Filling The Gray Area For Gig Economy Worker Status
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Filling The Gray Area For Gig Economy Worker Status

Labor unions and gig economy companies should be open to a third category of gig economy workers similar to the Hamilton Project's independent worker proposal -- but not one with terms laid out by the companies, but one laid out by the workers themselves.

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Filling The Gray Area For Gig Economy Worker Status

Uber. Lyft. Doordash, Grubhub.

All these gig economy companies have gray areas for the classification of their workers. Right now, drivers, delivery drivers, and cleaners in gig economy work are considered "independent contractor" as their employment status. The question of if gig economy workers should be considered employees is one that has been debated in courts and the media for years now, but what should be the right step forward for lawmakers?

On April 29, 2019, the Department of Labor gave the opinion that service providers worker for a virtual marketplace company were employees or independent contractors. It gave the opinion that employees were more independent contractors due to the significant flexibility gig economy companies offered their employees. The distinction between an employee and independent contractor is especially important: independent contractors aren't entitled a minimum wage and overtime pay.

I drive for Uber and Lyft, and I can see the argument for either side of the debate. As an independent contractor, I can set my own hours, drive whenever I want, and make a good amount of money on a busy day. My exchanges with passengers have been very pleasant and polite. I work a full-time job as a teacher in Baltimore City.

One thing I dislike is how much Uber and Lyft take out of my earnings, but I have been around as a driver, and passenger for Uber and Lyft long enough to know that the most advantageous practice to both parties is cutting out the middleman -- the driver earns more and the passenger can pay less when Uber and Lyft aren't orchestrating the ride and taking out a fee. I have done this especially with riders I've built relationships with. However, it's important to note that I wouldn't have met the rider in the first place had it not been for Uber or Lyft connecting us, making either company analogous to an expensive but highly effective dating app.

At the times that I'm not getting much demand, I obviously don't make a lot of money, and my hourly wage can dip below minimum wage. That isn't to account for the liability and external costs, such as frequent oil changes or gas, that accompany using my own car. The problem of waiting for rides and not getting much has largely been ameliorated by driving for both Uber and Lyft -- I'll have both apps open, and when I get a ride on Uber, I'll close Lyft, and vice versa.

That is to say that there are a lot of advantages to being an employee in a minimum wage, overtime pay, and benefits. But there are also a lot of advantages to being a contractor in flexibility and freedom. But neither fits the mold of the majority of gig economy workers who come from diverse backgrounds and circumstances.

It seems like, then, that the labor designations of employee and independent contractor are somewhat outdated for the modern age, and an alternative designation is needed.

I know many Uber and Lyft drivers that drive full-time and rely on their service as their primary source of income, and the high ceiling, low floor precariousness of the job is no joke. Gig economy workers lack the necessary social safety net that unions fought for centuries, that create loyal workers for a company as well as the assurance that themselves and their families will be okay if something goes wrong or unforeseen circumstances derail someone's ability to work.

Uber, Lyft, and DoorDash have committed $90 million to create an alternate classification for drivers in California, one that would include more employee protections and guaranteed minimum pay. Although the proposal sounds good, the context of it comes in response to the proposed Assembly Bill 5, which would codify California Supreme Court decision in 2018 that makes it harder to classify workers as independent contractors.

Uber, Lyft, and DoorDash have all but accepted that the bill will pass through the California legislature and be signed by the governor of California, but now they are working on a second bill that creates this alternative employment category. Labor groups in California have been divided on the issue, some, like the Teamsters and United Food and Commercial Workers strongly opposing any alternative legislation. Other labor unions, like the Service Employees International Union (SEIU), support a ride-share driver bill that allows drivers to organize.

Prominent Democratic politicians and presidential candidates, like Elizabeth Warren, Kamala Harris, and Pete Buttigieg, have largely supported AB-5. Buttigieg joined Uber and Lyft drivers in a demonstration led by the group Gig Workers Rising in San Francisco.

"If you are working a gig you are a worker and you oughta be protected as a worker," Buttigieg says. "That means you deserve a minimum wage. That means you deserve protections from workplace and sexual harassment. That means you deserve overtime protections. And yes, that means you deserve a union."

Uber made an announcement guaranteeing minimum pay of $21 an hour while drivers have a rider, as well as "injured worker protection". Both companies also proposed "sectoral bargaining," letting one union represent all ride-share drivers. The announcement as a whole petitioned drivers to fight Assembly Bill 5 in Calfornia.

But, these guarantees make no note of how much drivers spend just waiting for rides without making any money. What happens when a driver is waiting for a ride? As Christian Perrara notes in his blog, "I can spend 60%+ of my time logged in and waiting for ride requests." And for drivers that work in smaller markets outside big cities, Uber and Lyft drivers can spend much more of their time waiting for a ride. If a driver had a passenger in the car for the entire hour, then maybe they would make $21 an hour. If not, however, the reality looks a lot more bleak.

My misgivings about an alternate category between employee and contractor are that it would make it more difficult for drivers and gig economy workers to unionize when it is in their best interest. Gig economy workers should always have that option.

I reckon, however, that there is much distrust of an alternate category of gig economy workers because of who's laying out the terms for the category: gig economy companies like Uber or Lyft.

It's not coming with any input from drivers themselves, and that's what matters. And while I understand some labor unions' animosity towards a third category in the first place, the reality is that not every gig economy worker would benefit from being designated an employee, myself included.

It is important to note the innovation that comes with a lot of these companies and how much we use and depend on their services: even Buttigieg, Warren, and Kamala Harris, three Democratic candidates who overwhelmingly support Assembly Bill 5, have spent the most money of Democratic candidates on ride-sharing services. I personally wouldn't participate at all in gig economy services like Uber or Lyft, or even freelancing on Medium if I had better options and I didn't perceive the benefits to outweigh the costs

The Hamilton Project has advocated for a worker-driven third category of "independent worker", one that I support. It allows for many of the benefits and protections of employees, like the ability to organize and collectively bargain, to have civil rights protections, tax withholding, and employer contributions for payroll taxes. The proposal also requires that intermediaries like Lyft, Uber, and DoorDash contribute half of Social Security and Medicare taxes. I believe that having the power of collective bargaining would allow many drivers to have a larger voice in the gray areas of how a driver should be compensated in situations like Perrara illuminates: when they are logged into the app waiting for a ride, but not getting any.

However, the con to the gig economy worker is that this proposal doesn't allow independent workers to qualify for hours-based benefits like overtime or minimum wage requirements, or unemployment benefits, mainly due to the fact that the worker can choose to work whenever he or she wants. The main concern with The Hamilton Project's proposal is extending legal protections to independent workers that can then lead to more fiscal protections, "extend[ing] the social compact between workers and employers, and reduc[ing] the legal uncertainty and legal costs that currently beset many independent worker relationships."

The proposal would protect workers and improve living standards as well as reduce the precariousness and uncertainty of being a gig economy worker, as well as keeping the best interests of gig economy companies intact.

Labor unions and gig economy companies should be open to a third category of gig economy workers similar to the Hamilton Project's independent worker proposal -- but not one with terms laid out by the companies, but one laid out by the workers themselves.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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