Dara Khosrowshahi, Chief Executive Officer of Uber Technologies Inc., speaks on a webcast during the company’s first public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, USA, on Friday 10 May 2019.
Michael Nagle | Bloomberg | Getty Images
Uber CEO Dara Khosrowshahi dismissed his argument for a “third way” to classify gig workers when he challenged a lawsuit filed by California Attorney General claiming the company denied its drivers benefits by falsely classifying them as contractors.
In a New York Times op-ed published Monday, Khosrowshahi elaborated on his vision on a new labor structure he had previously pushed for by President Donald Trump prior to his signing of the CARES Act. Although the bill eventually provided relief to gig workers along with others affected by the pandemic, Khosrowshahi had encouraged Trump and Congress to consider renewing labor laws to support gig workers who cherish the flexibility of contract work, but also want the protection of employee status.
The op-ed comes as Uber awaits a California court ruling on a preliminary promotion over its workforce classification. California Attorney General Xavier Becerra and the city attorneys of Los Angeles, San Diego and San Francisco filed a lawsuit against Uber and its rival Lyft in May, alleging that they violated the state’s new law, which was aimed at to re-classify gig workers as employees, rather than as contractors. Uber, Lyft and other companies that rely on gig work have consistently opposed the law and have supported a voting initiative to try to roll back the claim.
In the op-ed, Khosrowshahi calls the classification of workers as contractors versus employees a “false choice.” By requiring companies to operate within a binary system, he said, they take on “more uncertainty and risk” if they choose to offer more benefits to independent workers.
Instead, he suggests that companies that rely on gig work should be required to create benefit funds that can be used by workers for everything from health insurance to paid leave. The amount of money that workers can take from the fund would be based on the number of hours of work they put in. Since all gig companies have to contribute to the fund, workers would be able to reap a benefit, even if they switch between the apps they use to make money.
According to Khosrowshahi, Uber would have contributed $ 655 million to benefit funds last year if such a law had existed in all 50 states, although he does not specify the percentage contribution he expects gig companies were required to set up. He estimates that a driver in Colorado on average spent more than 35 hours a week making about $ 1,350 in benefits last year, which he said would cover two weeks paid time or provide a median annual premium payment for a subsidized health insurance plan through an Uber partnership.
Khosrowshahi says gig workers should be allowed to choose what benefits they want. He said while policymakers believe health care would be most important to drivers, health care does not even rank in the top five benefits that drivers say they want most when they are polled by Uber.
Gig companies should also be required to provide medical and disability cover for when workers are injured on the job, Khosrowshahi said, adding that they are currently unable to offer such benefits “without their independent status under the law” to risk. ” New laws should also prevent companies from denying opportunities to self-employed workers on the basis of protected classifications such as race and gender, he argued.
Khosrowshahi said Uber would be “more transparent about what drivers do and the realities of the work”, starting with a new revenue estimator that drivers can use to understand what they can expect to earn in their area. He also committed himself to investigating all active drivers in the US about what is and is not working and released the results publicly. Uber will also register every driver to vote, he said.
“During this moment of crisis, I fundamentally believe platforms like Uber can fuel an economic recovery by giving people flexible work quickly to get back on their feet,” Khosrowshahi wrote. “But this opportunity will be lost if we ignore the pandemic’s obvious lessons and do not guarantee that independent workers have a stronger safety net.”
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