Don’t let Big Gig game the system

It’s time to end Uber’s free ride

IN ITS SWEEPING RESPONSE to the coronavirus pandemic, Congress threw a financial lifeline to millions of Americans and made so-called “gig economy” workers, like Uber drivers, eligible for unemployment assistance for the first time. But the economic crisis begs the question why Uber drivers weren’t eligible already.

The answer is simple. It’s because, unlike other Massachusetts businesses, Uber doesn’t pay unemployment insurance to cover its workers or extend them other crucial protections, and the major gig-economy companies (we’ll call them Big Gig) fight every effort to require it. This opposition left millions of workers without a safety net when the bottom fell out of our economy.

Massachusetts should continue to fight Big Gig’s tactics to deny full protection to workers, but in this moment of crisis, the state should take new action to require Uber to pay for benefits their drivers so desperately need and deserve. It’s time to end Uber’s free ride.

States like Massachusetts, New Jersey, and California have fought for years to protect gig workers by demanding that DoorDash, Lyft, and other Big Gig companies stop misclassifying their drivers and delivery workers as independent contractors instead of as employees. Through misclassification, Big Gig companies have flouted state laws requiring employers to cover the cost of unemployment insurance, workers’ compensation, minimum wage, and sick days. Big Gig pocketed hundreds of millions per year that should have gone to workers, while Massachusetts businesses and taxpayers are stuck picking up the tab.

Big Gig’s vision of work has always been deeply unstable. Under the banner of “flexibility,” the companies offer low pay and few, if any, benefits. But in the midst of a public health and economic crisis, their refusal to provide a safety net to workers has become completely untenable. With the virus spreading and business collapsing, their workers had nothing to fall back on.

Uber CEO Dara Khosrowshahi admitted as much in a March 23 letter to President Trump in which he asked lawmakers to cover his drivers in the CARES Act, even though Uber has never paid a dime into the nation’s unemployment systems. He also took the opportunity to reiterate a Big Gig proposal to change federal law to sanction a new class of employees without government protections.

But we don’t need a new category of insecure work in Massachusetts, we need more protections for workers. Instead of making low-wage drivers and delivery workers pay for their own safety net, as Khosrowshahi proposes, let’s update the law to require Big Gig to cover its workers regardless of how the legal fights over classification turn out. To be clear, we believe that under the Massachusetts legal test, Uber drivers are employees.

We’re fortunate that Massachusetts Attorney General Maura Healey has made fighting misclassification a priority. But in the midst of a crisis, when taxpayers are footing the bill for extraordinary life-saving protections, we can’t wait for legal battles to play out.

It’s time to update state law to require Big Gig platforms for driving, delivery, and other app-based services to pay unemployment insurance, workers’ compensation, sick time, minimum wage, and paid leave, just like any other business in Massachusetts – regardless of how they classify their workers.

Support is already building. On April 8, state Reps. Jay Livingstone of Boston and Dave Rogers of Cambridge filed a bill that would be a good first step – it would require these companies to make payments to the state unemployment trust fund for all workers.

Meet the Author

Sharon Block

Executive director of the Labor and Worklife Program, Harvard Law
Meet the Author

Mike Firestone

Former chief of staff, Attorney General Maura Healey
Coronavirus has laid bare the economic and health disparities in America and the fragility of our social safety net. It is up to us to recognize these gaps and address them. The nature of work may be changing, but workers are as vulnerable as ever. In times of crisis, whether global or personal, everyone needs access to an unemployment check, a paid sick day, a family-sustaining wage, or assistance to recover from an injury on the job. We shouldn’t be subsidizing Big Gig while it games the system at the expense of workers. It’s time for Massachusetts to require these companies to pay for the safety net their workers deserve.

Sharon Block is the executive director of the Labor and Worklife Program at Harvard Law School and served as principal deputy assistant secretary for policy at the US Department of Labor under President Obama. Mike Firestone served as chief of staff to Massachusetts Attorney General Maura Healey and as an assistant attorney general.