Uber wants the government's help to establish a gig workers 'benefits' fund
There's nothing stopping Uber from doing that now, without government intervention.
Uber has been under fire for the last few years about how it classifies its drivers. At least a few states believe those drivers should be treated as full employees, with the benefits that come along with it. Uber, on the other hand, continues to argue that treating those employees as contractors gives them much-needed “freedom” to work whenever they want, while also essentially admitting that it can’t afford to pay those contractors as full employees. This debate has been exacerbated during the coronavirus crisis — demand for Uber, Lyft and other rideshare services has plummeted, drivers have to decide whether to risk their health to keep working, and drivers who get sick may find themselves without the benefits they need to get by.
Today, Uber CEO Dara Khosrowshahi published a piece in the New York Times opinion section that admits so-called gig workers “deserve better” while the company simultaneously published details about how it envisions industry and government working together to provide better for “independent workers” like Uber drivers. But unsurprisingly, treating those drivers as employees isn’t on the table.
Instead, Khosrowshahi believes that new legislation is necessary to create a “third way” for gig workers. “Our current system is binary, meaning that each time a company provides additional benefits to independent workers, the less independent they become. That creates more uncertainty and risk for the company, which is a main reason why we need new laws and can’t act entirely on our own,” Khosrowshahi writes.
Perhaps the most significant proposal is requiring “gig economy companies” like Uber to establish a benefits fund that workers can draw on for specific things they need, like paid time off or health care. “Independent workers in any state that passes this law could take money out for every hour of work they put in,” Khosrowshahi writes. “All gig companies would be required to participate, so that workers can build up benefits even if they switch between apps.”
Uber also wants to provide its drivers with occupational accident insurance to cover medical expenses and disability payments when workers are injured on the job. As with Uber’s benefits fund, the company is asking state governments to require this for companies in the ride-share industry.
It’s perhaps a smart proposal, but Uber could do that right now without the need for legislation — the ask for states to mandate such funds would help Uber push back against things like AB5, the California law that went into effect at the beginning of 2020 that classified Uber and Lyft drivers as employees not contractors. Both California and Massachusetts have ongoing lawsuits around Uber’s classification of its drivers.
Other calls to action in Uber’s document were specific to Uber and other companies in the industry; points like a national survey of drivers and delivery people and providing transparency about what workers are expected to earn are less relevant to the “employee vs. contractor” debate. But the items that Uber wants states to legislate on are part of the idea of a new class of employee that has the flexibility Uber claims its drivers want as well as marginally more financial security. These ideas may have some merit, but it’s important to note again that Uber doesn’t need to wait for the government to mandate them to put them into action. Government intervention may help other companies adopt the same policies, but it doesn’t sound like there’s anything stopping Uber from leading the way by putting its money where its mouth is.
