[US] Gig companies seek compromise on worker employee status

Under increasing pressure from President Biden’s administration - keen to reclassify ride-hail and food delivery workers as employees with full benefit entitlement - gig economy companies including Uber, Lyft, DoorDash and Instacart are suggesting additional benefits as a compromise in their push to keep drivers' independent contractor status, Reuters reports.

The business model of such companies relies on low-cost flexible labour and the companies claim that survey results demonstrate the majority of their workers do not want to be employees. They say a new generation of workers prefers to choose their own hours and working times.

These gig economy giants want officials and lawmakers to drop attempts to reclassify gig workers as employees. But President Biden campaigned on the promise of delivering benefits to gig workers.

Marty Walsh - the US Labor Secretary - reportedly intensified the debate when he said, "a lot of gig workers should be classified as employees," in an April 29 interview with Reuters.

Shares in Uber Technologies Inc , Lyft Inc and DoorDash Inc fell by as much as 12 per cent following Mr Walsh's comments. The companies' business model relies on millions of largely part-time workers who do not receive any benefits, such as unemployment or sick pay. Turning gig workers into employees would jeopardise it.

Within a fortnight of Joe Biden’s election win, Uber, Lyft, DoorDash, Instacart and Postmates teamed up to form the App-Based Work Alliance, a Washington-based advocacy group.

In an April 29 statement, responding to the labour secretary's remarks, the Alliance said it looked forward to coming together with Mr Walsh for "much-needed discussions about advancing modern policies that protect worker independence and flexibility, while strengthening benefits and protections."

The group says its goal is to achieve changes in US labour law allowing workers to maintain flexibility while also receiving more modest versions of benefits required for employees, including minimum pay standards, healthcare subsidies and accident insurance.

In December 2020, Uber sent a letter to the Biden transition team and another addressing all members of Congress in February, calling for support of what the company refers to as its "third-way" proposal.

Labour groups caution that the proposal would create a new underclass of workers with fewer rights and protections. On April 29, Gig Workers Rising - a group of workers advocating for greater benefits - called on regulators to step in and protect working people.

Under increasing pressure from President Biden’s administration - keen to reclassify ride-hail and food delivery workers as employees with full benefit entitlement - gig economy companies including Uber, Lyft, DoorDash and Instacart are suggesting additional benefits as a compromise in their push to keep drivers' independent contractor status, Reuters reports.

The business model of such companies relies on low-cost flexible labour and the companies claim that survey results demonstrate the majority of their workers do not want to be employees. They say a new generation of workers prefers to choose their own hours and working times.

These gig economy giants want officials and lawmakers to drop attempts to reclassify gig workers as employees. But President Biden campaigned on the promise of delivering benefits to gig workers.

Marty Walsh - the US Labor Secretary - reportedly intensified the debate when he said, "a lot of gig workers should be classified as employees," in an April 29 interview with Reuters.

Shares in Uber Technologies Inc , Lyft Inc and DoorDash Inc fell by as much as 12 per cent following Mr Walsh's comments. The companies' business model relies on millions of largely part-time workers who do not receive any benefits, such as unemployment or sick pay. Turning gig workers into employees would jeopardise it.

Within a fortnight of Joe Biden’s election win, Uber, Lyft, DoorDash, Instacart and Postmates teamed up to form the App-Based Work Alliance, a Washington-based advocacy group.

In an April 29 statement, responding to the labour secretary's remarks, the Alliance said it looked forward to coming together with Mr Walsh for "much-needed discussions about advancing modern policies that protect worker independence and flexibility, while strengthening benefits and protections."

The group says its goal is to achieve changes in US labour law allowing workers to maintain flexibility while also receiving more modest versions of benefits required for employees, including minimum pay standards, healthcare subsidies and accident insurance.

In December 2020, Uber sent a letter to the Biden transition team and another addressing all members of Congress in February, calling for support of what the company refers to as its "third-way" proposal.

Labour groups caution that the proposal would create a new underclass of workers with fewer rights and protections. On April 29, Gig Workers Rising - a group of workers advocating for greater benefits - called on regulators to step in and protect working people.