A Flexible Con-Trick

On March 10, the company invited a select group of Uber workers to join a zoom call with Uber Senior “rides and platform” VP Andrew Macdonald. While these workers spoke positively about the company, many expressed frustrations with Uber’s lack of life insurance, job security, reliable tips, and more.

“Thank you for keeping our cities moving. I really do think a lot of you should take a lot of pride in the work you are doing,” Macdonald told the workers. He concluded:

Thank you very much for telling me a little bit about your families or your personal situations. It is a very hard time for the world right now and I know we all feel a little bit of loneliness and a little disconnect so for me I know it’s made my day to be able to spend the hour with you.

But the zoom call wasn’t just a feel-good listening session. It was also meant to launch Uber Technologies, Inc.’s proposed override of Canada’s labor laws.

The present laws, Macdonald claims, are “are outdated, unfair and somewhat inflexible.” Uber’s proposal, the euphemistic “Flexible Work+,” seeks to make exceptions for app-based work, but not in ways that will help app-based workers:

One of the conversations we’re starting to have with the provincial governments in Canada is — how do we protect and lock-in the flexibility and power that I’m hearing many of you describe and also provide those things that make that the standard for flexible work?

Currently, Uber workers in Canada are classified as independent contractors — meaning they decide when to work and what work to do. However, this “flexibility” comes with enormous costs. In Ontario, for example, these contractors have no legal right to a minimum wage, sick days, collective bargaining rights, or breaks.

Uber passes on an employer’s usual costs to its workers, leaving them responsible for tasks like vehicle maintenance. In theory, workers may choose when and how they work. But they all need to eat, pay for shelter, and support their dependents, which means that schedule flexibility is a charade.

This structure of employment has been massively profitable for Uber. As the United Food And Commercial Workers union notes, Uber rakes in most of its revenue from the value of the service its drivers provide. The company has the power to terminate those drivers and can to a large degree dictate the terms of their employment. Yet it doesn’t have to pay them a minimum wage or risk ceding any of its power to a union.

In 2020, while many of the company’s workers reported a drop in their compensation rates, Uber chalked up a significant revenue increase. According to Uber’s most recent filing with the Securities and Exchange Commission, while its “mobility revenue” fell, its delivery revenue — “partially offset” by incentives for “delivery people” — increased by $2.5 billion last year.

Meanwhile, the “risk section” of Uber’s S-1 filing warns explicitly that “our business would be adversely affected if Drivers were classified as employees instead of independent contractors” — a message reiterated in its filing from December 2020.

In the United States, the S-1 warns, profits may be hampered should the company face:

…difficulties in managing, growing, and staffing international operations, including in countries in which foreign employees may become part of labor unions, employee representative bodies, or collective bargaining agreements, and challenges relating to work stoppages or slowdowns.

Tellingly, it also notes that

…we may not be successful in defending the independent contractor status of drivers in some or all jurisdictions. Furthermore, the costs associated with defending, settling, or resolving pending and future lawsuits (including demands for arbitration) relating to the independent contractor status of drivers could be material to our business.

This classification has, in fact, been successfully challenged abroad. In February, the Supreme Court in the UK upheld a ruling that reclassifies independent contractors as workers.

Last year, the Ontario Labour Relations Board (OLRB) determined Foodora couriers — also classified as independent contractors — to be “dependent contractors.” The OLRB found that the couriers were entitled to full Employment Standards Act rights — including union recognition. Workers achieved this victory through successful organizing in the teeth of Uber’s extensive anti-union campaign.

Old Plan, New Plan

According to Uber, Flexible Work+ will offer “a modern approach to app-based work in Canada.” The website claims that

…COVID-19 has changed the way we all think about work. But more importantly, it has refocused attention on Canada’s outdated labor system in which some workers get benefits and protections while others do not. This is a norm we can no longer accept, and we have a responsibility to help create a better future for app-based work.

The plan has two key components. The first involves “self-directed benefits,” whereby workers “accrue” funds commensurate to their hours worked in a “flex package.” The workers will supposedly be able to direct this package toward paid time off, education expenses, or insurance.

The second component involves “enhanced worker protections,” described nebulously as “training and tools.” We can be sure that these tools will not be designed to supply a minimum wage or union recognition.

Uber claims that this new plan, which looks suspiciously like the old plan, is attractive to workers. Drivers and delivery people, the company insists, prefer

…the new Flexible Work+ model and the traditional independent contractor model over employment. We remain committed to providing flexibility, and making this the foundation of our plan for the future.

The push in Canada closely mirrors California’s Prop. 22, which saw Uber and other app-based companies spend gigantic sums to overturn a court decision and re-classify their workers as independent contractors.

Labor lawyer Joshua Mandryk told PressProgress that under the terms of Flexible Work+, gig workers

…would be excluded from minimum employment standards and they’d be excluded from [Canada Pension Plan] contributions and excluded from eligibility from Employment Insurance, but Uber might give some little pittance towards a self-directed benefit fund where drivers can decide if they want it to go to a Registered Retirement Savings Plan or dental care.

Legal Battles

According to BNN, Uber has pegged the cost of “Flexible Work+ in Canada” at about $40 million per year. However, as one employment law firm has noted, Uber’s lobbying comes after it lost a high-profile case at Canada’s Supreme Court.

Workers claimed that they had been misclassified as independent contractors and were owed compensation for lost wages. Uber argued that the case had to be settled in front of a private arbitrator in the Netherlands, where the company’s head office was located, because of an obscure clause in its contracts. The court struck down Uber’s argument last spring, opening the door for a $400 million class action suit to proceed.

Ratcheting up more pressure on the company, Uber Black drivers seeking recognition with the United Food and Commercial Workers union recently had their first hearing at the OLRB. With the Foodora case set as a precedent, the Uber Black drivers’ bid for unionization could further “disrupt” the low-wage, massively unequal business model that has made the owners of Uber so wealthy.

With the battle lines drawn, Uber is getting ready for a fight. The experience of California shows that the company is determined to cling on to a highly lucrative business model that tramples on the rights of workers. But Uber is far from invulnerable: as the company itself has warned its shareholders, mobilization by workers through every available avenue, from industrial action to legal challenges, can put a stop to its unscrupulous profiteering.