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Motive for Cuomo’s gig economy task force leaves some confused

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An Uber and Lyft ride-hailing vehicle | Getty Images

An Uber and Lyft ride-hailing vehicle | Spencer Platt/Getty Images

ALBANY — Labor, technology and transportation groups say they’re puzzled after spending the past 24 hours scrambling to guess Gov. Andrew Cuomo’s motive as he jumped into discussions about regulating New York’s expansive gig economy.

Cuomo came out surprisingly strong in his State of the State address earlier this month — comparing the gig economy to sweatshops — but backed off in his budget speech and briefing book Tuesday with a few short lines about “reaffirming the rights of workers” statewide.

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Then, late Tuesday night, he released budget legislation to create a task force to address “the conditions of employment and classification of workers in the modern economy of on-demand workers connected to customers via the internet.” He thus waded into a complex battle regarding the rights of on-demand workers that’s shaping up in Albany even as a similar effort in California faces myriad court challenges.

If approved in the state budget due on March 31, Cuomo’s task force of business and labor representatives would include a Senate and Assembly appointee each, with the governor naming the other seven members.

Convening a group of experts is often seen in Albany as a warning sign that lawmakers want to punt on a difficult issue, and some Capitol insiders fretted on Wednesday that that’s indeed what will happen this year. They also said they’re struggling to interpret the impact of the sparsely detailed bill. But the Cuomo administration said it put a timeline on this one.

The task force would have a month to offer findings to the governor and Legislature, which would then have time to pass a bill before the final scheduled day of session June 2. In the name of actually getting something accomplished, the legislation also gives authority to the Department of Labor to make classifications determining the employee vs. contractor status of “digital marketplace workers” if the various interested parties can’t figure it out.

“It’s broad authority for DOL, but it’s broad authority that kicks in only if they can’t come to a compromise,” Cuomo attorney Beth Garvey said in an interview.

Staten Island Sen. Diane Savino, who sparked the conversation last year by introducing a contentious bill at the end of the 2019 session, said she agrees with the concept of forcing experts into a room together to construct a New York-specific solution.

“So there’s an incentive for everyone that comes up with a proposal that avoids the pitfalls in California — that means we don’t have daily running list of running exemptions or lawsuits,” said Savino, a Democrat. “If not he’ll [Cuomo] instruct the Department of Labor to come up with their own regulations, and nobody wants that.”

Even with such motivation to collaborate, backlash from big tech groups like Uber and Lyft alongside input from a whopping range of the labor force — from truckers to nail salon workers to freelance writers — ensures that compromise won’t come easy. Labor, too, has grappled with the most inclusive way to protect members and the strength of their organizations. Some union leaders are leaning toward a bill like the one California passed, with others shunning it altogether as a promise that the state will be locked in court battles for years to come.

Despite all of that, Sen. John Liu (D-Queens) said he’s introducing a bill “very soon” that is remarkably similar to California’s new law, which broadly dictates that more workers should be treated as employees rather than independent contractors.

Liu said he’s glad Cuomo has recognized the importance of the issue, but he’s certain a comprehensive fix can be reshaped from California’s stab at a solution.

“If he wants to address it appropriately and comprehensively in the budget then I’m all for it,” Liu said. “If it’s missing large parts of the provisions that my bill would address then it’s nothing. We don’t need more task forces.”

“You know what, California, they are the first, and sometimes it’s good to be the second,” he added. “We’ll figure out what has worked there, and we have the benefit of learning from someone with a little bit of experience.”

Others with skin in the game say they’re still unclear about Cuomo’s level of seriousness, but they’re glad the issue hasn’t dropped off entirely in an election year already filled with sticky debates.

“No matter the forum, we are ready to discuss solutions that provide workers with the protections they deserve while maintaining the flexibility they want and the economic growth vital to the state,” said Jason Kaplan, spokesperson for the new gig economy-backed “Flexible Work for New York” coalition.

Mario Cilento, president of the state AFL-CIO, said a framework to provide additional “rights and protections” regardless of the task force’s outcome is a good sign the issue has made progress in the past six months of discussions and hearings.

“We certainly are in a better place now than we were at the end of last session,” he said in a statement.

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Economy

Future of Work | The Gig Economy

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Future of Work


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Video has closed captioning.

Today more than 55 million Americans work in the gig economy, which operates through digital platforms like Uber, Lyft and Task Rabbit. Fueled by technological advancements, the gig economy allows workers like Chloe Grishaw to set her own schedule, and know what she’s agreeing to, without any long-term obligations. The freedom and flexibility, however, comes with financial insecurity.

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09/01/21

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Gig Economy—How Deep Is The Discontent? – BloombergQuint

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Good news and bad news about the ‘gig’ and app-based economy, according to JPM

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A recent JPMorgan Chase report found that workers earning money through the online platform economy are particularly vulnerable to economic shocks.

The online platform economy, which includes ride-sharing services like Uber (UBER) and Lyft (LYFT), online marketplaces like eBay (EBAY) and StockX, telemedicine companies like Teladoc, and other online services, supports almost 8% of families in the United States, according to the report.

This sector also experienced a higher rate of unemployment than the general economy, the report found. “Overall, we see significantly higher UI rates among platform participants relative to the non-platform group,” authors Fiona Greig and Daniel M. Sullivan, wrote in the report. 

“At its peak, the UI receipt rate of drivers was just under 19 percent, over twice the rate of the non-platform group. UI receipt rate among platform participants in other sectors are also elevated, peaking between 13 and 15 percent.”

Rideshare Uber and Lyft drivers rally in support of the Protecting the Right to Organize (PRO) Act, in Los Angeles, California, U.S., March 16, 2021. REUTERS/Lucy Nicholson

Rideshare Uber and Lyft drivers rally in support of the Protecting the Right to Organize (PRO) Act, in Los Angeles, California, U.S., March 16, 2021. REUTERS/Lucy Nicholson

Workers in such industries may be particularly vulnerable to economic volatility like the one induced by the coronavirus pandemic, the report found. “Almost one in five drivers in 2019 was receiving unemployment insurance at the beginning of the pandemic,” the authors wrote. “Of all platform workers, drivers appear to be the group of biggest concern for policymakers from a welfare perspective. They are the most numerous group, have the lowest family incomes, were the most likely to have received unemployment insurance during 2020.”

Drivers were the group which, in the aggregate, were most reliant on the gig economy for income, with leasing platforms accounting for 15% and 20% of the median family’s total income. However, this share of income has decreased since the onset of the pandemic, in part due to reduced demand for riding services as well as an influx of support from government transfer payments.

“The continued rise of the Online Platform Economy raises the importance of strengthening the social safety net for contingent workers and reducing the administrative burdens associated with platform income,” Greig and Sullivan wrote. “Reducing administrative hassles associated with verifying platform income for the purposes of filing taxes, qualifying for social safety net programs, or gaining access to credit, could materially improve and simplify the financial lives of platform workers.”

Online platform economy ‘on the rise’

Despite the new and continuing risks associated with it, the gig and app-based economy has provided a significant role in generating income for people, especially during the pandemic.

“The Online Platform Economy is a crucial source of income for many families even after the shock of the pandemic,” the report noted. “At its peak, almost 8 percent of families earned platform income in any 12 month window.”

Drivers in the ride-sharing economy make up a large portion of the growing gig economy. The online platform economy is especially important for these drivers, who “represent the lion’s share of supply-side platform participants and have the smallest total family incomes,” the authors wrote. “Additionally, lessors derive the highest revenues and the largest share of their total family income from platforms.”

Though concerns regarding the treatment of drivers in the ride-sharing companies have abounded recently, the online platform economy continues to grow and already represents an important part of the total economy, the authors found.

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.

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