Uber, Lyft and Others Move to Head Off Unions

“If I want to work 20 minutes a week, or 30 hours, I can do that,” says one worker in the ad. “When I need a day off to study for a big exam, I can do that,” says another.

The new advocacy effort by the app-based companies comes as some lawmakers in Congress and in statehouses push measures to reclassify their part-time workers from independent contractors to employees who would be eligible for additional company benefits and be permitted to join labor unions.

Kristin Sharp, the chief executive officer of the advocacy group, called Flex, says the industry’s business model is based on using independent contractors to hold down labor costs—and the fees charged to customers. The average app-based worker spends about eight hours a week on the job, according to the industry’s data.

“Workers are voting with their feet and are flocking to app-based work because it gives them better work-life balance,” Ms. Sharp said. “Our big-picture goal is to ensure that people who want to be flexible can do so.”

The group said it plans to spend more than $1 million on the ads.

Labor unions say that Uber UBER -4.22% and other gig-economy companies exploit their workers by not giving them enough hours on the job to qualify for healthcare and other benefits.

They have the support of Democrats in Congress and President Biden, who in last week’s State of the Union address called on Congress to approve the Protecting the Right to Organize (PRO) Act, which has a provision that could reclassify some part-time, app-based workers as traditional employees.

“When a majority of workers want to form a union, they shouldn’t be stopped,” Mr. Biden said.

The new campaign echoes one that Uber, Lyft and others fought in California in 2020.

The California Legislature in 2019 enacted a law that created a three-step test to determine whether workers should be considered independent contractors or employees.

The companies responded by qualifying an initiative for the November 2020 ballot to exempt drivers from the law. Uber, Lyft and other supporters heavily outspent labor groups and other opponents, and the initiative passed with 59% of the votes in the majority-Democratic state. Appeals of the measure are working their way through the courts.

The industry has waged other battles over employee benefits in Miami, New York and Massachusetts. Now it is turning its focus on Washington, where Mr. Biden and congressional Democrats are increasing their calls to pass the PRO Act. The measure would create new labor rules, increase fines on companies that are found to violate labor laws and generally make it easier for workers to form labor unions.

The House approved the legislation last year, but it has stalled in the Senate. Union leaders and top Democrats say they believe it could win Senate approval partly because it has been endorsed by Sen. Joe Manchin (D., W.Va.), a key Democratic vote who has blocked some of Mr. Biden’s other priorities.

The creation of the new industry group shows how advocacy from Silicon Valley tech companies is evolving as internet companies’ priorities diverge.

Some of Flex’s members had previously been members of the Internet Association, a trade group created to give internet companies a unified voice in Washington. That group also represented such giants as Alphabet Inc.’s Google and Meta Platforms Inc.’s Facebook. The association dissolved last year amid tension over its members’ conflicting priorities on competition policy and other issues.

A separate group of companies including Snap Inc. and Reddit Inc. created their own group in 2020 to lobby against proposed changes to Section 230, a law shielding apps and websites from liability for hosting user-generated content.

Write to Brody Mullins at [email protected] and Ryan Tracy at [email protected]