Legislators, Businesses: The Time to Work on Gig Economy Protections is Now

Seattle, WA (WorkersCompensation.com) – In an open letter to businesses, labor and government, ride-sharing service Uber’s CEO called on all parties to come together to find solutions for providing benefits like workers’ compensation to gig economy workers.

“The world of work is changing — driven by technological and economic developments that have reshaped the opportunities and challenges for workers in the twenty-first century. However, the American social safety system, which was designed in the 20th century for a very different economy, has not kept pace with today’s workforce,” Uber CEO Dara Khosrowshahi wrote in a letter co-signed by David Rolf, president of home care and nursing home workers labor union SEIU 775 and Nick Hanauer, founder of Civic Venture Partners, a non-profit business think tank.

“At a basic level, everyone should have the ability to protect themselves and their loved ones when they’re injured at work, get sick, or when it’s time to retire.”

The call for action mirrors movements on the state and federal level to address the issue of benefits for gig workers.

According to a report by Intuit, 34 percent of the current America workforce are gig workers. The company expects that number will grow to 43 percent by 2020.

And lawmakers are taking notice. In May of 2017, Rep. Suzan DelBene (D-Washington), and Sen. Mark Warner, (D-Virginia), proposed legislation that would provide protections to gig workers, similar to those of employees.

“Unfortunately for workers, Congress is playing catchup on issues surrounding our changing economy. There have been a lot of disruptions and yet our laws are woefully behind,” Rep. DelBene said in an interview with WorkersCompensation.com.

“We must ensure they are updated to work the way the world works today. I’ve met with gig economy workers and heard some of the struggles they are dealing with. Whether you make a living through mobile car services or by selling crafts online, workers deserve access to benefits. That’s why I joined Sen. Mark Warner in introducing the Portable Benefits for Independent Workers Pilot Program Act so we can learn from various models on what might work and what might not. This likely won’t be a one-size-fits all solution but Congress needs to engage to help develop solutions.”

Rep. DelBene said she worries that many workers may be falling through the cracks and moving to public assistance.

The bills are currently awaiting committee hearings, a spokesperson in Rep. DelBene’s office said. On the House side, the bill has been referred to the House Education and the Workforce Committee, while on the Senate side, the bill has been referred to the Senate Health, Education, Labor and Pensions committee, they said.

An unidentified Uber spokesman said since the release of the letter, Uber has been in touch with Washington state lawmakers and other businesses to discuss the issues raised in the letter.

“Portable benefits legislation has already been introduced this year in the WA legislature, and that’s an important step in moving the conversation forward,” the spokesman said. “However, we believe additional work is needed to develop a truly successful portable benefits system that reflects the principles articulated in the letter. We’re hopeful that through broad-based discussions later this year, such a system can be presented legislatively during the 2019 session.”

New York City’s Black Car Fund, created by the New York state legislature in 1999, was designed to provide workers’ compensation benefits, including a $50,000 death benefit to survivors, to contract drivers (taxi cab drivers, or now, Uber and Lyft drivers) who are injured on the job.

The fund is paid for through a per-ride surcharge to the consumer of 2.5 percent, and covers 125,000 drivers statewide.

Alastair Fitzpayne, director of the Aspen Institute’s Future of Work Institute, said the Black Car Fund works because it brings together businesses, consumers, workers and legislators.

“It’s really a first-of-its-kind, innovative model,” Fitzpayne told NPR.

The fund works, he said, because it is mandated by the state, enjoys industry support and is a fair and equitable way to solve a problem for the drivers.

It is one of several plans Uber is looking at putting into place with the help of businesses and legislators in Washington state. States across the country, including Washington and New Jersey, are looking into different ways to charge a fee for freelance services that would be used to provide benefits to gig economy workers.

“There are a number of potential models around the world that could inform how an actual portable benefits system could be structured, and they vary based on industry, coverage level, funding mechanisms and a variety of other factors,” the Uber spokesman said.

“Building a new system that reflects the principles laid out in the letter will likely be a complex process requiring input from many stakeholders, which is why we are calling for a collaborative approach that involves business, labor and government at the table.”