Uber and Lyft argue treating drivers as employees would wreck their business
Stock in Uber is down more than 6 percent after President Joe Biden’s new labor secretary, Marty Walsh, told Reuters that drivers are employees under US labor law. Stock in Lyft, whose business is more concentrated in the United States, is down 11 percent. DoorDash, which heavily uses contract workers for food deliveries, saw its stock fall by 8 percent.
The legal status of workers driving for these companies has become a controversial issue around the world. Uber, Lyft, and DoorDash argue that the contractor model allows them to not only operate more efficiently but also offer drivers increased flexibility. The companies argue that if they were forced to pay drivers by the hour, they’d have to not only raise fares but also restrict drivers’ hours to make sure drivers only work at times when there are enough customers to keep them busy.
But those arguments haven’t always persuaded policymakers. In 2019, California’s legislature passed legislation classifying gig workers as employees—though that law was overturned by a voter initiative last November. A New York federal judge ordered Uber to pay unemployment . . . . full story in Ars Technica