Uber Wants The Government's Help To Establish A 'Benefits' Fund

Uber Wants The Government's Help To Establish A 'Benefits' Fund

Uber has been under fire for the last few years about how it classifies its drivers. At least a few states believe those drivers should be treated as full employees, with the benefits that come along with it. Uber has contested all lawsuits on this topic by saying that a majority of their Drivers actually prefer to be contractors than employees. They value their freedom to drive wheneve they want.

This debate has again resurfaced seriosuly beacause Drivers can not afford to keep driving at these wages and Uber can not afford to take a small er commission to pay Drivers more because they need to show a path to profitability to their investors.

Today, Uber CEO Dara Khosrowshahi published a piece in the New York Times opinion section that admits so-called gig workers “deserve better” while the company simultaneously published details about how it envisions industry and government working together to provide better for “independent workers” like Uber drivers. But unsurprisingly, treating those drivers as employees isn’t on the table.

Instead, Khosrowshahi believes that new legislation is necessary to create a “third way” for gig workers. “Our current system is binary, meaning that each time a company provides additional benefits to independent workers, the less independent they become. That creates more uncertainty and risk for the company, which is a main reason why we need new laws and can’t act entirely on our own,” Khosrowshahi writes.

Perhaps the most significant proposal is requiring “gig economy companies” like Uber to establish a benefits fund that workers can draw on for specific things they need, like paid time off or health care. “Independent workers in any state that passes this law could take money out for every hour of work they put in,” Khosrowshahi writes. “All gig companies would be required to participate, so that workers can build up benefits even if they switch between apps.”

Uber wants to take this a step further by providing occupational accident insurance to cover medical expenses of their Drivers when injured on the job. As with Uber’s benefits fund, the company is asking state governments to require this for companies in the ride-share industry.

It’s perhaps a smart proposal, but Uber could do that right now without the need for legislation — the ask for states to mandate such funds would help Uber push back against things like AB5, the California law that went into effect at the beginning of 2020 that classified Uber and Lyft drivers as employees not contractors. Both California and Massachusetts have ongoing lawsuits around Uber’s classification of its drivers.

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