Gig economy companies in the US, including Uber Technologies Inc and Lyft Inc, are pushing to keep drivers as independent contractors, albeit with additional benefits.
The companies, whose business model relies on low-cost flexible labor, say that surveys show the majority of their workers do not want to be employees, as a new generation of workers wants to choose when and how much to work.
They hope to convince US officials and lawmakers to drop attempts to reclassify gig workers as employees, efforts that have gained urgency with the election of US President Joe Biden, who campaigned on the promise of delivering benefits to gig workers.
US Secretary of Labor Marty Walsh on Thursday said in an interview that “a lot of gig workers should be classified as employees.”
Shares in Uber, Lyft and DoorDash Inc fell as much as 12 percent on Thursday following Walsh’s comments.
Turning gig workers into employees would jeopardize the companies’ business model, which relies on millions of largely part-time workers who do not receive any benefits, such as unemployment or sick pay.
Less than two weeks after Biden was declared the winner of last year’s presidential election, Uber, Lyft, DoorDash, Instacart and Postmates banded together to form the App-Based Work Alliance, a Washington-based advocacy group.
In response to Walsh’s remarks, the Alliance in a statement said that it looked forward to coming together with Walsh to have “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 labor laws that allow workers to maintain flexibility while also receiving more modest benefits than required for employees, including minimum pay standards, healthcare subsidies and accident insurance.
Uber in December last year sent a letter to the Biden transition team and one to all members of the US Congress in February, calling on them to support what the company calls its “third-way” proposal.
Labor groups say that proposal would create a new underclass of workers with fewer rights and protections.
Gig Workers Rising, a group of workers that advocates for greater benefits, called on regulators to step in and protect working people.
The gig economy companies scored a decisive win in California in November last year, when voters of the state supported a company-sponsored ballot measure that cemented gig workers’ status as independent contractors, overwriting a state law that would have made them employees.
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