Human Capital: Uber and Lyft’s ongoing battle with the law and a brief history of diversity at Snap

Welcome back to Human Capital (formerly known as Tech at Work), which looks at all things labor in tech. This week presented Uber and Lyft with a fresh labor lawsuit as a judge heard arguments from Uber, Lyft and lawyers on behalf of the people of California in a separate suit brought forth by California’s attorney general. Meanwhile, Snap recently released its first-ever diversity and inclusion report — something the company had been holding off on doing for years. 

Below, we’ll explore the nuances and the significance of these lawsuits, as well as Snap’s track record with diversity and inclusion. Let’s get to it.

Gig life

CA Superior Court Judge Ethan P. Schulman heard arguments regarding a preliminary injunction that seeks to force Uber and Lyft to reclassify their drivers as employees

In May, California Attorney General Xavier Becerra, along with city attorneys from Los Angeles, San Diego and San Francisco, sued Uber and Lyft, alleging the companies gain an unfair and unlawful competitive advantage by misclassifying workers as independent contractors. The suit argues Uber and Lyft are depriving workers of the right to minimum wage, overtime, access to paid sick leave, disability insurance and unemployment insurance. In June, plaintiffs filed a preliminary injunction in an attempt to force Uber and Lyft to comply with AB 5 and immediately stop classifying their drivers as independent contractors.

This week, more than 100 people tuned in to the hearing regarding the preliminary injunction. The hearing, held on Zoom, initially was only able to hold just 100 people. But the interest in the case forced the court to increase its webinar capabilities to 500. There hasn’t been a ruling yet, but Judge Schulman said we could expect one likely within a matter of days, rather than weeks.

In the hearing, Schulman expressed how hard it is to determine the impact of a preliminary injunction in this case. For example, how Uber and Lyft would comply with the injunction is unknown, as are the economic effects on drivers, such as their ability to earn income, the hours they would be able to work and their eligibility for state benefits, Schulman said.

“I feel a little bit like I’m being asked to jump into a body of water without really knowing how deep it is, how cold the water is and what’s going to happen when I get in,” he said.

Here are some other key quotes from the hearing:

Rohit Singla, counsel for Lyft

The proposed injunction would cause irreparable injury to Lyft and Uber, and would actually cause massive harm to drivers and harm to riders.

Matthew Goldberg, deputy city attorney for San Francisco

We think the parties have drastically overstated precisely what they would need to do to be in compliance with the law.

The other lawsuits against Uber and Lyft

Earlier in the week, California Labor Commission sued Uber and Lyft in separate lawsuits. The goals of the separate suits are to recover the money that is allegedly owed to these drivers. By classifying drivers as independent contractors rather than employees, both Uber and Lyft have not been required to pay minimum wage, overtime compensation, nor have they been required to offer paid breaks or reimburse drivers for the costs of driving.

What these lawsuits share is a core focus and argument that Uber and Lyft are misclassifying their drivers as independent contractors and breaking the law. These two companies have been sued many, many times for their labor practices, specifically as they pertain to the classification of their respective drivers as independent contractors. What’s different about the latest string of lawsuits is that they’re coming in light of a new law that went into effect in California earlier this year that is supposed to make it harder for these gig economy companies to classify their workers this way. The lawsuits are also coming from legislative bodies, rather than from drivers themselves. 

This moment has been a long time coming. Uber faced its first high-profile labor lawsuit back in 2013, when Douglas O’Connor and Thomas Colopy sued Uber for classifying them as 1099 independent contractors. Uber settled the lawsuit several years later in 2019 by paying out $20 million to O’Connor and Colopy, as well as the other class members

Stay Woke

Snap finally releases a diversity report

Snap, after declining to release diversity numbers for years, finally decided now was the time to make them public. Before we jump in, let’s take a quick look at Snap’s history with diversity.

2016: Snap came under fire for a couple of filters that many people called out as being racist. The first was a Bob Marley filter that basically enabled some sort of digital blackface. The second time it had to do with a lens that was supposed to be a take on anime characters. Instead, there was an outcry about Snapchat enabling yellowface.

2017: “We fundamentally believe that having a team of diverse backgrounds and voices working together is our best shot at being able to create innovative products that improve the way people live and communicate. There are two things we focus on to achieve this goal. The first—creating a diverse workplace—helps us assemble this team. We convene at the conferences, host the hackathons, and invest in the institutions that bring us amazing diverse talent every year. The second—creating an inclusive workplace—is much harder to get right, but we believe it is required to unleash the potential of having a diverse team. That’s because we believe diversity is about more than numbers. To us, it is really about creating a culture where everyone comes to work knowing that they have a seat at the table and will always be supported both personally and professionally. We started by challenging our management team to set this tone every day with each of their teams, and by investing in inclusion-focused programs ranging from community outreach to internal professional development. We still have a long and difficult road ahead in all of these efforts, but believe they represent one of our biggest opportunities to create a business that is not only successful but also one that we are proud to be a part of” – Snap’s S-1

2018: A former Snap engineer criticized the company for a “toxic” and “sexist” culture. Snap CEO Evan Spiegel later said the letter was “a really good wake-up call for us.”

2019: Snap hired its first head of diversity and inclusion, Oona King. King previously worked at Google as the company’s director of diversity strategy.

June 2020: Spiegel reportedly said in an all-hands meeting the company will not publicly release its numbers. Snap, however, disputed the report, saying it would release that data.

August 2020: Snap releases its first-ever diversity report showing its global workforce is just 32.9% women, while its U.S. workforce is 4.1% Black, 6.8% Latinx and less than 1% Indigenous.

Snap’s numbers are not good, but also nothing out of the ordinary for the tech industry. What’s novel about Snap’s report, however, is the intersectional data breakdown. You’ll note that the representation of Black women (1.3%) is lower than the representation of Black men (2.8%). The same goes for all race/ethnicity categories. Across all distinct races, there are more men than women. Again, this is not good, but it’s to be expected, unfortunately.

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