Uber CEO balks at unionization, complicating path for state

Uber CEO Dara Khosrowshahi unequivocally rejected the idea of allowing Uber drivers to unionize, a stance that could complicate Gov. Gavin Newsom’s efforts to facilitate a deal between tech companies and labor.

“I wouldn’t support unionization because I think it makes things very difficult for the company,” Khosrowshahi said in an interview with Axios, warning that unionization would mean “the union becomes another power center.”

A 2018 California Supreme Court decision dictating that more workers are employees, rather than contractors, spurred numerous industries to seek carve-outs as Sacramento debated a bill enshrining that ruling into law. Uber and other gig economy companies were unsuccessful in winning an exemption and responded by channeling $110 million toward a 2020 California ballot initiative to keep their worker’s contractors.

Tech companies had negotiated with organized labor, under the auspices of the Newsom administration, for a compromise that would create a route for workers to collectively bargain. Newsom has said he wants those talks to continue. The governor has repeatedly said negotiations offer a chance for California to develop a new bargaining route that circumvents federal labor regulators, which under President Donald Trump have repeatedly opined against gig workers being allowed to unionize.

While tech companies have proposed a novel form of employee organizing known as “sectoral bargaining,” union officials and their legislative allies have been adamant that they would reject an offer short of full unionization rights.

Newsom’s chief of staff, Ann O’Leary, said in August that the administration’s position has always been having drivers “represented by real unions with real collective bargaining rights.”

Assemblywoman Lorena Gonzalez (D-San Diego), a labor ally who carried the bill cementing new classification standards in law, said on Twitter that Khosrowshahi’s comments contradicted Uber lead counsel Tony West, who she said offered the possibility of a union.

“They talk in doublespeak all the time,” Gonzalez told POLITICO.

Uber spokesperson Davis White told POLITICO Monday that nothing had changed, noting the company had not previously backed full unionization. “The previous offer to include sectoral bargaining in the proposal speaks for itself,” White said.