In the summer of 2019, Uber, Lyft and other companies that use contract drivers faced a crisis in California. The State Legislature was poised to pass a law that would effectively require them to treat their drivers as employees, meaning the gig companies would have to pay drivers a minimum wage, cover their expenses and contribute to state unemployment — all significant new costs.
Desperate for a way out, the companies pushed legislators to exempt their drivers from the new law, saying they faced huge economic losses. But they wanted the backing of the state’s unions for the exemption, and promised to extend some new benefits for drivers if the unions got on board.
So Uber brought in a team of high-powered consultants, including one whose connections with organized labor were unimpeachable: Laphonza Butler, the former president of California’s largest union, a branch of the Service Employees International Union.
Ms. Butler, working through a prominent California consulting firm, advised Uber on how to deal with unions like the Teamsters and S.E.I.U., and sat in on several face-to-face meetings between the gig companies and union representatives, according to those familiar with the negotiations.