[gavel] >> the meeting will come to order. welcome to the june 28, 2019 special meeting of the public safety and neighborhood services committee. i'm chair of the committee. to my right is vice chair stephanie and to my left is supervisor walton. our clerk is john. i would like to thank those at s.f. gov. tv for staffing this meeting. >> please be sure you have silenced your cell phone and any other electronics devices. and any documents should be submitted to the clerk.

items acted upon will appear on the july 9th, 2019 meeting. we have overflow seating downstairs for those folks who need to have a seat. >> chairman: just to repeat, there is overflow seating downstairs. we have to get to one item of business before we get to the hearing on gig workers and the gig economy. so if folks do want to spend some time down there, that would probably make things a little easier for our deputy sheriff and for our clerk. okay. mr. clerk, please call our first item. >> i will. agenda item number one is a hearing to consider the premise to premise type 21 off-sale general beer and liquor licence to llc, doing businesses at cloud kitchens, will serve the public with the necessity of the city and county.

>> chairman: great. we have our a.l. u. >> i'm with the san francisco police department. you have before you a p.c. m. report for cloud kitchen. they have applied for a type 21 licence, if approved, it would allow them to sell beer and wine and distilled liquor. there are zero letters of contest and zero letters of support. they're in consensus tract 180. the southern station has no opposition to the license. the petitioner shall actively monitor the area under their control in an effort to prevent the literinloitering of any persons on the property. it should be noted these conditions were agreed to and signed on the 21st of this month. >> chairman: great. i don't see any questions

from my colleagues. thank you. >> thank you. >> chairman: is the applicant or representative here? come on up. >> hi. good morning. >> chairman: good morning. please identify yourself. >> sure. i'm louie conno with conno consulting. >> ronnie leader with cloud kitchens. >> chairman: anything you want to say? you don't have to say anything. and it doesn't look like my colleagues is questions or comments. >> if you have any questions, but it is pretty cut and dry. clairemont greatclairemont>> che a seat. are there any members of the public that would like to testify on this? i see we have a couple, and we have karrie egan, flo sanuki, and dan galvin. i'll ask folks who want to speak to line up over on

your right in the room. i'm going to say some things about public comment. for example, speakers will have two minutes. we ask that you state -- we ask that you state your first and last name clearly and speak directly into the microphone. if you've prepared written statements, you're encouraged to leave a copy with the committee clerk for inclusion in the official file. no plaus o applause or booing allowed. with that, we'll take our first speaker. come on up. >> good morning, supervisors, my name is brian shehe, i'm a member of the san francisco independent business alliance. i'm very concerned about this application for an off-sale type 21 license. our business owns some of these licenses in the area. this is a very unusual use of a type 21 license.

if this license was approved, it would allow cloud kitchens to deliver beer, wine, and all forms of spirits to every corner of san francisco, to every address in san francisco. what's problematic about that is -- there are a couple of reasons. the first is a public safety issue. if anybody goes into a type 21 store right now, they can be carded and i.d.'d to prove they're over 21. cloud kitchens are working with the gig economy. and they partner with caviar. they would pick up the food and the alcohol, and then head on their way and make their delivery. these gig drivers, unfortunately, are not trained on how to validate i.d.s. they're not trained on how to determine if somebody is going to be overserved in alcohol. and caviar drivers are allowed to drive at the

age of 18. so if an 18-year-old picks up the delivery and makes a delivery to a local campus, that's illegal. that driver cannot be under 21. it's also going to hurt the small mo mom and pop operations because cloud kitchens are not required to partner directly with current license holders. thank you, supervisors. >> chairman: thank you. next is speaker. >> hello. good morning. i'm cary egan, and i'm a member of the san francisco business alliance. i'm going to dove tail off of what brian just said. i'm certainly you've read the latest press on this part of our city. it is becoming a ghost town. and that's with its current problems alone. not every business is thriving, but i'm just wondering what message are we sending our current and

future small businesses? a perfect example, coit liquors alone has had to fires. what are we really doing to ourselves in the long-term, is my point. i'm very much opposed to this. >> chairman: thank you. >> thank you. >> chairman: i believe there may be some speakers on item one outside who are trying to get in. can we -- i'm receiving texts that people who want to speak on item one are not able to get in. so...well, i think we want to -- i think we're going to recess this for two minutes while we make sure people who want to speak on this item are able to get in. so we'll come back in >> chairman: okay, we're

reconvening, back to public comment. >> i'm here in support of our small business partners and our members who deliver to them, to oppose the grant of the type 21 off-sale liquor license to cloud kitchens. sorry, i'm out of breath. this is the same argument we made two weeks ago, your committee against amazon prime for the same type of abc license, to prevent them to make unrestricted liquor deliveries throughout the city. in affect, taking the business away from our brick and mortar stores, which make up the fabric of our neighborhoods. thankful on that occasion,

the committee unanimously voted to deny that application. this license would permit cloud kitchens to deliver alcohol to every corner in san francisco from 6:00 a.m. to 2:00 a.m. every day. they are backed by $150 million in venture capital funding, and supports uber clinic as a major owner and driver of this business. please deny this application. thank you. >> chairman: thank you. are there any other members of the public who would like to speak on this item? come on up. >> we had this problem before, this type of controversy, pertaining to a liquor license. and i demonstrated that i got 50% of me favors it, and the other 50% doesn't favor it. the part that doesn't favor it is if you're the

contributing to out of control alcoholics, and don't know how to control the alcoholics in the containers and the littering. so the owner of the liquor store stopped selling the 99-cent bottles of liquor, and the area where his liquor store is location, there is no trash and disposal of the small 99-cent bottles of alcohol. the other 50% of me is legally incorporated on the ground he has a constitutional right, with due process and equal protection under the law, where he has the right to sell alcohol like anybody else in the united states of america. the 14th amendment says right here that any person in the state deprived of any -- any person cannot deprive any person of liberty or property without due process of law or deny any person within

jurisdiction of equal protection under the law. so that means that this owner of the store has the right to sell alcohol. if he is not in violation of no criminal law pertaining to the penal code, he has a constitutional right to sell it. if there is a conflict of interest with his competitors, that's a personal problem. okay? so i move to have this proposal for the owner of the store granted because he is trying to increase his potential business and take care of his business and his employees. >> chairman: thank you. are there any other members of the public who would like to speak on this item before i close public comment? public comment is now closed. [gavel] >> chairman: the matter is before us, colleagues. i understand that supervisor haney is not in support of this application. he has conveyed to me his concerns about protecting

small businesses and promoting active storefronts in the district, which he feels would be undermined by granting the liquor license success are making the finding of a necessity. i share those concerns, as well as the concerns that were raised by the teamsters. and unless there are concerns about that, we could direct our clerk to prepare a resolution finding that grandering of granf this license does not meet public use and necessity. i'll take a motion for that. >> so moved. >> chairman: moved by supervisor walton with positive recommendation. >> i second it and i share those concerns. >> chairman: great. all right. then we will move that forward to the full board with positive recommendation. [gavel] >> chairman: all right, mr. clerk, call the next item. >> agenda item number two is a hearing on the

current state of worker rights in california's gig economy, and to 2018 supreme court's dynemax case. >> chairman: great. thank you. colleagues -- i want to note we have been joined by -- that's about as good as -- >> please don't interrupt. >> chairman: i will try to speak directly into the microphone. we have been joined by supervisor mar. i'm going to make a few remarks, and i think supervisor mar has a few as well. colleagues, today we're going to learn more about a topic of great and growing importance: gig worker rights in the tech economy. corporations relying on gig workers, including uber, lyft, rely on a

model that dismantles more than a century of work rights. gig workers are held to may of the requirements and demands of ath employee-employer relationship without the benefits granted to employees under the law. across digital labor platforms from delivery workers to domestic work, they are drawn to gig work because of the promise of freedom to set their own schedules. but quickly come to find they're working more and earning less and without any social safety net in place to protect them. a 2018 policy institute found that uber drivers average $9.21 an hour. placing these drivers in

the 10th percentile. it falls below the mandatory minimum wage in 13 of 20 major urban markets. without employee status, gig workers working in excess of eight-hour shifts are not entitled to overtime pay. and it leaves workers without unemployment insurance to support them when they lose their income, and without workers compensation to protect them when they get hurt on the job, without health care, without social security to aid them in retirement, without any of the fundamental rights that have been in place to protect workers for more than 50 years. it is estimated that california loses $7 billion every year in tax revenue due to the misclassification of workers. as gig employers shift the cost of doing business on to the worker in the form of non-reimburseable

expenses, like gas and mileage, workers are left barely breaking even, with many confused by opec pay and tip policies that make it difficult to calculate actual earnings. the gig economy is often described as the future of work. in many ways, it is a return to our past and the by-gone days of the prenew deal lockner era. the workplace was built on -- effectively silencing workers and deregulating the economy in the name of the free market. today the gig business model threatens the gains made in the decades that followed. from the social security act of 1935 that brought us unemployment insurance, retirement and disabilities, to the fair labor standards act that created minimum wage and

over-time pay. the consequences of redistribution of wealth that serves the corporate line, but at great cost to the hard-working individuals who provide the services and produce that wealth. but after years of legal challenges and lackluster attempts to regulate the gig economy, gig worker classifications is now the content of legislation in the california state assembly. if passed, ab5 will create a clear and uniform standard for worker classification in the state of california, colfyincolcodifying the 2018 ca, and finally holding these companies accountable to state and local labor laws. there is the first hearing of ab5on july 10th, san francisco should not sit

on the sidelines. san francisco is home to more than 100 gig companies. the prospect of ab5 passage possess significant reservations for the thousands of visitors and those companies employed. i want to thank our labor partners who worked with my office and supervisor mar to organize today's hearing. teamsters, jobs with justice, the san francisco labor council, the national domestic workers alliance, and gig workers rising, and i want to also thank our co-sponsors, supervisor mar and supervisor peskin, walton, haney, and brown for their support. i want to thank aaron mundy in my office who has dug in deep to learn about these issues and get me up to speat, and kyle, and beth, our star intern, who has, for decades, practiced in the area of labor law, and who we are

happy spending a little bit of time in our office. we'll hear presentations from the office of labor standards and enforcement. ken jacobs with the u.c. berkeley centre for education. and miles lockner appearing in his individual capacity, and gig workers rising. and then, of course, from lots and lots of folks who have come out to speak during public comment. we want to thank you for coming to share your stories. first, supervisor mar, i think you have some comments as well. >> thank you so much, supervisor mandelman for calling for this hearing. i wanted to offer some brief introductory remarks. this public conversation is both timely and extremely important, given the explosive and disruptive growth of businesses, many headquartered here in san francisco, relying on non-regular employees, relancers, contractors,

temp workers. it allows them to dramatically lower their labor costs by 30% or more since they are not responsible, as supervisor mandelman has pointed out for gig workers' health benefits, social security, unemployment, or injured workers compensation, lunch or rest breaks, overtime, disability, or paid sic sick, holiday, or vacation leave. a 2016 study found that more than one in three workers, 53 million americans, are now gig workers. other estimates predict within 10 years, nearly a majority of the 145 million employed workers, 65 to 70 million workers will be so-called independent workers. fundamental the, this is about unequal protection for workers in the emerging industries, and unequal pay and treatment for a growing workforce.

the growth of gig workers has been fueled by new technologies and innovation. technology and innovation should act in service to society, but instead we see our economy, our streets, our working class, and our regulations, wholly disrupted by the gig economy, off to the benefit of a few and harm to many. let's be clear: organized labor built our middle class. organized labor fought for hard-won rights for working people. rights are now under threat, denying tens of millions of people the basic rights and protections of employment. as new companies and industries enjoy new levels of wealth and success, we must ensure that the workers responsible nor tha for that success are treated fairly, transparently, and

equally. >> chairman: thank you. supervisor walton. >> i see a big part of my job to be protecting the rights of workers and fighting for equity. people who work so many hours a week should have retirement benefits, pensions, health care, and a guaranteed minimum pay. and i will always fight for this. and i'm looking forward to hearing the data and information, as we know a lot of our gig workers are struggling because they lack certain protections, and that has to change. >> chairman: thank you, supervisor. so with that, i think we will start with pat mulligan from the office of labor standards and enforcement. >> thank you, supervisors, for the opportunity to present today. so the office of labor standards enforcement enforces local labor laws adopted by san francisco voters and the san

francisco board of supervisors. many of the laws apply city-wide to private employers, and other laws apply to city contractors, leaseholders, and others doing business directly with the city and county of san francisco. so some san francisco labor laws that impact good workers, these laws would apply to many private-sector employers within the jursdicted boundaries. that would unconclude san francisco minimum wage, san francisco paid sick leave, health care security ordinance, family-friendly workplace, lacktation in the workplace, consider of salary history, and the fair chance ordinance. it is important to note for the fair chance ordinance, it would be potentially preempted by the california public utilities commission for transportation network companies. that would apply to

transportation services, but not necessarily delivery services, which sa large part of the gig-type economy. and to make it clear that the office of labor standards enforcement holds these workers are employees and eligible to these rights and protections under the law. so office of labor standards enforcement process, this would be for private employment laws, and it would vary slightly for san francisco contract laws, where we're more pro-active. there is a higher burden and different array of laws that might apply. complaints come to our office many different ways: by phone, e-mail, walk-in, snail mail, or any other type of delivery method. they may u come in by affected workers, co-workers, worker advocates, labor organizations,

occasionally completeing businessescompetingbusinesses. and intake is an initial assessment to make sure there is a violation of the law. it is not uncommon to receive complaints from outside san francisco. most of the laws i reviewed wouldn't apply outside of the jurisdiction boundaries. after that, it would be investigation and audit. our office would issue an investigative notice to employers, obtain and review payroll records and payment records, site visits, and an interview of workers, ultimately culminating for the determination of penalties and restitution. employers would be afforded an appeal hearing if they did want to appeal the determination of our office. most of our cases

overwhelming go directly to settlement. finally collections and distribution of restitution for workers. some enforcement challenges that are inherent to the gig economy: first, employers may assert that their workers are independent contractors. and this is a common misclassifications of workers. our office and the state department of labor standards enforcement are familiar with it and have dealt with it on an ongoing basis. next, which further complicates it, employers may creatively identify themselves as simply a marketplace platform, so confusing the relationship between an employer and an employee. for instance, offering that they may not be in the transportation services or product delivery services, they're simply providing a platform that individuals may use discriminately. so almost offering that they are not employers in

this model. also, refusal to provide required data on payments and benefits. this is critical information for our audit process. and lastly, potential litigation. moving forward, office of labor standards enforcement will continue to investigate gig economy companies for violations of san francisco labor laws. office of labor standards enforcement investigations rely on state law to define an employee, including looking to the labor code, wage orders, and court decisions. and with that, legislative actions by the state would impact us. thank you. >> chairman: any questions or comments? supervisor mar? >> director mulligan, i did have a question kind of on your last point, around how o.s.c.'s investigations rely on state law to define

"ememployee." the current state law is the abc law? >> right. >> and the recent ruling says back pay can be owed to misclassified workers going back four years prior to the date of the dynmex case. what would it take for the city of san francisco to issue judgment to get misclassified gig workers the money they are owed. >> it is a great question, supervisor. i appreciate it. that would speak to some of our specific investigations that are ongoing. i wouldn't want to disclose any of the efforts of our office or the city attorney's office towards that. there is some concern around some of the state precedent, which is why

the legislative clarification at the state level would be helpful for our efforts. >> thank you. and just a followup question: what policy questions would need to be answered for you to calculate if gig workers were making san francisco minimum wage? >> we would need to see also the payment records from employers, which in some cases is difficult to obtain. we would have to try to figure it out on an hourly basis. it becomes further complicated when employees might be working in multiple kind of like gig-type roles. they may not be working for a singular employer in those types of situations. but there are some challenges in just obtaining that data. >> uh-huh. and do you -- it seems like we're really moving in that direction with the 85 oab5 on the state level.

do you have any information on how the companies could get the data needed to establish these regulations? >> you know, ultimately, it would end up in litigation. that would be my take. especially given some of the arguments that we're anticipating and have heard around whether, first, misclassification of worker issue. and, secondly, i think what complicates this further is this misclassification of employer position. so the relationship is really muddied around that. and clarification in the courts and through the state legislature would be particularly helpful to our efforts. thank you. >> thank you. >> chairman: any other questions? all right. thank you, mr. mulligan. then i will next call of miles lockier. thank you for being here.

>> let's see if i can get my. >> chairman: are we up and running? >> i -- well, it should

be. it's slide one of 10. okay. >> here we go. good morning and thank you for inviting me. ni nammy name is miles lockier, and i am appearing here today in my private capacity and not officially for the labor commissioner. and the views that i express are mine and not necessarily those of the state labor commissioner. with that, let me start by this: the labor commissioner's office enforces state laws dealing with wages, workers' conditions, and also protections for employees. there are generally two sources of that law, okay? one is the labor code itself, and the other sorgs is whaother isthe i.w.c. the i.w.c.was established

about a century ago. a five-member body that essentially had constitutional authority to establish minimum conditions for labor in the state. and there are about 16 or 17 different wage orders that, taken together, they deal with separate industries, separate occupations, but taken together, they cover all workers in the state of california. now, this is important here, in this discussion, because the i.w.c. orders contain a very specific definition -- very specific destinations of employee and employer. and those definitions have been construed by the california supreme court in the recent dynamics case, to set out a test for determining who is an employee, and who is an independent contractor for purposes of the

protections under those wage orders, okay? now, if we go back to the other source of law, the labor code, there there really is no statutory definition for employee and employer. so instead, what the courts have done is they've used for these many, many protections outside the i.w.c. orders, but inside the labor law, they've -- they've kind of done it in a protective way in a case i'll get to soon, but the differences between the abc test and the multifactor test under borello, are very stark, and you'll see that the protections offered to workers under the much simply, streamlined abc test are very real. and with that, here we

have the definitions and they're very straightforward. aperson employed by an employer -- employed means to engage, suffer, or commit to work. and employer is any business entity who employs or exercises control over the wages, hours, or working conditions of any other person. so you have multiple ways of getting to an employment relationship here. you have exercise in control, you have engaging to work -- there are different tests. now, i'll get to the abc test very soon, but what i want to start to emphasize here -- and this is very important because this is go to show the many protections, the social safety net protections that exist under the i.w.c. orders, that to get

these protections, you have to be an employee. and they are protections that don't exist for independent contractors. you have a definition of hours worked that is very expansive. you have a requirement that employees must be paid no less than the minimum wage for all hours worked. and that's been interpreted by the courts to mean under state law that you have to be paid no less than minimum wage for each discrete task or unit of time. unlike federal law, where you have averaging at the end of the week, and you could have huge periods of time when you're subject to an employer's control where you're not paid. breaking it down with each unit of time and task looked at, did you get paid at least minimum wage for that. under the wag wage orders, you have compensation of

overtime hours. split shift premium. reporting time pay. record keeping requirements so that workers can establish how many hours they worked and what they were paid. the employers have to keep these records. the employer has to provide any required uniforms and necessary tools and equipment to the employees. you can't require the employees to pay for those. under the wage orders, you have protections, required meal periods, required paid rest periods. no deductions of pay for cash shortage, breakage or loss, limits on charges for employer-provided meals and lodging. this is all under the wage orders. okay. so in the case of dynamics, last year, the california supreme courts confronted the issue of what is the task for determining whether a worker is an employee or independent worker for getting those protections

under the wage orders. the court adopted a test that has been statutory enacted in massachusetts, new jersey, and that's called the abc test. we'll get to that. but what the court said, it under the definition of the wage orders, the court should use the abc test. you start with the presumption that any person providing service to another is an employee, and then the burden is on the hiring entity to show, no, this is really an independent contractor. under the abc test, it's a three-part test and each part is determinative, that is, the hiring entity has to prove all three parts in order to establish that someone is an independent contractor. if the hiring entity can't prove any one of these

parts, you have an employee, not an independent contractor. so part "a," the work is free from the control and direction of the hiring entity. both under the contract and in reality. what that means is you're looking under the contract whether there is a right to control, even if the hiring entity doesn't exercise that right. if the hiring entity has that right, you're not going to have part "a." part "b," the worker performs work that is outside the usual course of the hiring entity's business. i would submit if you have a driver for a transportation network company that offers its services to the public to give them rides, from point "a" to point "b," you have a worker performing work that is not outside the usual course of the hiring entity's business. then you have "c," the worker is customarily engaged in an

independently established trade, occupation or business of the same nature as the work performed. so, you know, this is a very streamlined, simple test. now, what i want to get to now is what are the protections? and this i really have to edit myself and cut myself short on because there is a labor code here that is this thick. and these are the protections under the labor code, okay? we could be here for the rest of the day. we don't want to do that. so let me just tell you -- and this is important, again, because these are not under the wage orders. so now the abc test didn't apply here. the common law borello test applies. so these are the protections under the labor code not covered in the wage orders. the right to have claims adjudicated by the labor commissioner. if i have a claim and the labor commissioner determines this person you did work for owes you

money, but this person proved you're an independent contractor, so we can't award you anything. good luck. go to court, file a breach of contract, do whatever you're going to do. two, and this is gigantic: the labor code has dozens and dozens and dozens of anti-retaliation laws that protect laws from being discharged or denied promotions or not hired for engaging in various protected activities, for filing wage claims, for whistle-blowing, for refusal to perform unsafe work, for taking time off to visit a child's school or day care centre ar center, or taking time off for medical treatment. if you take off work and say i have go to medical

treatment, the person who hired you can legally say, you don't work today, you're fired, i don't care what the reason is. i'll stop there. under -- this is under the unemployment insurance code, the employees get unemployment insurance if they're let go. independent contractors don't. workers compensation insurance, anti-discrimination law, all of the laws that prohibit discrimination on the base of race, sex, sexual orientation -- i'm missing some categories, i'm sure -- these cover employees, not independent contractors. occupational health and safety laws. reimbursement of necessary business expenses, and the best example is mileage for the use of a personal vehicle. employees are entitled to that, and independent contractors are not.

requirement for timely payment of wages, right to sick leave, paid sick leave, now under state law, right to attorneys' fees for prosecuting wage claims -- i'll stop there. you've got the idea. the borello case, that is the case that came out in 1989, california supreme court case, and that is still what's used for determining whether you're an employee or independent contractor under outside -- not the wage orders, but under the labor code. unlike the three factor test, abc, fare as far as the hiring entity is concerned, one strike and your out, under borello, you have a very involved multifactofactored test. and to be sure, the supreme court said in

1982, the borello test should be applied with deference to the protective legislation, starting witstarting with the ty of circumstances. so you've got to look at all of these factors. and you have litigation that goes on and on and on. and you're looking at this and looking at that. the factors are here. i don't know if it is worth going through each one. i'll say this: the factors that are in the abc test show up in borello, but there are many other factors that serve to complicate things because some of these factors, in truth, don't really tell you one thing or the other. one of the factors for example is the length of the employment. i get it. one might traditionally say, well, gee, independent contractors get hired for a very short period of time, and employees get hired for a

long period of time. really? remember the movie "on the waterfront," the workers were hired to unload the ship for one day. they weren't independent contractors; they were employees. under the borello test, you have all of these factors that add a little light, but in the end tend to create confusion. borello is a more cumbersome test than the abc test. it results in uncertain and inconsistent legislation. it is more difficult under borello to show commonality. and that's important because when workers try to enforce their rights -- you have to have commonality. they say all of these

things are different, you have to weigh all of the factors for each employee, it is much harder to establish commonality. the abc test is far more worker-friendly. now, having said that, let me say this: before the abc test came into being, okay, we've had cases -- borello has been the law since 1989, and it still is. the abc test didn't destroy borello, it is jut another test, and another way to look at it. before the abc test, cases came before the labor commissioner all of the time, and using this more complicated borello test, the labor commissioner would typically find employee status. there is one case i know

of, maybe five years ago, involving uber, where it was an individual wage claim, and it was heard by a labor commissioner hearing officer, and the defense was made, independent contractor, and the labor commissioner found employee status. but, let me tell you, under the abc test, it is streamlined. it eliminates the doubts, and it provides far greater social safety net for workers. >> chairman: thank you very much. >> thank you. >> there is a thorough grounding in the legal issues. thank you so much for presenting. ken jacobs, u.c. berkeley center for research and education. vice chair stephanie is

having ptsd from law school. good morning, supervisors, members of the public, thank you for inviting me today. i'm going to talk briefly about ab5, the bill in sacramento that would codify the dynamics decision. what we know about gig workers and their earnings, in lessons from a recent policy placed in new york, the li limousine commission on drivers. so what does ab5 do? it codifies the dynamics decision in california law. it is law now for wage orders through the court decision. it codifies that.

it clarifies its application with a few exceptions, basically more highly paid, licensed professionals who clearly control their work and control the price of that work. and then it, importantly -- looking at the points just made, it expands the abc test to cover the labor code, so that is a broader set of protections, and it expands it to the unemployment insurance code. again, making it a more stream-lined way of determination around worker classification. so under that test, i think it is clear, i would argue it is also clear previously, gig workers and labor platform workers would qualify as employees. so what do we know about the gig work force. first i think it is

important to note that the share of workers engage in non-employee relationships, engaged in labor platforms is small but growing. the share of workers in non-employee worker arrangements grew about 2% from 2000 to 2016. the vast majority of those are in labor platforms, and the vast majority of those are in transportation network companies. j.p. morgan chase, a sample of their customer data from 2017, estimated a little less than 2% of families in san francisco receive income from a labor platform, and 93% of those are in transportation. that's of people who live in san francisco. if we go to sho who work in san francisco, there are about 45,000 workers and boweabout 6,000 on the road at peak times. what do we know about

their work? a lot of the discussion is acknowledging many of them work part-time, and it is true about 38%, it's their main job. of the rest, they're split evenly between people who have another full-time job, and they're doing a small amount of numbers on top in order to make ends meet or they have another part-time job. it is the case that the majority of drivers work less than 15 hours a week, but if you flip it and look at who is doing the work, you get a little bit of a different picture. and there we see that about 41% of the work is done by full-time workers. and in the j.p. morgan chase data, they found in among the transportation platforms, about 10% of the workers receive 57% of the earnings. so in terms of where the work is being done, and who is do that work, it is much more concentrated. how much do workers earn?

well, there was a study by holland krueger a couple of years ago that said uber drivers earned an average of $27 an hour before expenses. but you need to take in account two things. one is the laws and benefits working as an independent contractor of all of the things that pat mulligan and miles lockier talked about. if we take the key parts of san francisco's laws, including paid sick leave and the health care security ordinance and then the various protections under state law and the federal share of pay -- the employer share of payroll taxes, an independent contractor what need to earned about $21.50 an hour to equal the minimum wage in san francisco. in terms of operating

expenses, we have a wide range, from vehicle registration to appreciation, leasing, gas, taxes -- if you're a t.n.c. driver, that is also cell phone data. and the average rate is 58 cents a mile. it is a good measure of the cost. as supervisor mandelman said earlier, the average driver earns less than $12an hour after all of the expenses. a recent study of drivers in new york, drivers were earning an average of $14.22 an hour. and 40% of the drivers are on medicaid, and 14% are uninsured. we don't have similar data for california or san francisco, but i think it is indicative of the conditions. now, in looking at the

issues, especially around regulating these wages, there are some key issues that need to be taken into account. one is waiting time. under california law, waiting time, when you're engaged under the employer's control, it is work time. if you go in and a waiter or waitress is in a restaurant, they have to be paid whether or not there are costumers in the restaurant at that time. when we look at t.n.c. drivers, it is very similar. someone comes into work, gets in their car, turns on their app, they may pick up a first passenger and dropped them off, and they're driving back to where they might find more passengers, or they're circling because there aren't places to park, that is work time. they're not going and taking care of a family member or doing other personal activities. in new york, they found that the drivers were ready but without passengers about 40% of the time. and the higher wait times mean greater congestion. people saw the op-ed from the uber and lyft leaders

a few weeks ago, and they said they were open to paying for the time after you've accepted a ride and while you're doing the ride. but one of uber's economists have sade previously isaidpreviously, if e that amount of money, that will just bring more drivers in, an and the overall hourly wage is not what you want it to be. dealing with wait time is essential, and even under -- it is an area we can expect even under abc, there is the potential for future litigation. so looking at what the new york taxi and limousine condition did, they said up pay standard, $22.50 an hour, and the employer share of payroll taxes, and they adjusted that for the percentage of time people were actually driving, then have the adjustments go on a company basis, and it

brought it up to a little less than $30 an hour, and they do the same for the expenses, in terms of the per mile rate for driving. the taxi and limousine commission, estimated they earned $172 million after the policy went into affect. they haven't yet done an hourly basis. but the average trips per day did continue to increase. so in terms of lessons for san francisco, ab5 is very important in codifying this law and expanding it in terms of the labor code. and, of course, under san francisco's own laws, as pat mulligan mentioned earlier, they should already been covered given the dynamics' decision, but clear rules are going to need to be set to avoid a constant, ongoing stream of litigation around both

waiting times and operating expenses. the commission provides one example of how this could be done. there are other ways it could be done. access to company data will be essential. they require the companies to provide individual data on the drivers, which allows them to do the analysis, to look at the issues like wait-time earnings, and it is a good model to look at, what data should be required. and finally, that is going to require work. if moving in that direction, additional resources would be needed for an additional enforcement agent see agency. thank you. >> chairman: thank you, mr. jacobs. next up we have rebecca staff with gig workers rising. gig workers rising. >> say it three times real fast. [laughter] >> thank you.

good afternoon, board of supervisors, the speakers before me, thank you. and thank you to those that are here today, including my fellow drivers and gig workers. my name is reba ka rebecca martinez. i'm a leader with gig workers rising, and most importantly, i have experienced driving for uber and lyft for over a year and a half. so how do uber and lyft drivers fit into our workforce? most of the speakers before me touched a lot on what i had prepared as well, but i'm going to try to go over it again. uber and lyft drivers make up approximately 1% of the u.s. workforce. here in san francisco, it is estimated there were 45,000 drivers in 2017, with an estimated 6,000 on the road during peak hours. uber and lift are quick to

point out that the majority of their drivers are part-time. but as some of the previous speakers mentioned, half of drivers work full-time hours, and for one out of two drivers, this is their only job. it is also important to highlight that full-time drivers are providing close to 50% of rides requested through the app. with the continued rate decreases for drivers, full-time has gone from a 40-hour work week to 70 to 80 hours to survive. so mo who makes up the gig workers? among those who say income from gig platforms are essential, 64% are people of color, 57% have household incomes under $30,000. 51252% have a high school degree or less, and 45% need to control their own schedule. i know a few of the speakers before me touched on this. how much do drivers make? according to glass door --

or how much do uber drivers make? according to glass door, $125,000 plus a year, free catered lunches, a couple hundred in credit each month to use on their uber rides. the drivers make an average, after expenses, $9.21 an hour. that's just for some quick math. the study that we looked at, according to the economic policy institute, said after expenses, they're making about $10.81. that's about $4.13 per hour less than the san francisco minimum wage. if you look at that annually, that's $8,260 less per year than the minimum wage standards in san francisco. so how does gig workers ring