new way to offer some of these benefits and gain support from labor groups without endangering its business model. That might not sound very sexy in the tech/startup world, but if it catches on it would be a huge innovation.

VAT.

Uber fares are up 20% in the U.K.—a big jump!—as a knock-on effect of drivers being deemed ‘workers’ rather than self-employed by the UK’s high court last year.

The price hike is due to a change in how Uber deals with value added tax (VAT) that was triggered by the high court ruling. VAT is a 20% tax on most goods and services in the U.K. for businesses or individuals that clear a certain revenue threshold each year (currently it’s £85,000). Uber obviously generates more than £85,000 in revenue in the U.K. annually, but for years the company side-stepped VAT by claiming the responsibility to pay it fell on individual drivers (who often didn’t reach the VAT threshold anyway) and not the company.

This was a real advantage for Uber! Twenty percent is a lot—much higher than combined state and local sales tax rates in the U.S.—and leaving it out was one lever Uber pulled to keep U.K. fares relatively cheap. Daimler- and BMW-backed rival Kapten tried to attack Uber for this VAT avoidance when it launched in London in 2019 (“not uber cool,” the billboards declared), but I would guess that the average consumer is less concerned with the minutia of VAT payments than which company has a cheap ride available quickly in their app.

Following last year’s ruling that Uber drivers in the UK are ‘workers,’ the high court also clarified in a separate judgement that the company needed to start charging VAT to its U.K. customers. That could make things even tougher for Uber in the U.K. after months of long waits and high prices, and a previous 10% price hike in London designed to get more drivers on the road.

Scooters!

Researchers in the UK are working to develop a ‘universal sound’ for e-scooters to alert pedestrians to their presence, the Guardian reports:

The silent motors of e-scooters can be dangerous for people who expect to be able to hear hazards approaching on roads and pavements, and the researchers have gained funding to explore a range of audible motor sounds to find one which is sufficiently noticeable to help safety, while being pleasant for those around, and avoiding unnecessary urban noise pollution.

The winning sound was a ‘broadband’ noise with a mix of high and low frequencies, and which could vary with speed and thrust like the sounds made by an internal combustion engine. The EU began requiring new electric cars and vans to come with a noise-alert system that mimics a traditional engine in 2019, over concerns that the ultra-quiet vehicles posed a risk to pedestrians. London transport regulator TfL has also trialed artificial alert sounds for electric buses moving at slow speeds. As someone who has almost been run over from behind by an unheard e-scooter on a sidewalk more than once, adding a lowkey, non-grating noise to the devices makes sense, though it would also be nice if riders also used the bell.

Pizza principle.

I don’t miss many things about living in New York City but $1 slice pizza is definitely one of them. Well, RIP:

The "pizza principle" is a cheesy New York economic concept claiming the price of a cheese slice and a single subway ride should cost the same and rise together.

This concept has more or less proven true since the 1950s.

But according to Bloomberg, that pizza is really slicing into our budgets costing about $3.14, compared to a $2.75 fare.

There are some things that make inflation feel especially real, and $3.14 slice pizza is one of them. I hate to think what might have happened to the price of a bagel.

Other stuff.

New York City’s new subway chief doesn’t own a car. Instacart slashes valuation by nearly 40%, to $24 billion. Instacart jumps into 15-minute grocery delivery. Morrisons and GoPuff partner on UK instant grocery delivery. BJ’s adds same-day delivery to membership program. Uber gets 30-month license to continue operating in London, seeks 20,000 new drivers. Uber nears deal to add San Francisco taxis to app. Lyft adds Spin scooters to app. DoorDash and Grubhub offer gas assistance to delivery drivers. SoftBank exec Ronald Fisher steps down after 27 years. Driverless car companies plan race from San Francisco to New York City. Waymo bringing fully driverless car rides to San Francisco, expanding paid rides service in downtown Phoenix. Oxford extends e-scooter trial, again. London firefighters called to more than 130 e-bike and e-scooter battery fires in the past year. Mechanics hack e-scooters to increase speeds. Google offers free e-scooter subscriptions to get employees back to the office. Tampa blames “drunks, jerks and buffoons” for all those e-scooters in rivers.