Coronavirus Exposes Uber & Lyft Drivers' Lack Of Safety Net

Coronavirus Exposes Uber & Lyft Drivers' Lack Of Safety Net

As independent contractors, U.S. ride-hail drivers for Uber and Lyft benefited from soaring trip demand and flexible work hours. The coronavirus, although, has brought a large part of the country to a halt which has lead to the regular Drivers who started depending on Uber anfd Lyft as their primary or big source of income to sustain their daily life into financial insecurity like never before in Uber's history.

Drivers have to suddenly face no infrastructure ready to handle the downside of an ambiguous contractor model. Under U.S. labor law, the companies do not need to provide any protections to the drivers because they are not classified as employees. This meant no sick leave (until Uber chose to at least provide that during the crisis) or insurance or workers compensation for their millions of Drivers in the US and globally. It has close to 1-2 million drivers in the US and is seeing high pressure from legal authorities across the nation to treat them better by offering them more benefits while also maintaining their contractor status at least. Changes that the Drivers have requested from the company for several years.

Uber Chief Executive Officer Dara Khosrowshahi on Monday urged U.S. legislators to use the current crisis as an opportunity to implement changes to existing employment law by creating what the company calls a “third way” between employment and contractor status.

There has to be a third way which takes the benefits of both sides and let's Drivers be independent, the most important quality for Drivers according to Uber and Lyft. A federal bill agreed upon temporary unemployment benefits for self-employed and gig workers during the coronavirus crisis.

But Uber’s proposal to change employment laws drew sharp criticism from labor unions.

“A ‘third way’ is just a euphemism for creating a new underclass of workers with fewer rights and protections,” said Art Pulaski, executive secretary-treasurer of the California Labor Federation.

Uber’s original benefits plan did not include unemployment insurance, the protection drivers seek most. A driver advocacy group in New York on Tuesday called on Uber and Lyft to contribute to emergency unemployment pay.

Lyft in a statement said the vast majority of its workers drive fewer than 10 hours per week and 80% have full or part-time jobs offering some level of benefits. Lyft said it was fighting for drivers to receive aid in the federal stimulus package, but did not comment on Uber’s push for legal changes.

Demand for ride-hailing trips in recent weeks has declined by as much as 70% in some U.S. cities and many drivers told Reuters they stopped driving over fears of getting exposed to the virus or infecting others.

Makela Edwards, an Uber driver from Oakland, California, enjoyed the steady pay and flexible hours driving afforded after leaving her job as a public school teacher at the end of 2018. Now, demand for Uber rides has all but dried up.

“This coronavirus has really lifted the lid about how vulnerable I am and how we as gig workers are being left out of the discussion,” Edwards said.

Uber and rival Lyft have established funds to compensate drivers and delivery people diagnosed with COVID-19 or placed in quarantine by health officials for up to 14 days.

Uber said payments have started to go out, but declined to share additional details. Lyft also declined to share numbers on the payment status of those funds.

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