USA: Uber Settlement Designates Drivers As Contractors

ubercar42316_0First the good news: Uber the ‘ride sharing’ company has announced this week it had settled two class action lawsuits iand agreed to pay up to $100 million to workers in California and Massachusetts. The bad news: Uber gets to continue to classify its drivers as ‘independent contractors’

USA Today described the settlement which affects 385,000 workers in California and Massachusetts as “a big win for a company whose business model depends on keeping costs low by merely serving as a conduit between drivers and riders, rather than being an employer.”

As Uber drivers are classified as ‘independent contractors (described in the USA as 1099 workers) they do not qualify for health benefits, Social Security, unemployment or injury compensation, sick pay, holidays and holiday pay – or any other safety net benefits.”

Former US Labour Secretary Robert Reich says the designation means Uber drivers are “outside the labour laws – the most significant legal trend in the American workforce – contributing directly to low pay, irregular hours, and job insecurity”.

What makes them “independent contractors” is that Uber and other ‘ride’ companies say they work for say they are independent contractors who get their work via the Uber platform.  Companies such as Uber do no have any costs  of having full-time employees.

The settlement includes $84 million to the plaintiffs, and allows drivers to put signs in their cars saying ‘tips are not included’ in the price of a journey and would be appreciated”. There will be a second payment of $16 million if Uber goes public and the company valuation increases one and a half times from our December 2015 financing valuation within the first year of an IPO.

The Wall Street Journal described the amount as “a small concession relative to the larger triumph of preserving the high-margin business of connecting passengers to freelance drivers.”

However, as the Washington Post noted, “The settlement does not set any legal precedent and the company still faces other suits that remain unresolved.”

511kiLg3xQL._SX327_BO1,204,203,200_Earlier his month, Uber also released its first-ever transparency report which showed “that in the second half of 2015 alone, the ride-sharing app handed over information affecting more than 12 million riders and drivers to a number of U.S. regulators, and shared data about more than 400 users with federal and state law enforcement agencies.”

The Uberization of the economy ploughs on, wiping out decent jobs and underming employment rights. This issue will be a major issue for trade unions in the USA, the EU and the UK.

For more on Uberization and the digital revolution click on the book cover.

For more on the digital economy and its effect on trade unions click on the following links:

Trade Unions And The Coming Digital Revolution

Labour Needs To Get To Grips With The Digital Economy

Big Union Row Over Airbandb

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UPDATED: USA: Big Row Over Union Discussions With Airbandb

bnb_billboard_02-2000x1125-1Discussions between the US union SEIU (Service Employees) and the web based short term home rental – accomodation platform Airbnb have created a major row in the US trade union movement.

The Service Employees International Union (SEIU) is said to be working to reach an agreement with Airbandb which would see housekeepers be represented by the union.

If the deal is successful, it would mark the first-ever formal arrangment  between a major company in the new ‘gig economy’ and a trade union.

Critics of the deal say that concerned that Airbnb has exacerbated housing crises in cities across the US, including in San Francisco, where Airbnb is headquartered.

The Washington Post has published documents that set out the terms of a possible agreement which would include Airbnb endorsing a $15-an-hour minimum wage a deal ensuring cleaners are paid at least $15 an hour and are trained and certified in providing “green home cleaning services”.

The agreement is said to be modeled on an agreement between Airbnb and Cooperative Cleaning, a worker owned cleaning agency in New York. The Washington Post described the deal as one that “allows the Airbnb to make the claim that it is creating good jobs for local residents”.

The backlash has come from the Unite Here union which organises hotel and hospitality workers and community and housing groups.

“We are appalled by reports that SEIU is partnering with Airbnb, a company that has destroyed communities by driving up housing costs and killing good hotel jobs in urban markets across North America,” said Annemarie Strassel, of Unite Here.

“Airbnb has shown a blatant disregard for city and state laws, has refused to cooperate with government agencies, and turns a blind eye to the fact that its business model exacerbates the affordable housing crisis.” She added: “A partnership with SEIU does little more than give political cover to Airbnb.”

“We have been engaged in conversations with organizations and community leaders about how to best help working families find solutions to economic inequality, including creating specific ways we could leverage the Airbnb platform to help create quality union jobs that pay a livable wage,” Christopher McNulty of the company has said.

The SEIU said: “We actively and regularly engage in conversations with companies who are committed to doing right by their workforce by paying better wages and giving them a voice at work through their union. Airbnb is one such company, however, there is no formal relationship or agreement between SEIU and Airbnb.”

New York politicians lead by the Manhattan borough president, Gale Brewer have sent a letter to the SEIU expressing concern with the deal. “We find it troubling that SEIU is exploring entering into an agreement with Airbnb – a company whose business model displaces the very people you are seeking to represent and protect from their homes and communities,” the letter states. “Such a partnership would lend credence to Airbnb’s illegal manipulation of the housing market, and give the worst actors a legitimate platform to conduct their illegitimate and harmful business activities.”

Airbnb is part of the fast growing digital economy sometimes described as ‘Uberization’, companies working from a web based platform who employ directly few workers such taxi companies Uber and Lyft who consider their drivers as self employed  and have vigorously opposed unionisation. Delivery companies in the USA such as DoorDash and Postmates say their workers are self employed or contractors – with few employment rights.

Opposition to Airbnb goes back to 2014 when the company approached New York local of Unite Here, to try to agree a similar deal but the union descibed the company as advertising ‘illegal hotels’.

The union said that they refused to work with Airbnb because it allows people to illegally turn their homes into hotels, taking permanent housing off the market and worsens affordable housing shortages.

There is animosity between Unite Here and Airbnb as the union said the company told them they intended to ‘remove them from the field’ – something the company deny.

Unite Here says that if SEIU signs a contract with Airbnb they will be providing cover for the company afor a few members going against trade union principles.

Opponents of the deal also say that Airbnb, which is worth an estimated $25.5bn, do not pay their fair share of taxes and groups in San Francisco are pres restrictions on Airbnb users in the company’s home city.

To add fuel to the fire it has also emerged that SEIU former president Andy Stern, now a consultant, is representing Airbnb in the negotiations.

UPDATE: Airbandb talks with SEIU collapse.

In a statement SEIU has now said it does not have an agreement or deal with Airbnb and that it plans to work with Unite Here, the US union that represents hotel workers.

“Representatives from SEIU and Unite Here met and have agreed to find a common approach to protect and expand the stock of affordable housing in all communities across the country and to protect and preserve standards for workers in residential and hotel cleaning while also growing opportunities for these cleaners to improve their lives,” SEIU’s statement said.

Unite Here welcomed SEIU’s decision to back away from a deal with Airbnb. “It is our clear understanding that SEIU will not have a deal with Airbnb to represent housekeeping services,” said Unite Here spokeswoman Annemarie Strassel.

Strassel continued: “Unite Here will continue to vigorously oppose any efforts by Airbnb to expand and push for commonsense laws to mitigate the devastating impact this company has had on our communities.”

For more on the digtial economy read the following:

Labour Needs To get To Grips With The Digial Economy

Trade Unions And The Coming Digital Revolution

We Need To Be Ready For The Next Revolution



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No To Coup In Brazil

Brazilian President Dilma Rouseff

Brazilian President Dilma Rouseff

Letter in The Guardian

We are extremely concerned about the sustained efforts by sections of Brazil’s right wing opposition in Brazil to destabilise – and ultimately overthrow – its constitutional and elected government, including through attempting to impeach President Dilma Rousseff. This campaign has involved demonstrations for “regime change” through the ousting of the president before the end of her term. These have even included overt calls for the military to carry out a coup d’état.

There is also a crude campaign aimed at discrediting former president Luiz Inacio Lula da Silva, whom Dilma is seeking to appoint as a minister in her government. The aim here seems to be not only to oust Dilma but also legally bar Lula as a potential presidential candidate in 2018.

Meanwhile, trade unions and social movements have denounced examples of physical aggression against government supporters. We oppose this golpista attempt, echo the support for Brazil being given by the Union of South American Nations, and defend Brazilian democracy.

Brian Eno
Michael Mansfield QC
Dr Francisco Dominguez Head of Latin American and Brazilian studies research group, Middlesex University
Grahame Morris MP
Kelvin Hopkins MP
Roger Godsiff MP
Jeff Cuthbert AM Welsh national assembly member
Manuel Cortes General secretary, TSSA
Doug Nicholls General secretary, GFTU
Mick Cash General secretary, RMT
Kevin Courtney Deputy general secretary, National Union of Teachers
Tony Burke Assistant general secretary, Unite the Union
Dr Derek Wall International coordinator, Green party of England and Wales
Salma Yaqoob
Martin Mayer Labour party national executive committee member
Dr Julia Buxton Central European University
Oscar Guardiola-Rivera Birkbeck, University of London
Francisco Panizza Professor in Latin American and comparative politics, LSE
Dr Peter Hallward Professor, Kingston University

See also:
TUC Backs Brazilian Unions – Click Here.
Workers Uniting Opposes Brazil Coup – Click Here

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Labour Needs To Get To Grips With The Digital Economy

blog-digital-workerAs the digital revolution gathers at a rapidly increasing pace so is the growth of new forms of employment. One of these is ‘gig workers’ – for ‘one size fits all’ buzzword for anything from service workers to technology professionals – workers who take on work and tasks which are mainly advertised on various web platforms.

The term ‘gig’ is of course well know to most people nowadays having become common vernacular among musicians and music fans to describe a show, event or performance.

But the new adaption of the term is now being used describe a work schedule consisting of short-term employment where workers are contracted for a specific project or task.

In the neo-liberal world this is of course nothing new. It is a simple extension of outsourcing, sub-contracting, franchises, zero hours, agency work and as we saw with the collapse of City Link in 2014 workers being employed as independent contractors.

Debate surrounding the ‘gig economy’ or the ‘Uberfication’ of work (named after the controversial Uber taxi service) – is growing. US presidential candidate Hillary Clinton has recently expressed concerns over what this trend could mean for workers and one right wing Republican – Govenor John Kasich of Ohio is calling for the US Government apparatus to be ‘Uberized’.

At present research by PwC, says ‘gig work’ makes up just 2% of the total recruitment market. Hilary Clinton is right to be concerned. A recent study in the USA predicted that by 2020, 40% of US workers could be ‘independent contractors’ with a forecast that ‘gig working’ will be worth nearly $63 billion globally – and £2 billion in the UK alone.

As I recently blogged on this site that digital dispruption is underway. (Unions And The Coming Digital Revolution). The new digital age will mean that parts of the general workforce will become mobile and their work will be performed done from anywhere, with the job location and the type of work are decoupled.

That means that ‘gig workers’ (ironically previously called as ‘freelancers’) can select temporary work and projects from around the world, while employers can select the individuals for specific projects from a larger pool than that available in any local location using online web based platforms such as TaskRabbit and PeoplePerHour.

The term also stretches to include ‘portfolio working’ – workers who work on a number of different projects for different organisations, and sometimes combining such activity with other employment.

Alex Swarbrick, senior consultant at leadership institute Roffey Park, says ‘gig employment’ tends to consist of two tiers with radically different working conditions. “You can characterise the workforce in this model like an hourglass. So the people at the top comprise highly-skilled workers who are relatively well paid and will work flexibly. Workers at the bottom end of the hourglass, however, are likely to be on temporary, fixed-term, zero-hour contracts and have a number of insecure, low-paid work.”

In other words, for those at the top of the hourglass it will remain an employee’s market, and at the bottom, it will become an employer’s market.

David Knight, associate partner at KPMG’s people and change practice says: “Rolling the clock forward over the next two or three years, I anticipate a groundswell of interest from employers, driven by demand from old and young alike.”

Mark Beatson, chief economist at the CIPD is more cautious. “Most forecasts tend to be over-optimistic in the short-term as change is often much slower to catch on than people expect,” he says. “But gig working may also be difficult to pick up in the statistics, especially if people are just doing a few hours here and there, so we may not see it coming for a while.”

The digital revolution has already contributed to a decrease in jobs as software replaces some types of work and means that others take much less time. Other influences include businesses taking the opportunity declare further staff reductions.

Also the entrance of ‘millennials’, (the ‘Net Generation’) – young workers who reached working age around turn of the 21st century will mean there is a pool of labour who may be willing to accept ‘gig working’  – not just because they enjoy the flexibilty and control over their careers – as some argue  – but as there is little other choice.

All of this poses problems for trade unions and how we deal with the digital revolution. With the massive growth on zero-hours working, these new forms of working such as ‘gig workers’ have no employment rights, no guaranteed income, with jobs based on bidding for work in a web platform will not be in control of their pay and working conditions and many will take on the whole business risk.

Gig-workers-organize-nowIn California, law makers are already looking at the right for ‘gig workers’ and ‘on-demand’ workers to self organise with the proposed 1099 Self-Organizing Act.

Click on the above link for more information – it is an interesting idea.

Meanwhile the Tory Government say they are embracing the digital revolution – witness George Osborne’s wheeze to announce the trial soon of driverless vehicles on UK roads (probably lost in the budget debacle!).

But they are not addressing the consequences of the rapid change in employment the digital age will bring.

Labour are now looking to develop an industrial strategy through the National Policy Forums in the run up to the 2020 election.

Any new Labour strategy for industry must now include a plan on how we will deal with the question of employment and income protection before the tsunami of technology washes over us.

Labour needs to be saying ‘gig workers’ like all others – are working for an employer on conditions and pay set by the employer – even if work is found via an app or a web platform. Labour needs to be saying that they will develop a set of minimum decent employment rights that all workers are entitled to including basic guaranteed standards and a decent guaranteed wage as well unemployment benefit, sick pay, paid leave guaranteed minimum working hours and conditions rather face than a race to the bottom – an economic free-for-all which the neo-liberal economy and its supporters really want.

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Say No To The Trade Union Bill – Produced by Unite Scotland

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Frances O’Grady: EU: A ‘leave’ vote risks manufacturing jobs.

TUC General Secretary Frances O'Grady

TUC General Secretary Frances O’Grady

Frances O’Grady, general secretary of the Trades Union Congress (TUC) spoke this week at Hertford College, Oxford, about the risk of Britain leaving the EU. Here are the edited highlights.

 “We’re not hearing from workers in the Brexit debate – but it’s manufacturing where the risk is greatest”.

I grew up in Oxford, and was living here the last time we had a referendum on the European Union back in 1975.

I was too young to vote, but during the campaign I came across something that caught my eye. It was a photograph of women workers on strike in Belgium.

They were carrying placards appealing for equal pay for work of equal value.

This was a principle that every nation who joined the European Common Market had to sign up to.

I remember thinking about the power of this idea: that by combining our strength across Europe, working people – in this case, working women – could win a better life.

Of course, Britain has changed radically since the 1970s. But the decision we are being asked to make in June is the same.

In or out, Remain or Leave – the outcome of this vote will mould our country for a generation to come.

This is why it’s crucial that the voice of working people gets a proper hearing in the run-up to the referendum.

So far, the debate has had little to do with people’s everyday working lives. And the campaign has thus far been dominated by businessmen in suits.

What all workers want from Europe is decent jobs and wages, fairness at work and sustainable growth – but we’re not hearing from workers in this debate.

And this is a worry, because I believe a Leave vote carries with it significant risks for workers and the balance of power at work.

There is no doubt that many decently-paid secure jobs would go, over time.

Almost half of our exports go to the EU, which accounts for seven of our ten largest trading partners. And half of foreign direct investment depends on Europe.

Without access to a market of 400 million people, global firms would be more reluctant to invest in the UK.

This isn’t something just for business to worry about; it matters to unions and workers too. And it’s sectors like high value manufacturing where the risk is greatest.

Think about what might happen at BMW’s Mini plant in Cowley. Earlier this month, BMW – which directly employs 8,000 workers in the UK – warned that Brexit could affect the firm’s “employment base” in this country. The company’s statement that it derives “significant benefits” from our membership of the EU chimes with what others have said.

A Leave vote risks jobs – especially manufacturing jobs.

But just as much as jobs and investment, we need to talk about workers’ rights. Because Brexit would potentially mean kissing goodbye to many of the protections working people take for granted.

For example, the right to paid time off for ante-natal appointments for pregnant workers, help for working parents which gives them time off to look after a child who is sick. And equal treatment for part-timers, temps and agency workers.

These rights come directly from our membership of the EU. Dismissed as Brussels ‘red tape’ by some, these rights have undeniably made working life safer, better and fairer for many.

Take the Working Time Directive. When it came in to force 1998, two million workers gained paid holidays for the first time ever. Millions now have more generous paid time-off as a result.

A Leave vote would put all these rights at risk. There’s no guarantee any government will decide to keep them. Instead they could water them down – or get rid of them altogether.
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Ultimately, the Brexit camp has to answer the question: if we left the EU, can they guarantee that the UK government will keep and protect those employment rights? I certainly wouldn’t trust them to.

Yes, the EU needs reform. But everyone knows we can only push for change from within. To stand a chance of shaping the future, it’s worth – to coin a phrase – sticking with the union.”

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Anyone In Leicester This Evening??


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Unite To Campaign To Remain In EU

Unite General Secretary Len McCluskey - EU is the 'best hope' for workers.

Unite General Secretary Len McCluskey – EU is the best hope for workers.

Unite has announced that it will campaign for the country to remain a member of the European Union. The union’s 63-strong executive council, consisting of lay representatives drawn from workplaces across the UK, agreed that while the EU needs urgent reform to restore the project to its original mission of solidarity between nations, continuing membership is still the best hope for the jobs and rights of Britain’s workers.

Announcing the union’s support, general secretary Len McCluskey said, “It cannot be denied that the European Union has a great deal of work to do to convince its peoples that it is functioning in their interests.

“The punishing treatment meted out to Greece when it needed assistance not austerity, the enduing indulgence of austerity even though this is eliminating Eurozone growth, and the EU’s gross failure to address the urgent humanitarian crisis on its borders – these all illustrate the need for this union of nations to urgently rediscover its original mission of solidarity and shared prosperity.

“It is undeniable, however, that for millions of UK workers and their families, the EU is the best hope for their jobs and fundamental rights,” McCluskey added.

“Our communities clearly benefit from the investment and trade links that come with being part of the EU. And our working people are in increasing need of the employment rights that flow from membership. Rest assured that outside of the EU, left at the mercy of a Conservative government, these protections will be swept away. That probability is reason alone to campaign to remain in the EU.

“The EU cannot be run as a superhighway for corporates without a thought to the wider social consequences,” he went on to say. “So Unite will be saying that this referendum campaign is also an opportunity for political leaders from all parties to heed the warning signs from the electorate; they want reform, they want a people’s EU.

“We are fully aware that we face a difficult task – our members are in no mood to listen to David Cameron and a Conservative party that has systematically denounced decent trade union members as the ‘enemy within’.

“But the rights, jobs, prosperity and security of our members come first, which is why this union will be urging our members to vote remain this June.”

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Morning Star: 50th Anniversary Gig, 100 Club, London

100 CLUB GIG ADVERT - proof

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AFL-CIO Executive Council Statement on Volkswagen

vw-chattanooga-plant-lay-off-500-workersBelow is a statement from the AFL-CIO Executive Council on Volkswagen’s continuing refusal to bargain with UAW Local 42:

The diesel emissions scandal at Volkswagen has called into question the principles the company has touted: environmental protection, sustainability and social responsibility. The damage done by the deception perpetrated on its customers will take a long time to heal.

Volkswagen workers also are feeling deceived, not so much by the emissions cheating, but by the company’s behavior at its Chattanooga, Tennessee, plant. After the tainted February 2014 representation election, where anti-union politicians and big money interests interfered with the vote, the UAW filed election objections with the National Labor Relations Board. But Volkswagen was not eager for a public airing of that election conduct. So in an April 2014 agreement between Volkswagen and the UAW, the union agreed to withdraw its objections at the NLRB and Volkswagen promised to recognize the UAW based on its majority support. The UAW withdrew its objections; Volkswagen has ignored its promise.

The UAW chartered Local 42 in July 2014 to carry on the fight. Tennessee politicians, especially Gov. Bill Haslam, have continued a drumbeat of baseless assertions that unionization would hurt the state’s economic vitality, completely ignoring the thriving General Motors plant in Spring Hill represented by UAW Local 1853. In 2015, Local 42 made the strategic decision to pursue its goal of a collective bargaining agreement in a series of steps. The first step was to seek an election for the plant’s 160 skilled trades workers. Volkswagen scrambled to re-engage with the union, asking for meetings to discuss its long-ignored agreement on recognition. Meetings were scheduled and then canceled by the company. When Local 42 filed its petition at the NLRB, Volkswagen sent a “special communication” to all Chattanooga employees, notifying them of its opposition to the petition but indicating it would enter collective bargaining if the UAW was elected.

Local 42 was elected, by better than a 70% margin. Yet within weeks of their victory, Volkswagen again went back on its word, refusing to begin negotiations and appealing the NLRB’s election decision. Volkswagen’s refusal to bargain is not only a reversal of its pre-election statements, but violates its own Declaration on Social Rights and Industrial Relationships.

To regain the trust of its stakeholders, Volkswagen must make corporate social responsibility (CSR) more than just a slogan and a public relations strategy. It must recognize that emissions controls are meant to limit the social costs of air pollution, and that collective bargaining helps create and sustain a productive and secure workforce.

The 12.5 million women and men of the AFL-CIO call on Volkswagen to turn a new page, fulfill its promises, and sit down with UAW Local 42 to negotiate a collective bargaining agreement.

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