Transportation network companies in California sure have been under an Uber-microscope in recent months.
In mid-June, the California Labor Commission ruled that a San Francisco Uber driver is a company employee and not an independent contractor, which could ultimately require the company to provide certain benefits and pay certain taxes and costs borne by drivers.
And in recent weeks, an administrative law judge of the California Public Utilities Commission suspended the license and fined a subsidiary of Uber $7.3 million for failure to meet reporting requirements. The ruling states that the company didn’t provide state regulators with data such as the number of rides requested, or driver safety and accessibility information about its vehicles.
As President of the California Delivery Association, representing the interests of thousands of small businesses and scores of jobs within the messenger, courier and delivery industry, I must admit that this legal and administrative scrutiny is long overdue. Make no mistake: our members and the average “mom and pop” do not advocate cluttering the field with more government requirements. But as long as that field is operating on various levels, with some businesses getting off scot-free and leaving others at a competitive disadvantage, we will never inspire the entrepreneurial spirit or a notion of “free enterprise” in the Golden State or anywhere else.
The delivery industry, just like our association, has direct roots here in California, with Wells Fargo deliveries being among the very first messenger services anywhere in the nation. What makes our industry so unique and in high demand is our ability to deliver goods in “real time” and to our local communities, often items of a sensitive nature that need to arrive ASAP. That includes medical supplies to urgent care centers, special parts or tools for major infrastructure projects and vital legal documents that simply cannot wait until tomorrow. We are for the most part the “little guy” serving our own backyards.
But, unfortunately, more often than not, our industry is viewed as an afterthought by many policymakers or government in general. We create most of the jobs in our industry and transport vital products and goods to our own neighbors, but are taken for granted. We have fewer resources but on average are forced to pay more than “Big Business” – 18% more for the same health plan, 45% more to comply with regulations and three times more to comply with taxes than a larger business entity.
That’s why it has frustrated our members and industry, men and women who work so hard to do the right thing despite these high costs and requirements, to see transportation network companies like Uber, Lyft and others skirting the same rules and requirements our companies and drivers are expected to abide by.
Let me be clear: our industry does, in fact, embrace and applaud the innovation and service of these emerging businesses as part of the new “sharing economy”. We’re not stuck in the past or asking these businesses to go away. We are simply asking our policymakers to hold these businesses to the same level of accountability and expectations that all companies, vehicles and drivers must follow every day.
We’re also not big fans of “more regulation”, so when we call upon our legislators to create a level playing field, we don’t suggest that “more regulations for others is good.” But as long as our leaders in Sacramento keep on the books a legal expectation for our industry and drivers to have motor carrier permits, proper insurance and other health and safety certification, we believe that others performing this role shouldn’t be allowed to get a free pass. Not only is that unfair to our hard-working businesses and employees, it sets a very dangerous precedent for drivers on our highways and local streets. Why should some drivers and companies abide by highway and motor carrier rules and others not? That is simply irresponsible and puts all of our citizens literally in harm’s way.
Moreover, we need better clarification of what is (and what is not) defined as an “independent contractor” and “employee”. The ruling with Uber is a step in the direction of better determining that, but we still need more specific understanding of that from California leaders. Employers in our industry generally strive to do the right thing but in many cases are unable to make sense of employment classifications because of confusing, duplicative or outdated laws and definitions – and then government plays “gotcha” with hefty fines or penalties. The legislature has taken big steps in the direction of giving businesses a right-to-correct period and clarifying complex regulations and laws – take recent ADA lawsuit reform as a recent example. All we are asking is for more black and white and less grey in understanding employment classes. That’s a win-win for government and the private sector.
We look forward to and embrace an ever-growing marketplace and roadway landscape full of all types of motorists – small delivery companies, Ubers, taxis, energy-efficient trucks and innovative new means of transportation that we have yet to witness. But as the Governor and Legislature begin to fix their focus on mending our potholes, streets and highways, let’s not forget the importance of California’s messenger, courier and delivery businesses that travel those roads and the enormous impact they make to jobs and our economy through a level, fair and productive landscape.