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Today, the Partnership for New York City delivered the following testimony to the New York State Senate Standing Committee on Internet and Technology.

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The Partnership for New York City represents private sector employers of more than 1.5 million New Yorkers. We work together with government, labor and the nonprofit sector to maintain the city’s position as the preeminent global center of commerce, innovation and economic opportunity.

Thank you, Senator Savino, for your thoughtful approach to ensuring that New Yorkers who earn their living through the so-called “Gig Economy” have the protections and benefits they need and deserve. Today, New York state is in a position to craft model legislation for the country that responds to the complexities of how internet platforms are used to connect people to work. Businesses should not be allowed to circumvent the standards that New York sets for treatment of full-time and part-time workers by mischaracterizing them as independent contractors.

We hope that New York will not make the same mistakes that California did in failing to carefully define who is covered in their gig worker legislation. There are several major problems with the California law, starting with an oversimplified “ABC” formula that determines who is a “gig worker” and who should be an employee. It potentially captures many situations where individuals have chosen to work as sole proprietors of small businesses. It also may include people who have decided to supplement their income by taking job assignments that are episodic and allow them to perform work on their own schedule and for multiple clients.

We have canvassed our Partnership members and found that many legitimately hire independent contractors, directly or through intermediaries, to carry out auxiliary functions that require special expertise or extra capacity. A California-type solution would disrupt large numbers of these voluntary business arrangements that are important to breadwinners across the state, as well as to their employers.

California law seeks to limit their interference with legitimate independent contracting arrangements by exempting vocations that are not connected to technology platforms. These exemptions include vocations such as insurance agents, certain health care professionals, securities broker-dealers or investment advisors, and cosmetology services. But many or most of these exempted occupations are likely to gravitate toward technology platforms in the future, so trying to define a gig worker by exception does not make sense in our fast-moving economy. There are also conventional jobs—such as newspaper delivery—that do not belong in the gig category because they are explicitly designed as a source of supplemental income and not as full-time occupations.

On the other hand, there are many technology platforms that provide a marketplace for independent contractors that should not be covered by “gig worker” protections. Examples range from marketplaces like Etsy, which has more than 80,000 New Yorkers using its site to sell products, to platforms that are connecting global networks of experts, software developers, or providers of other professional services. These workers may be available “on demand,” but are clearly not depending on a single client or employer as their source of income and benefits.

As a society, we should be trying to protect gig workers and part-time workers who are not able to protect themselves. On the other hand, we should not be imposing additional costs and regulations that interfere with voluntary business relationships and entrepreneurial activities of New Yorkers who choose to work as independent contractors or sole proprietors.

How do we define a new category of worker who should be protected through legislation? This is a tough question that the legislature has been struggling to address.  The broad generalizations and exceptions that the California law put in place are not working. A better approach might be to consider the number of hours worked or on call (occasional versus substantially full-time over an extended period), the nature of work performed (auxiliary or support services versus core business functions), or the nature and rate of compensation (hourly wage below a certain level versus a fixed compensation for product deliverables). Certainly, the law should not apply to those whose hours of work are de minimis (say, less than 20 hours a week) or where the hourly rate of pay is substantially more than minimum wage.

The Bureau of Labor Statistics has estimated about 10% of U.S. workers have alternative arrangements to a typical 9-5 day at one employer as their primary job, including temp agency work, on-call work, contract work and freelancing.  However, of all 881,000 independent contractors statewide, including those with a separate full-time job, 614,000, or 70%, are not on-demand workers. If New York is to take regulatory or legislative action in this area, it should be focused on the remaining 30%.

The Partnership and our member companies are prepared to work with the legislature and interested parties to come with legislation that achieves worker protections while protecting the rights and interests of independent contractors and those who hire them.

Today, the Partnership for New York City submitted testimony to the Taxi and Limousine Commission Hearing on High-Volume For-Hire Service Provider Congestion Rules

Thank you Chair Heinzen and members of the Taxi and Limousine Commission (TLC) for the opportunity to submit written comments on the proposed high-volume for-hire service provider (HVFHSP) rules. The Partnership for New York City represents the city’s business leaders and largest private sector employers. We work together with government, labor and the nonprofit sector to maintain the city’s position as a global center for commerce and innovation.

We urge the TLC to hold off on adopting proposed regulations that would prevent the issuance of new for-hire vehicle (FHV) licenses and limit FHV travel without passengers in Manhattan below 96^th street. In the past year, the FHV industry has had to absorb many new rules and charges including the congestion surcharge and new formulas for paying drivers. The TLC should allow time to assess the impact of these rules on the industry, its customers and mobility throughout the city before taking further action.

For-hire vehicles have become a significant and valued part of transportation services in New York. As this industry matures, we should be seeking to ensure that it is competitive and responsive to needs of our very diverse communities. Over-regulation at this early stage in development of the industry risks market distortion and inadvertent bias for or against a business model or company.

FHVs are particularly important in transit deserts that are not well-served by public transit, where FHVs may be the only good option. To ensure adequate service to these areas, it is important that companies can license sufficient cars and drivers. The proposed cap on new licenses and driver pay rules may not support that objective. It is important to study how these rules affect citywide services before further regulating the industry.

Furthermore, high-occupancy FHVs should not be subject to the license cap or per capita charges that discourage shared rides. The TLC should exempt these vehicles in order to reduce congestion and advance environmental goals. The Partnership was an early supporter of congestion pricing and we are inaugural members of the OneNYC Advisory Board which has assisted in developing city initiatives that promote reduction in carbon emissions. Encouraging more shared rides in multi-passenger vehicles is part of these goals.

Thank you.