BC’s Plan to Regulate the Gig Economy Could Be the Start of a Long Fight

An Uber driver's vehicle is seen in Vancouver on Jan. 24, 2020. (Darryl Dyck/The Canadian Press)

British Columbia is developing a plan to regulate its gig economy, which includes drivers for ride-share and delivery apps such as Uber, as well as independent contractors in many fields.

Similar attempts at regulation in other jurisdictions have led to years-long legal battles and calls for amendments, most notably in California, which was one of the first to try to make gig workers get employee status.

While regulations aim to provide gig workers with the benefits and protections afforded to “employees,” forcing gig workers to lose their status as “independent” contractors has had wide-ranging impacts on some workers, businesses, and entire economies.

“Not every worker does gig work as their main thing. Some even like the flexibility of having to, say, drive for Uber only during the weekends,” said Supriya Routh, a professor at the University of British Columbia’s Peter A. Allard School of Law, in an interview with The Epoch Times.

“I think the government needs to understand that the priorities, considerations, aspirations of these different categories of gig workers … are different. That nuance must be there in the law. Otherwise I don’t think the law is going to be very effective.”

B.C. has held roundtable discussions with various stakeholders, including ride-share workers, in recent months. It has also gathered public input through an online survey, which closed Jan. 6. B.C.’s Ministry of Labour told The Epoch Times that it is reviewing the input and will soon release a report on what it learned.

“It is imperative that we learn from other jurisdictions, but our focus is on a Made-in-BC approach,” a ministry spokesperson said via email. “The government acknowledges that misclassification is a core concern.”

In Canada and other countries, the gig economy is growing rapidly. Statistics Canada released data on Jan. 6 showing that 79,000 Canadians had provided rides through platforms such as Uber in the past year, and 207,000 had provided delivery services through apps.

Another 141,000 Canadians do other gig work that Statistics Canada looked at, including content creation, web design, and tutoring. The majority, 58.4 percent, of these gig workers are women.

The Long Fight in California

When legislation in California, Assembly Bill 5 (AB 5), went into effect at the beginning of 2020, The Epoch Times heard from a range of people whose livelihoods were impacted, including freelance musicians, wedding planners, and caterers.

Prohibiting the use of independent contractors, even though some exceptions were built into the law, had wide-ranging impacts.

“AB 5 forces schools and sports workers into complicated employer-employee relationships that neither side may want,” Tim Hoy, superintendent at United Christian Academy, said in an interview at the time.

Many coaches, for example, are contractors who work part-time. “AB 5 forces everyone to treat athletics as a business endeavour, instead of something we participate in for the good of students,” Hoy said.

Wedding planner Michelle Garibay told The Epoch Times that AB 5 has impeded her business operations.

“This industry isn’t well-suited to having employees, because the work isn’t steady,” she said. “The contractors I have working for me have their own businesses as well, and they’re moms with kids—they left full-time employment to be able to have the freedom to work as a contractor.”

The effects of AB 5 and the fight over it have not gone away. Just this month, a CNBC survey found that supply chain managers are wary over trade in California because of the gig worker law. About 40 percent of those who moved their trade away from the West Coast cited concerns with the employment status of drivers due to AB 5 as one of the reasons.

Last summer, California’s independent truckers went on a week-long strike to fight AB 5. Unloaded shipping containers piled up at the Port of Oakland in San Francisco Bay, America’s ninth-busiest container port.

After AB 5 went into effect, legislators worked for months to add amendments for various professions. Uber, Lyft, and other ride-share companies successfully lobbied for Proposition 22, a ballot measure that exempted them from treating their workers as employees under AB 5—exactly the workers the law was originally intended to help.

That started a years-long legal battle. In August 2022, a county court ruled that Proposition 22 was unconstitutional. The decision was appealed, however, and an appellate court heard the case in December. A decision has not yet been announced.

‘Robust Set of Rights’

B.C. will have to grapple with how to define which workers should be employees and which should remain independent contractors. In California, this was done using the ABC test, which met with opposition from some who said it wrongly classified them as employees when they wished to remain contractors.

The three-pronged criteria touched on (A) how free they are from the control of the hiring company, (B) how closely related their work is to the usual type of work done by the hiring business, and (C) how independently they are established in their given trade.

“If the B.C. government ends up setting up a robust set of rights for gig workers, I think that will be a good thing,” Routh said. “But I would also expect a pushback from corporations.”

He added that it’s not just corporations, but that mom-and-pop operations that hire local drivers contractually may also be impacted. He said small businesses should also pay employees fairly, but special consideration should be given for the impacts a big change in business model could have on them.

Uber did not reply to The Epoch Times’ request for comment by the time of publication. Its most recent statement on the matter, published December 2022, defends Proposition 22.

“Gig workers have clearly said time and again that they want the flexibility of being an independent contractor with the new benefits and protections provided by Prop 22,” the statement said.

AB 5 did spur Uber to offer its drivers a guarantee of 120 percent of minimum wage on the hours they’re driving, as well as about US$400 monthly for health care and some additional insurance.

Brice Sopher, vice-president of Canadian advocacy group Gig Workers United, told The Epoch Times these kinds of benefits are “lower than what an employee would have.” They are relative to the number of hours you work, he said, but only based on hours you are driving and not the majority of your time, which is spent waiting for rides.

“If we say ‘OK, well, Uber is giving a little bit,’ we’ve said there’s now a new standard, a lower standard,” he said.

Lyft referred The Epoch Times to a set of policy papers that outline similar benefits to those offered by Uber. The papers are based on its models in California and Washington, which also rolled out gig worker laws last year.

The Long Fight in Ontario

Although a minimum wage guarantee does not exist for ride-share drivers in B.C., it does in Ontario, but some drivers say it did more harm than good.

When the Ontario government guaranteed app-based drivers a minimum wage of $15 per hour for their time engaged in driving last year, Gig Workers United condemned it.

“In other places where app employers have successfully lobbied for a minimum wage for engaged time only, app-based workers have ended up earning less,” it said in a release.

A class-action lawsuit against Uber has been working its way through Ontario courts for years. Initiated by Uber driver David Heller in 2017, the case shows the complexities involved in deciding the legality of gig worker contracts and classifications.

The drivers are seeking $200 million in compensation and $200 million in punitive damages on behalf of the tens of thousands of Ontario residents who have driven for Uber since 2012. It argues the drivers should be considered employees.

The case was delayed, in part by an arbitration clause that Uber had worked into its contract with drivers. The clause stated that Heller and others could not sue Uber in Canadian courts, but rather would have to take the arbitration case before the International Chamber of Commerce in the Netherlands—a great expense for someone who earned between $400 and $600 weekly, the Supreme Court of Canada said.

The Supreme Court ruled that this clause was unfair and thus invalid. With that matter settled, the class action has resumed its progress.

In both Ontario and B.C., unions have gotten involved in the talks, with varied success.

Flexibility

Uber and Lyft say the vast majority of their drivers value flexibility highly. A Lyft policy paper titled “Benefits 101” says: “Separate research groups out of UCLA and Harvard have found that flexibility can be worth as much as 40% of earnings—that is, a driver would need a 40% pay raise to consider abandoning rideshare work for a job that isn’t flexible.”

Lyft did a survey of its drivers in B.C., determining that 100 percent of them work or study outside of their Lyft work, and that 97 percent of them work less than 20 hours per week through the company. A flexible schedule is very important to 88 percent of them.

Uber has done similar surveys in Australia—which is currently reviewing its labour laws to also establish gig worker regulations—and California. Uber commissioned a survey in Australia last year which found that “flexibility is crucial to rideshare and delivery drivers, with nine in 10 saying they would not keep driving or delivering if that flexibility did not exist.”

However, flexibility could come at a price, Routh says.

“In the name of flexibility, to deny them other entitlements—such as paid holidays, minimum wages, pension, insurance, against accidents, and so on—I don’t think that’s a proper way,” he said, referring specifically to the gig workers who treat it as their full-time job. “Flexibility is not a good enough benefit that it should cost them all of these other entitlements.”

Sopher of Gig Workers United said, “Flexibility is a myth, because we don’t have a predictable source of income.”

“Instead of having my work working around my life, my life ends up bending around gig work,” he said.

Routh says that while the B.C. government’s efforts to get feedback from workers and others is “a good step,” it’s not a panacea.

“I’m not in any way suggesting that everything is going to be great once the government understands what the problems of gig workers are and once their entitlements are consolidated as legal rights,” he said. “There will be problems.”

Jamie Joseph contributed to this report.