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Uber and Airbnb Lobby for Gig Worker Bailout

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Uber Technologies Inc. and Airbnb Inc., the leaders of the so-called sharing economy, are suffering during the Covid-19 shutdown, but not in the same way as traditional travel companies like airlines or hotel chains. They’ve built their business models on offloading as many costs and as much risk as possible to their suppliers. Uber doesn’t have to pay salaries for drivers with little or nothing to do. Now it’s those Uber drivers, as well as Airbnb’s hosts, who have to worry about paying for cars and houses that are not generating income as they depreciate in value.

The companies are hardly immune to the fallout from the pandemic. Uber has lost 35% of its market value since Feb. 21, and Airbnb’s board considered revising its plan to go public at a recent meeting. But executives from both companies have focused on drivers and hosts when working the phones to secure some government relief. Uber also sent a letter to the White House and congressional leadership. Airbnb penned a letter of its own advocating for hosts. 

The massive bailout bill Congress is working on may extend unemployment benefits to independent contractors and sole proprietorships, bringing relief even to workers for platforms that haven’t been paying for unemployment insurance.

Khosrowshahi has spoken to at least 10 members of Congress in the past week, according to two people familiar with the matter who asked not to be named discussing private matters. Perhaps his most fruitful call came with Senate Minority Leader Chuck Schumer, where the senator seemed to indicate support for protecting independent contractors, the two people said. A spokesman for the minority leader did not return a request for comment.As he makes the rounds, Khosrowshahi has been reminded that being the chief executive of a $45.5 billion company doesn’t automatically make someone a power player in Washington. When he attempted to bend the ear of Senate Majority Leader Mitch McConnell, for instance, Khosrowshahi was shunted off onto a staffer. “He’s not even demanding to talk to the principals,” said Justin Kintz, Uber’s head of policy. “He’s willing to speak to anyone on the Hill who is willing to listen.”

Similarly, Airbnb’s three co-founders have spoken with more than a dozen members of Congress, making sure that U.S. hosts— who often file their taxes as sole proprietors—benefit from the bailout package, according to two people familiar with the matter who asked not to be named discussing private matters. They’ve also enlisted thousands of hosts to urge lawmakers to include people who earn income by renting property on Airbnb in their unemployment protections. Airbnb also wants to make sure hosts are eligible for Small Business Administration emergency loans.

While both companies are familiar with controversy, they believe they have a winning political issue. “To put it in a really fine perspective, 14% of our hosts are from households that include teachers,” said Chris Lehane, a long-time Democratic operative who runs Airbnb’s policy shop.

Uber is the leader of a larger group of companies who have pushed the boundaries of traditional employment that also includes Lyft Inc., Postmates Inc., and DoorDash Inc. All of them consider their workers to be independent contractors, and don’t provide benefits like health insurance. Airbnb hosts aren’t independent contractors, but are taking on financial risk in much the same way that ride-hail or delivery drivers do. 

Critics of sharing economy companies have long argued their business models were creating circumstances that would make workers vulnerable during a downturn. By offloading risk onto workers, they’re also putting pressure on the governments to whom it will inevitably fall to support them. For its part, Uber has been arguing that states or the federal government create a new status of worker that is neither totally an employee or an independent contractor. “The company has been pushing for a third way for seven years,” said Lane Kasselman, a former Uber executive who advises startups. The vulnerability of workers now, he said, is “proof of what they’ve been saying all along.”

Patricia Smith, who was solicitor of labor under President Barack Obama, said Uber was “taking advantage of a crisis” by pushing for a new legal status of work, predicting such a move would inspire other companies to push employees into situations with fewer benefits.  “All you’re going to do is open the door to even more misclassification,” she said.  

While Uber is eager to advocate for its workers, it has not moved to use the $10 billion it had in cash as of the end of February to provide relief itself. Doing so could increase the likelihood the company would be compelled to continue paying out those benefits going forward, the company says. 

Uber’s turn towards driver advocacy hasn’t gone unnoticed. “A little ironic, right? Uber has spent so much time and money fighting reclassification,” ” said Bradley Tusk, a startup advisor who previously worked with Uber but sold his shares. “Now there’s all of a sudden an upside of people being treated as employees and they want it.”

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What Gig Workers Need To Know About Collecting Unemployment – WAMU 88.5

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When Will Illinois Gig Workers Get Unemployment Checks

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Gig workers and other self-employed, independent contractors in Illinois cannot look forward to getting unemployment checks anytime soon — despite a new federal law intended to help them out financially.

The $2 trillion federal stimulus bill that was approved on March 27 cleared the way to expand jobless benefits to many workers who had not previously been eligible, including the vast ranks of drivers for Uber, Lyft and other rideshare apps.

But nearly two weeks later, the officials who run the unemployment system for Illinois have not come up with a process to accept applications from such workers, much less get the promised money into their pockets.

The Illinois Department of Employment Security says it’s still too busy dealing with the record number of unemployment claims from other workers who are eligible for benefits under existing programs.

In a statement posted Tuesday on the department’s website, officials told gig workers not to bother applying at this point — and to refrain from calling to ask about the matter.

The new Coronavirus Aid, Relief, and Economic Security (CARES) Act sets aside federal funding for benefits to “independent contractors and self-proprietors” who once could not get benefits “but have become unemployed as a direct result of COVID-19,” officials said.

It’s not clear, though, when the state unemployment agency will be ready to start turning the funding from Congress into reality in Illinois. The U.S. Labor Department issued instructions to states on Sunday.

“Please do not call to inquire about these new federal programs,” according to the statement on the IDES website. “Our employees are processing applications for current benefits. Further details about the new federal programs and how to apply will be made available once they have been finalized.”

In a statement to WBEZ on Wednesday, a spokeswoman for IDES did not say how long the delay will last.

“The stimulus package will take time to implement,” said spokeswoman Rebecca Cisco.

She said state employees are fully occupied trying to field the “large increase in claims for regular unemployment benefits” since a stay-at-home order went into effect on March 20. Last week, for the second straight week, Illinois officials reported fielding a record number of new jobless claims.

It’s yet another blow to many working people who were having trouble making ends meet even before the pandemic, said Lenny Sanchez, a long-time Uber and Lyft driver who lives in Des Plaines.

“It’s a punch in the gut when you hear information like that or a response like that,” said Sanchez, 40, of the statement from IDES officials. “It’s like, ‘Hang on tight. We’ll give it to you whenever it’s ready.’ ”

Sanchez — who’s also an organizer and co-founder with an activist group called Gig Workers Matter — said many rideshare drivers were euphoric when the federal law was approved.

“Some drivers went ahead and started applying as soon as the news came out,” he said. “I’m definitely happy that gig workers were included.”

But he and other advocates for rideshare drivers said tens of thousands of families are suffering deeply because the new system has not been implemented yet in Illinois.

“Rideshare drivers are desperate right now, and they are scrambling to pay bills, pay mortgages,” said Bryant Greening, a lawyer with the LegalRideshare LLC. “It’s really a devastating and trying time for them.”

And it’s not just rideshare drivers who are eager to see the state get their unemployment checks in the mail.

Morgan Ione Yeager, a freelance photographer in Highland Park, said she was “appalled and disgusted” by the delays in implementing the aspects of the CARES Act designed expressly for workers like her.

“They’re really handling it poorly,” she said of the state’s response. “There’s no reason why it needs to be this difficult.”

Yeager said she has lost a lot of jobs with clients in the food, beverage, travel and hospitality industries after the pandemic prompted Illinois Gov. JB Pritzker and the governors of most other states to issue stay-at-home orders.

“All of my shoots have been cancelled for March and April at least,” she said. “I don’t really know when I’ll be able to start making money again.”

She said Illinois officials here should at least be able to provide some idea of when everybody covered by the federal stimulus bill will get what they were promised.

“There’s no timeline,” Yeager said. “There’s just no answers and no communication. It doesn’t seem like anybody in my situation is being taken care of at all.”

Dan Mihalopoulos is a reporter on WBEZ’s Government & Politics Team.

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Gig and contract workers can apply for Georgia benefits Monday

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Georgia state officials said Wednesday that their systems will be ready next week: gig and contract workers as well as the self-employed can start applying for jobless benefits starting Monday.

Those workers – tens of thousands of them without paychecks since the virus-linked shutdowns began several weeks ago – have been told not to apply yet, even though they are now entitled to jobless benefits.

Gig, contractor and self-employed workers were not covered by unemployment insurance in virtually any state before passage of the huge federal spending bill March 27.

Many rushed to apply for benefit. 

But state systems were not prepared. Many of those newly-eligible workers were unable to apply at all or if they were, they were frustrated to find their applications rejected.

Meanwhile, the extension of benefits to those new classes of workers sent state officials across the country scrambling to reconfigure software and other processes.

At least in Georgia, the system will be ready to handle applications – starting Monday, said Kersha Cartwright, spokeswoman for the state Department of Labor

Workers who had already applied do not have to apply again, she said. 

Once an application is processed, it could still be several weeks before the worker receives his or her money. When the payments begin, workers will receive $600 extra as part of the new law.

Also urged to file applications next week are workers who had previously been told their work history or limited wages made them ineligible. They should also apply starting Monday, Cartwright said. “If you have been told you had a limited work history or you don’t have enough wages, you may qualify for the Pandemic Unemployment Assistance program.”

Even without the contractors and gig workers, the Labor Department has been inundated with claims for jobless benefits. Last week, the department reported it had processed 133,820 applications for unemployment insurance – three times more than the worst week of the Great Recession. This week’s report, due Thursday, is expected to be worse.