By David McCabe - 11/15/15 08:30 AM EST
Tech companies, venture capitalists and unions are uniting behind a push to win benefits for the growing contingent of ‘on-demand’ workers at companies like Uber.
A statement released this week in support of making benefits more portable was signed by boldface names in both tech and labor. The two founders of ride hailing service Lyft signed on, as did a partner at the venture capital firm Union Square Ventures. So did an official with a Seattle chapter of the Service Employees International Union and the heads of two notable worker alliances.
It’s a partnership between communities that have sometimes been at odds, but who see an issue where they both have much to gain by working together.
“I think great things are often accomplished through coalitions of strange bedfellows,” said SEIU 775 President David Rolf, who signed the letter.
The statement, released on Medium on Tuesday, is an urgent call for policymakers to consider ways that a social safety net can be established for workers at on-demand economy companies.
The workforce at the startups, many of which have grown into multi-billion dollar enterprises, is largely comprised of independent contractors who don’t get the kind of benefits and protections given to employees. That is often cheaper for companies, who are not on the hook for things like unemployment and health insurance subsidies, but critics say it leaves the workers vulnerable.
“Everyone, regardless of employment classification, should have access to the option of an affordable safety net that supports them when they’re injured, sick, in need of professional growth, or when it’s time to retire,” the statement reads.
They said that America needed a “new model” to deliver benefits to the workers that is available to all and can accommodate workers who are working as contractors for more than one service or business.
Whatever that model ends up looking like, they said policymakers should move forward quickly.
“The nature of work has been in flux for decades, and new technologies are accelerating these changes; progress on how we respond must begin immediately,” they said.
Tech and organized labor have not always been close. Many early technology companies were also U.S. manufacturers, and believed they could provide for their workers without the assistance of a union.
In recent years, some unions have fought the expansion of services like Uber — which targets the unionized taxi business — and drawn the ire of Silicon Valley.
“People in the tech industry feel like life is a meritocracy,” said Sarah Lacy, tech journalist and founder of the site PandoDaily, in 2013 while speaking about a strike on San Francisco’s public transit system. “You work really hard, you build something and you create something, which is sort of directly opposite to unions.” Her comments drew significant public outcry.
But both groups see advantages in finding ways to provide benefits to the on-demand workforce.
Labor sees an opportunity to expand the safety net to a new group of workers and adapt to fundamental shifts in the ways — and venues — in which people work.
“If we don’t do anything, we will just continue to see, I think, workers not having a safety net as more and more workers become independent contractors and freelancers and gig workers,” said Sara Horowitz, the president of the Freelancers Union. “We really have to start looking at what this will this mean. And I believe that there’s a real role for labor here and that we need to really start to shape this and bring the constituency together behind a safety net.”
There is also a major potential benefit for on-demand economy platforms in providing benefits as well: It’s another tool to attract workers and beat their competitors in the fiercely contested marketplace.
Oisin Hanrahan, the CEO of Handy, which allows users to order home care services, and is a signer of the statement, said that “competition across the platforms themselves” was a driving force behind companies embracing the idea of benefits.
“What we’re looking to do as part of this is really create the space for these platforms, for platforms like Handy, to compete and figure out how we can offer we can offer access to benefits to our pros, how we can offer access to training and education to our pros,” he said.
It is also a tighter labor market than when many of the companies started, Rolf and Horowitz noted, meaning that they are facing steeper competition for workers.
“Some of the people who might have depended on an on-demand app for significant portion of their income three years ago now are getting offers to take a full time job with benefits,” Rolf said. “In the labor market, some of the app-based distribution platforms are experiencing what it means to not be able to offer benefits to people.”
When Uber was founded in March of 2009, the national unemployment rate was 8.5 percent. By last month, it has fallen to five percent.
There are reasons to think that some may still be wary of a labor-tech alliance on the issue. Uber did not sign the letter, and neither did major labor groups like the AFL-CIO and Teamsters. Many of the labor signers were non-union organizations that have sprouted up to organize workers who aren’t represented by traditional unions.
And there are certainly differences of opinions that could emerge. Horowitz, for instance, said that “it’s really important that we … recognize that the provision of benefits needs to be done within the social sector, whether it’s non-profits, community faith-based groups, unions — that people need to be able to designate who they want to be their representatives and that it’s not something that comes from the [on-demand economy] companies themselves.”
Tech companies are also reportedly warm to the idea of a regulatory moratorium that would allow them to examine the issue without fear of a government crackdown.
But an organizer of the letter said he hoped that it would establish common ground between tech and labor groups before any debate over how to provide benefits becomes too heated.
“There will be different views moving forward about what’s the right models for how to deliver on the promise of the letter,” said Greg Nelson, a former Obama White House official who helped coordinate the letter. “Honestly, part of our goal was, before we get into some of that debate let’s agree on some common ground, and then that will make it so as we move forward there can be maybe a more productive conversation about some of those inevitable differences of opinion.”