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Gig workers win access to unemployment payments in stimulus bill

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Uber CEO Dara Khosrowshahi (center) joins other employees in ringing the Opening Bell at the New York Stock Exchange (NYSE) as the ride-hailing company Uber makes its highly anticipated initial public offering (IPO) on May 10, 2019 in New York City.

Spencer Platt | Getty Images News | Getty Images

Gig workers won a landmark protection in the $2 trillion stimulus bill that passed in a unanimous 96-0 vote in the Senate Wednesday. The bill now moves to the House, which is expected to vote Friday.

The bill would allow gig workers, such as Uber and Lyft drivers, as well as freelancers and the self-employed to be eligible to apply for unemployment benefits. It would also add $600 per week for up to four months compared to what beneficiaries normally receive.

“I am thankful that the U.S. Senate has ensured that drivers and delivery people—along with all independent workers—will qualify for expanded unemployment insurance under the bipartisan COVID-19 relief package,” Uber CEO Dara Khosrowshahi said on Thursday.

“The 1.3 million Americans who drive and deliver with Uber are facing extraordinary economic challenges. Many are on the front lines of this crisis, keeping their communities moving and getting food to people sheltering indoors,” he said. “Those who’ve lost the opportunity to earn need and deserve this support. I encourage the House to act on this legislation to address this emergency, and I am committed that Uber will do its part to advocate for new laws that permit companies like ours to provide additional benefits for independent workers going forward.”

The protection also marks a win for the companies that employ gig workers and rely on them for their businesses to function. Khosrowshahi appealed directly to President Donald Trump and members of Congress to include relief for gig workers whose income has been significantly impacted by the coronavirus pandemic.

In a letter to Trump this week, Khosrowshahi advocated for a “third way” to classify workers outside of the binary of employee versus contractor to “to remove the forced choice between flexibility and protection for millions of American workers.”

Khosrowshahi’s appeal came after the company’s fierce opposition to efforts to encourage the firm to treat drivers as full employees. California recently enacted a law that aims to reclassify gig workers as employees, which Uber has challenged in a lawsuit with Postmates and two of its contractors. The reclassification would require companies relying on gig workers to take on costs of full-time employers, such as healthcare benefits.

Advocates for the California law say gig workers at Uber and other firms are clearly core to their businesses and therefore should not meet the requirements of a contractor. But Uber has said their model allows workers to form a schedule that meets their needs and gain supplemental income. 

Uber will still have a lot of work ahead of it to convince lawmakers that they should create an entirely new classification for its workers. But in the meantime, the provision in the stimulus bill could set the groundwork for Uber to argue in the future for the government to protect workers where their contractor status leaves them exposed.

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As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer

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Uber’s UK ruling could have implications for gig economy startups

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Former Uber drivers Yaseen Aslam and James Farrar first brought their case against Uber in 2016
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The UK’s Supreme Court has rejected Uber‘s appeal against an earlier ruling that said its drivers must be classified as workers, a result that may have a significant impact on other gig economy companies.

The decision—which cannot be appealed—means thousands of UK Uber drivers cannot qualify as being self-employed, entitling them to both minimum wage and holiday pay. The ridehailing company could now face paying substantial compensation to its drivers.

The ruling, which criticized Uber for sidestepping UK labor laws to withhold benefits, could influence other battles between gig workers and the companies that hire them. Earlier this month, the Independent Workers’ Union of Great Britain appealed against a court decision preventing riders for food delivery startup Deliveroo from engaging in collective bargaining due to their self-employed status. Deliveroo, which is backed by investors including Durable Capital Partners and Amazon, is looking to go public this year.

“Employees should benefit from improved rights; however, employers are likely to face increased costs of labor and disruption to their business models, which have proven to achieve rapid scale with gig workers,” said PitchBook analyst Nalin Patel. “The ruling may also now set a precedent in the UK and force other gig economy startups that utilize the self-employed contractor model to rethink how they operate in the region moving forward.”

Former Uber drivers James Farrar and Yaseen Aslam originally won their tribunal against Uber in 2016. Uber appealed the decision, but it was upheld in 2017, and again in 2018 by the High Court.

“This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery,” said Farrar, who is also a general secretary with the App Drivers and Couriers Union. “Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.”

In a statement, Uber’s regional general manager for Northern and Eastern Europe, Jamie Heywood,  said the court decision was focused on a “small number of drivers” who used the app in 2016. Since then, he said the company had made changes to its business,  providing free insurance in case of sickness or injury. He added: “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

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The future is now for gig-based entrepreneurship – San Gabriel Valley Tribune

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With Californian Kamala Harris as vice president, it’s clear the new Biden administration is taking its cues from the once-Golden State on labor policy.

In one of its first acts in office, the Biden Administration placed a regulatory freeze on a Department of Labor regulation enacted in the waning days of the prior administration relating to independent contractors.  The rule, according to labor and employment law firm Fisher Phillips, “aims to make it easier for businesses to classify workers as independent contractors.”

It’s unlikely this rule to give more workers freedom to be their own boss and set their own schedules will survive in a Biden administration that was heavily reliant upon labor unions for money and manpower to win the 2020 campaign.

Meanwhile, House Democrats recently re-introduced the controversial PRO Act in Congress, which “seeks to reduce the use of the independent contractor classification by companies such as Uber,” according to CNBC.

Both of these efforts followed the lead of California’s liberal legislative majority, which two years ago enacted the controversial Assembly Bill 5 to severely restrict the ability of Californians to work as independent contractors.  Their goal is to increase union membership and dues and force people to work in traditional, 9-to-5, union jobs that are relics of the past.

Doubling down on AB 5-type restrictions at the national level – which may be the Biden administration’s goal with the nomination of Julie Su, California’s chief AB 5 enforcer, as deputy Secretary of Labor – would be a tremendous mistake.  It would threaten innovation and hurt the ability of Americans who have lost their jobs to put food on the table during a global pandemic.

As documented in the new Pacific Research Institute study, “The Small Business Gig,” Americans are increasingly working in the gig economy.  They don’t want government – whether in Sacramento or Washington, DC – dictating how they can earn a living.

A 2018 Gallup survey found that 36 percent of U.S. workers have some sort of a gig worker arrangement.  Whether renting out an extra room to earn cash to pay the mortgage or using an app to earn a living on an alternate schedule, the gig economy is increasing opportunities for Americans to become entrepreneurs, while providing customers with lower cost services.

Many in California state government see the gig economy as exploitative and disruptive.  But data from the ADP Research Institute shows that 70 percent of gig workers are independent workers by choice.  Gig Economy Data Hub research found that more than two-thirds of gig economy workers are satisfied with their current work arrangement.

Government shouldn’t pick winners and losers in the economy.  New restrictions on the gig economy, like those proposed in Congress, will limit people’s freedom to become entrepreneurs while institutionalizing the old way of doing work.

Instead of adopting regulations at the federal level that 58 percent of Californians – Democrats, Republicans, and independents alike – rejected when they passed Proposition 22 in November, the Biden administration and Congress should take the opposite approach and enact market-based policies to encourage entrepreneurship and innovation.

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