08-18-2020
On August 10, 2020, a California state trial court ordered that the contract drivers working for Lyft and Uber be classified as employees, entitling them to the same benefits under state labor law as the companies’ full-time employees. In 2019, California passed a law intended to make it harder for these companies to make workers contractors. If classified as employees, the workers would receive health insurance, workers’ compensation, and paid sick and family leave. Tech workers, who are employed full-time by these companies, already receive these benefits. The companies have ten days to appeal the preliminary injunction order on the conversion. Both Lyft and Uber have asserted that their drivers prefer to be classified as contractors.
The same day this ruling was issued, the New York Times published an op-ed by Uber CEO Dara Khosrowshahi. In his piece, Khosrowshahi asserted that Uber would only be able to have full-time jobs for a fraction of the drivers working for it, and the company would reduce the number of cities it was able to operate in if they all had to be made employees. He further asserted that drivers would lose the flexibility that they have right now. Khosrowshahi argued for a “third way,” which would require new laws. Contending that when workers receive more benefits, they become less independent, he proposed the establishment of a benefits fund for gig economy companies. Workers would be permitted to use the funds for benefits such as health insurance or paid time off as they choose. The gig companies would contribute funds for every hour worked by the individual. He also argued for state laws requiring these companies to provide medical and disability coverage for injuries on the job, ensuring a baseline safety net. Lastly, he reasoned that these workers should be entitled to the anti-discrimination protections afforded employees. Khosrowshahi concluded his piece with assurances that Uber will begin these measures on its own, including becoming more transparent about the pay for drivers and the realities of their work. Ultimately, he claimed the goal is to provide independent workers with a stronger safety net.