February / March / April 2016
Newsletter Volume 61, Number 1

How Teamsters must approach the "Sharing Economy"

Since Uber was launched in San Francisco in 2011, the company, now valued at $62.5 billion, has expanded to 58 countries and 300 cities worldwide. Initially established as an alternative to the taxi industry, Uber is expanding into package and food delivery, paratransit, and public transit. As Teamsters, we should be very, very worried.

At the core of Uber and these other platformbased companies is a model that is not new to our union. Uber hires drivers as so-called “independent contractors,” meaning the drivers are responsible for their vehicles, their insurance, their gas – everything. Uber pays no payroll taxes, social security, and worker’s compensation – nothing. They claim they are not an employer but an “app.” And the drivers have no legal right to organize or collectively bargain because they are not employees under the law.

Finishing what deregulation started

If this sounds familiar to you, it should. This model grew out of the ashes of deregulation of trucking in the 1980s. Prior to that, we were the largest and strongest union in the country. Our strength and numbers were based primarily on the National Master Freight Agreement, which at that time, covered all trucking coast-to-coast. In the first five years after deregulation, half of the trucking companies in the U.S. went out of business. Fast forward to now, when we have two companies left in that Agreement. Uber’s goal would be to complete the job that deregulation started. Scary stuff indeed.

Every day, UPS Teamsters share the road and compete with misclassified “independent contractors” driving for FedEx. Our ongoing but slow efforts to organize port truck drivers have led to some drivers being reclassified into employees under the threat of penalties from the State of California. We’ve passed legislation in California that increases penalties on employers who deliberately misclassify their employees. And here in the Bay Area, we are negotiating Project Labor Agreements that will help us crack down on misclassification of drivers engaged in on-haul and off-haul of materials to and from construction sites.

Yet as old as this problem is to the Teamsters, we see many politicians who are with us on other issues but not on this. Somehow these apps are a shiny, sexy new thing to them. At the risk of quoting Sarah Palin, all it looks like to me is “lipstick on a pig.”

These companies, whether Uber or AirBnb, have one primary political agenda: stop local, state, and federal governments from regulating them. Look only to San Francisco over last year’s fight around regulating AirBnb, a battle that impacted Teamsters Local 856 members in the hotel industry. AirBnb spent historic amounts of money to beat off increased regulations and played in local politics in a way we have not encountered before on the employer side. Uber is dumping more money into politics and hiring sophisticated consultants to make their case.

The Teamster challenge

This presents a challenge to Teamsters. We have to step up our political game lest we be squashed. Every penny you contribute to DRIVE —our political action fund—counts. Registering to vote and casting your ballot counts. And as we go into the 2016 election cycle, look to Joint Council 7 to step up our game.

So what are we doing? We are engaging with high tech and winning. By the time you receive this paper, Joint Council President Rome Aloise’s pioneering campaign will have organized roughly 1,000 shuttle bus drivers who work under contracts with companies including Facebook, Apple, Yahoo, and more. We have negotiated contracts that are bringing these drivers into the middle class. We have joined with other unions and community allies in a coalition called Silicon Valley Rising. We expect our coalition to organize 3-5,000 more workers this year in high tech. That is power.

We are going after all the ways that employers try and dodge responsibility for their workers. Teamsters Local 350 won an incredible victory last year against the garbage company Republic at the National Labor Relations Board. The Board’s rule will hold employers who contract with staffing agencies jointly liable when we organize their workers and negotiate contracts. We won similar legislation in California in 2014, led by the campaign at Taylor Farms, which holds employers and their staffing agencies jointly liable for wage and hour violations, worker’s comp, and health and safety laws. And as this paper goes to press, we just launched a ballot initiative with Silicon Valley Rising in San Jose that will require employers to offer qualified part-time employees additional hours instead of hiring more part-timers or temps.

Which brings me back to Uber. We fought a series of bills last year in Sacramento that would’ve allowed Uber to go after our jobs. All that will be back on the table this year. In Seattle, Teamsters Local 117 successfully convinced the Seattle City Council to pass legislation giving app-based and taxi drivers the right to organize and collectively bargain. Of course, the ride-sharing companies are challenging it. Here on the home front, similar legislation is being considered at the state level. We are evaluating it.

At the same time, Uber is facing a classaction lawsuit here alleging they are misclassifying their drivers as independent contractors instead of employees. Similarly, separate rulings from both the California Department of Labor Standards Enforcement and the Employment Development Department establish that these drivers are indeed employees. Uber is appealing. We need to be ready.

These issues are not going away, especially in the Bay Area. Uber just bought the old Sears building in downtown Oakland–a huge real estate purchase–and its top rival, Lyft, has headquarters in San Francisco. Working people in those cities are being priced out of neighborhoods as rents and housing prices reach astronomical levels. We see politics changing in those cities as a result.

Whether in Sacramento, San Francisco, or Washington DC, when we raise thee issues around Uber and high tech, inevitably, some politician will accuse us of being “against innovation.” They tell us that Uber and others are disrupting the economy and industries in a good way.

That’s why it’s important that we have new Teamsters bus drivers like Scott Peebles, whose story hit the front page of the San Francisco Chronicle newspaper as an Apple driver living in his car in San Francisco. Now, under his Teamster contract, he has a home.

So, to any politician who criticizes us, we can tell them that we are disrupting inequality in the tech sector. Look to Joint Council 7 to stay engaged; these are big fights and our jobs depend on it.

Read more on the "sharing economy".