A woman rides a Lime dockless electric scooter on Market Street on Tuesday, April 17, 2018. (Kevin N. Hume/S.F. Examiner)

SF e-scooter companies may use permit loophole to skirt hiring requirements

Roughly a hundred years ago, on any given dock, on any given day in San Francisco, waterfront workers would line up under the chilly fog hoping a boss would jab a finger their way and hire them for a job. Reminiscent of kids picking kickball teammates, the daily ritual came with far higher stakes — the very wages in workers’ pockets and the food on their plates.

This infamous old practice – called a “shape up” – partly inspired San Francisco’s 1934 General Strike that brought The City to a standstill, saw two workers killed, and immortalized labor leader Harry Bridges in the history of the Golden Gate.

Now the shape up is back, courtesy of the tech industry, San Francisco leaders say.

Five members of the San Francisco Board of Supervisors have co-sponsored a non-binding policy resolution calling on The City’s transportation agency to require e-scooter companies to directly hire employees.

That’s because at least three of four newly permitted e-scooter companies indicated on city paperwork that they’ll use tech-enabled “staffing agencies,” which hire employees via cell-phone app. Often these employees are driving San Francisco streets to redistribute e-scooters in neighborhoods where they’re lacking or swap out batteries on dead e-scooters.

These agencies then employ an algorithm — almost like a digital boss — to select which staffers are sent to which employers.

Shape up, for the digital age.

Lawmakers are worried this means the workers will be more vulnerable and lack some benefits granted to full-time employees, like health care. It also may be a barrier to unionization, the Teamsters Union warned lawmakers.

“While we share an imperative to provide alternative transportation modes and reduce vehicle miles traveled, we cannot be complicit in undermining labor protections,” Supervisor Aaron Peskin told his colleagues at City Hall Tuesday when he introduced the resolution.

Board of Supervisors President Norman Yee, and Supervisors Ahsha Safai, Vallie Brown, and Sandra Fewer have committed to co-sponsoring the policy resolution.

Of four permitted e-scooter rental companies, Lime, JUMP, Spin, and Scoot, only Spin has definitively claimed they will not use such staffing agencies. In fact, a Spin spokesperson told the San Francisco Examiner, they will encourage unionization of their staff.

Scoot, Lime and Uber-owned JUMP all described using “staffing agencies” or a singular “staffing agency” in their SFMTA permit applications.

The San Francisco Municipal Transportation Agency awarded those companies with permits to operate e-scooter rental programs last Wednesday, and those two-wheelers are expected to hit the road on October 15. SFMTA required each of these companies to submit a “labor harmony” plan, which was first developed by the Teamsters Union in conjunction with San Francisco lawmakers.

And on a media rollout of the e-scooter permits last week, SFMTA staff touted their requirements that e-scooter companies hire full-time employees who must file W2 tax forms, instead of vulnerable independent contractors who often don’t receive health care or workplace protections under local, state and federal law.

The use of temp agencies, however, wasn’t mentioned in that media rollout.

Indeed, lawmakers now feel SFMTA was out-maneuvered by tech companies. Flimflammed. Hoodwinked. Fooled.

When asked if that labor harmony plan bars full-time use of temp agencies, SFMTA Acting Director Tom Maguire said it only requires that worker actions will not “disrupt” safety or public right of way, like when sign-carrying workers protested corporate commuter shuttles on Valencia Street in recent years.

Requiring e-scooter companies hire directly, and not use temp agencies, may be legally thorny.

“We strongly support labor organizing,” Maguire said, but “we have to be careful we don’t get into an area of labor law that is outside our purview.”

While no San Francisco e-scooter company would confirm which companies they contract for these temp agencies, Peskin specifically called out Chicago-based Bluecrew as one such temp agency. Adam Roston, CEO of Bluecrew, confirmed to the Examiner his company has been hired by at least one San Francisco-based e-scooter provider.

Roston defended his company, saying “we’re pretty different than most of the gig companies you hear about.”

He emphasized the flexibility the Bluecrew app offers companies. They can staff up when need is high, and workers can go elsewhere when jobs are available. “What we’re replacing and why everyone is so excited,” he said, is the worker’s burden of frequently sending dozens of job applications.

Roston said workers will be W2 employees with all the legal benefits that come with that status, including minimum wage. However, when asked how many of his employees receive health care, he said “I don’t actually know the percentage. I wouldn’t say it’s most.”

And when asked if employees working for Bluecrew could unionize, he said “I don’t know, to be honest, the legal details behind everything in regards to unionization. It’s not come up, to be honest.” He declined to comment when asked if he supports unionization.

Temp agencies may leave workers vulnerable, said Veena Dubal, an associate professor of law at UC Hastings College of the Law. Dubal focuses primarily on the intersection of technology and emerging legal frameworks that impact workers, including ride-hail drivers.

“It’s a step above being an independent contractor but it’s very precarious,” Dubal said of these tech-industry temp workers. “They’ll get minimum wage because they’re employees, but they’re not going to get health care.”

Companies like JUMP or Lime also won’t be legally responsible for those employees, she said.

“I think it’s a workaround,” she said. “It’s taking the letter of the law, and working around that letter to have a more precarious workforce.”

Roston disagreed. Bluecrew’s algorithm is “data-driven, it’s focused on pretty straightforward indicators. Are you skilled for this position? Are you in the right location? How have you performed on our platform?”

Mark Gleason, a member of the Teamsters Union who sits on the executive board of the San Francisco Labor Council, recalled the old shape up the practice of the early 1900s when speaking of the e-scooter companies hiring by algorithm.

Both leave little recourse for workers, he said.

“When Harry Bridges was famously forming the longshoreman’s union, that was one of their main concerns,” Gleason said. The only difference now is “the tech firms have ‘reinvented’ that on an app.”

It’s a “disruption” as old as the docks of the Bay.


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