Must-Read: Steven Greenhouse: A Safety Net for On-Demand Workers?

Must-Read: Steve Greenhouse: A Safety Net for On-Demand Workers?: “For many Americans who care about how workers are treated…

…their biggest concern about the much-ballyhooed ‘on-demand’ economy is the way that Uber, Lyft, and other ‘gig economy’ companies have rushed to treat their workers as independent contractors. For employers, the advantages of this strategy are huge…. You don’t have to follow minimum wage, overtime, or employment discrimination laws, you don’t have to make employer contributions to Social Security, Medicare, or unemployment insurance, and your workers can’t unionize…. Alan Krueger… and Seth Harris… propose that Congress update the nation’s labor laws and create a third category of workers: independent workers… [who] should be covered by employment-discrimination laws, they should have the right to unionize and bargain collectively, and their employers should pay Social Security and Medicare taxes. But Krueger and Harris argue that these ‘gig economy’ workers shouldn’t be covered by minimum wage and overtime laws because, in their view, it’s so hard to keep track of exactly when they’re working….

Their paper left me with numerous questions: Krueger and Harris say that on-demand companies shouldn’t be required to provide workers’ compensation… [but] should be able to opt into workers’ comp as they wish…. Krueger and Harris say that without workers’ comp, workers can always sue under tort law, but that wouldn’t be a satisfactory alternative in many cases…. Krueger and Harris say that on-demand employers shouldn’t have to pay into the unemployment insurance system…. [But] many Uber drivers work 30 or more hours a week, and many have driven for that company for more than a year. So why shouldn’t they be covered by unemployment insurance, just like regular workers?… Krueger and Harris write that Lyft and Uber drivers are a ‘canonical example of independent workers.’ But the California and Oregon labor commissioners and many legal experts say that Uber and Lyft exercise such great control over their drivers that the drivers should be considered employees….

A study that Krueger did, done in conjunction with Uber’s chief of research, found that Uber drivers gross $17.50 an hour on average in 20 cities…. But after subtracting the cost of gasoline, insurance, auto payments, and auto maintenance, many drivers say they net just $10, $11, or $12 an hour. With Los Angeles having approved a $15-an-hour minimum wage and with many Uber drivers netting considerably less than that per hour, why exactly shouldn’t drivers be covered—and protected—by minimum wage laws, especially when Uber’s and Lyft’s apps can easily calculate how much time drivers spend carrying passengers and driving to pick up passengers?…

December 14, 2015


Brad DeLong
Connect with us!

Explore the Equitable Growth network of experts around the country and get answers to today's most pressing questions!

Get in Touch