Proposal to classify certain gig workers as contractors amended, advanced

A bill that would codify ride-share drivers as independent contractors in state law was expanded to include other delivery drivers before advancing to final reading after a successful cloture motion Feb. 19.

LB229, as introduced by Syracuse Sen. Bob Hallstrom, would add workers who use technical applications for marketplace network platforms, such as Uber and Lyft, to an existing list of workers who are classified as independent contractors and are excluded from the state’s Employment Security Law.

Hallstrom introduced an amendment on select file, adopted 32-16, that would remove from the definition of marketplace network contractor a person transporting freight, sealed or closed envelopes, boxes, parcels or other similar sealed or closed containers for compensation.

He said the amendment seeks to also classify food delivery drivers, such as those delivering for DoorDash, as independent contractors. Food delivery drivers decide if, when and where they are going to work, Hallstrom said, and that is the foundation of independent contractor status.

“[The amendment] will carry out the original intent of the bill and make a good bill better,” he said.

Columbus Sen. Mike Moser supported the bill and the amendment. Classifying ride-share drivers as employees could result in increased costs for app users, he said.

“Right now, [ride-share applications] give competition to the traditional forms of taxis … and give consumers another choice,” Moser said. “Making [drivers] employees would make it a higher-cost model and the cost of riding Uber and Lyft would go up.”

Sen. Danielle Conrad of Lincoln opposed the bill, questioning the necessity of classifying ride-share drivers as independent contractors in state law. Drivers and companies already can establish such a relationship, she said, but lawmakers shouldn’t cut off other options.

As an example, she shared an article written by the CEO of Uber that characterized ride-share drivers as neither employees nor independent contractors. Instead, Conrad said, the company called for states to establish a unique model to provide drivers with the flexibility of an independent contractor and the protections of an employee.

Conrad filed a motion to recommit LB229 to the Business and Labor Committee, which failed on a vote of 14-34.

Omaha Sen. Dunixi Guereca also opposed the measure. The amount a ride-share driver can earn is established by the platform and often fluctuates, he said, making it difficult for drivers to anticipate what they will earn for providing their services.

Platforms control pricing, wages and access to jobs, Guereca said, making drivers employees in everything but name.

“If they were truly independent, they would have control over their employment,” Guereca said. “But the reality is that their access to this work relies solely on these platforms.”

After four hours of debate over two days, Hallstrom offered a motion to invoke cloture, which ends debate and forces a vote on the bill and any pending amendments.

The motion was adopted on a 33-16 vote, the minimum number required. Lawmakers then voted 33-16 to advance LB229 to the final round of debate.