A bill advancing in the Colorado Senate would require companies such as Lyft, Uber and DoorDash to disclose how much money they are pocketing versus how much their drivers are earning and give drivers more recourse when they are terminated from an app-based platform.
Sponsored by Democrats, the legislation aims to empower both drivers and customers by arming them with more information about the financial arrangement between driver and company.
Colorado’s gig worker transparency push comes amid a national debate over protections for independent workers — who now account for more than a third of the workforce — that is playing out at the city, state and federal levels, as well as in the courts.
Sen. Robert Rodriguez (D), the prime sponsor of the Colorado bill and chair of the Business, Labor and Technology Committee, said in a statement after the bill advanced out of his committee this month that “drivers and customers alike are left in the dark about how much of the customer’s fare goes directly to the driver and how much profit a company collects.”
“Senate Bill 98 provides drivers the transparency they need to make informed decisions about their work and better plan their finances, and offers customers an understanding of where their money is actually going,” he said.
Under the bill, before a driver accepts a gig the digital platform would have to provide them with an estimate of the total fare the customer would pay and what the driver could expect to earn.
Additionally, companies would be required to provide drivers with a weekly report that calculates, among other things, their hourly net pay and hourly minimum wage. The companies would also have to inform drivers of any temporary bonus or incentive payment program available, sometimes known as a “quest” or “challenge.”
Similarly, customers preparing to tip their driver would get a breakdown showing how much of the fare or fee is going to the driver.
Unlike traditional taxi rides, which are billed based on a per-mile or per-minute fee, ride-share and delivery apps use pricing algorithms. Backers of the bill say the goal of the transparency measure is to shed some light on how those algorithms work.
“The tech giants of the economy that we’re living in have an excessive amount of power because of those algorithmic black boxes that we don’t get to see into,” said Colorado Rep. Stephanie Vigil (D), a House sponsor of the bill who also works as a gig-app delivery driver.
“I think [the bill] starts to shift some of the power balance so that we have control over our own information, over our own work,” Vigil said.
The bill also aims to protect drivers who are booted from a platform, sometimes without notice or an explanation. It would create new rules outlining the circumstances under which a driver could be terminated and establish a formal appeals process.
At a recent hours-long public hearing on the bill, a long lineup of drivers and their advocates voiced concerns and frustrations with the current industry rules of the road. One complained of “unconscionable” work conditions. Another said her pay has been declining even as fares increased.
The companies countered that the proposed law is “built on a deep misunderstanding” of their business models and said the measure would create “unprecedented compliance challenges” and lead to higher prices.
In a statement to Pluribus News, the delivery company DoorDash said it supports the overall goal of the bill but called the proposal “unnecessary and unworkable.”
“This bill was drafted without a firm grasp of the way platforms like DoorDash operate, and it demonstrates a lack of understanding about the priorities of Colorado Dashers and customers,” the company said.
TechNet, an industry trade group whose members include DoorDash, Instacart and Uber, also expressed concerns.
“Any legislation must support, not hinder, the important roles independent workers and transportation and delivery platforms have on Colorado’s economy,” Ruthie Barko, TechNet’s executive director for the central U.S., said in a statement.
The ride-hailing app Lyft called pay transparency and driver deactivations “important issues” and pointed to steps the company has already taken to give drivers more earnings information and along with appeals rights if they are deactivated from the platform.
Following the public hearing, several amendments were made to the bill and Rodriguez, the prime sponsor, said he remains open to continuing to rework it as it moves through the legislative process.
The ride-share and delivery app industry continues to fight to have gig drivers codified as contractors, not employees. But that road has been bumpy.
Last year, the courts blocked an industry-backed ballot measure in Massachusetts from going before voters. There is an ongoing legal fight in California over the constitutionality of a voter-approved ballot measure that defined rideshare and delivery drivers as independent contractors. The industry has also attempted to get bills passed in New York and other states to enshrine gig drivers’ status as non-employees while setting up a collective bargaining system.
One state where the industry has made legislative headway is Washington, where last year Gov. Jay Inslee (D) signed a first-in-the-nation law that grants minimum pay and paid sick time for ride-share drivers while keeping their status as contractors.
Industry-watchers once again have their eye on Massachusetts, where competing measures have been filed. Unions are behind a pair of bills that would give ride-share drivers collective bargaining rights along with other benefits such as minimum wage. Two industry-backed bills would give drivers access to portable benefits and enact a version of the ballot measure that was sidelined by the courts.
Minnesota lawmakers are also expected to consider legislation this year related to gig drivers.
Colorado’s different approach is by design, said Vigil, the gig-driver-turned-lawmaker, who noted that drivers are not united over whether they want to be considered contractors or employees.
Instead, Vigil said, the goal of the Colorado transparency bill is to help drivers achieve the promise of gig work — namely the ability to earn a living while having more independence and flexibility.
“And if you don’t have enough information to do that … that promise isn’t being realized,” Vigil said.