Uber CEO proposes new category of employment for gig workers
Instead of making contract workers full time to give them benefits — therein increasing the cost of business and drastically cutting the availability of service — why not create a new path?
“There has to be a ‘third way’ for gig workers,” suggested Uber CEO Dara Khosrowshahi in an opinion piece written for the New York Times.
He took on the critics who say that ride-share companies — Uber, Lyft and other app services — need to give workers the security of benefits, while pointing out the advantages of independence. He said many drive for multiple app services while juggling other jobs, school, family and other pursuits. He said his own surveys show gig workers value their independence, their freedom to choose to say yes or no without repercussions. And in fact, though health insurance is the top priority of most public policymakers, many of his workers already have that through spouses, other jobs or the Affordable Care Act. Some place other benefits — such as paid time off or sick leave — higher on their needs list.
Khosrowshahi’s solution is that companies like his be required to pay for benefit funds for gig workers to use as they choose.
“But we need to get specific, because we need more than new ideas — we need new laws,” he wrote. “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 said the debate until now has focused on a “false choice.” But he did say businesses like his should pay for benefits.
“I’m proposing that gig economy companies be required to establish benefits funds which give workers cash that they can use for the benefits they want, like health insurance or paid time off,” Khosrowshahi wrote. “Independent workers in any state that passes this law could take money out for every hour of work they put in. All gig companies would be required to participate, so that workers can build up benefits even if they switch between apps.”
He noted if this had been the law in all 50 states, Uber would have contributed $655 million to benefits funds last year alone. He gave an example of a driver averaging over 35 hours per week who would have accrued approximately $1,350 in benefits funds in 2019 — enough to cover two weeks of paid time off, or an annual premium for subsidized health insurance available through an existing Uber partnership.
“The world has changed,” Khosrowshahi concluded. “We must change with it.”