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Businesses United States

US Labor Secretary Says Most Gig Workers Should Be Classified as Employees, Prompting Shares of Uber, Lyft, Doordash and Grubhub To Crash (reuters.com) 213

President Joe Biden's top labor official said Thursday that most gig workers in the United States should be classified as "employees" deserving of related benefits, in what could be a policy shift that is likely to raise costs for companies that depend on contractors such as Uber and Lyft and impact millions of workers. From a report: Shares of Uber fell as much as 8 percent while Lyft dived as much as 12 percent. Doordash fell nearly 9 percent and Grubhub was down 3.3 percent. Labor Secretary Marty Walsh, a son of Irish immigrants and a former union member, has been expected to boost President Biden's efforts to expand workers' protections and deliver a win for the country's organized labor movement.

"We are looking at it but in a lot of cases gig workers should be classified as employees... in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board," Walsh told Reuters in an interview, expressing his view on the topic for the first time. "These companies are making profits and revenue and I'm not (going to) begrudge anyone for that because that's what we are about in America... but we also want to make sure that success trickles down to the worker," he said.

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US Labor Secretary Says Most Gig Workers Should Be Classified as Employees, Prompting Shares of Uber, Lyft, Doordash and Grubhub

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  • Employee vs consultant vs Gig worker.

    • Which model is better? 100 full-time employee or 1000 gig workers? Depends on if you are one of the 100.

      • by sjames ( 1099 ) on Thursday April 29, 2021 @01:35PM (#61328672) Homepage Journal

        Only if you believe that any job, even one that ultimately costs the worker more money than they are paid is a good job.

        How about a nice gig job using your foot to push tree litter into a running chipper. You can probably manage to tamp 4 loads an hour and I'll pay you a generous $1 per load (no, REALLY, I'm not illegally paying half of minimum wage, this isn't technically an hourly job, it's a series of one-off gigs! Yeah, that's the ticket!)

        Since this is gig work and you aren't an employee, I hereby exempt myself from all OSHA regulations.

        BTW, sorry to hear about your right foot, sucks to be you I guess. Good thing we didn't have to pay worker's comp! Hey, you can still use your left foot, right?

        • by jonsmirl ( 114798 ) on Thursday April 29, 2021 @01:49PM (#61328756) Homepage

          Why do you get to make this decision and not the worker?
          Maybe he has artificial right foot made of solid steel and this is his dream job.

          • by spun ( 1352 )

            You think anyone is going to hire someone whose foot might break the chipper? Those things are expensive! Chippers that is, not feet.

          • by sjames ( 1099 )

            New prosthetic foot will probably cost more than he will make in a year. There's the truth behind your "dream job".

            Also might damage the chipper, so he's disqualified unless he wants to use his other foot.

          • Why do you get to make this decision and not the worker?

            Because it is not good for society to have those workers be abused and left in a position where they can no longer work. Additionally, the worker is not on equal footing with the person offering the job and is at an extreme disadvantage during negotiations.

            The only real question is where to draw the line. Perhaps a different perspective can answer that question.

    • They are loose definitions however:
      Employee: Someone who is expected to be working for that company.
      Consultant/Contractor: Someone where the company is their customer.
      Gig: Someone offering a temporary single job service.

      If Uber was like it was when it was started, as a way for commuters to share rides say from the Suburbs to the City, and help pay for the costs of commuting. Then that would be a Gig Job. The person had other sources of income, and was just doing a job every once in a while to get some sp

      • They are loose definitions however:
        Employee: Someone who is expected to be working for that company.
        Consultant/Contractor: Someone where the company is their customer.
        Gig: Someone offering a temporary single job service.

        Except that "gig" isn't a thing. It doesn't have a entry in law. It's a category that Uber and the like made up so that they didn't have to follow the laws related to the other two categories.

        We wouldn't be having this discussion and all the court cases if "gig" was a real, legal category. We might be discussing if these companies are meeting the letter of the law, but that's not what's happening. What's happening is that the courts are going, "WTF, that's not a real thing!"

  • "These companies are making profits and revenue and I'm not (going to) begrudge anyone for that because that's what we are about in America... but we also want to make sure that success trickles down to the worker,"

    Mere lip service.

    If you were serious about that, then CEOs wouldn't be making 300 times more than their workers, along with insane stock option deals, bonuses, etc.

    • by bws111 ( 1216812 )

      Why? Are you one of those people that can't do math? Here's a simple example: Walmart CEO makes about $26M/year. According to some people, that is about 1500 times the average worker. OMG! Just think of all that money that should be going to the workers. OK, let's cut the CEO salary to $0, and give all of the savings to the other 4 MILLION Walmart employees. Now they each get an extra $6.50. A YEAR. But just think of how much prices would go down if we weren't paying the CEO that much. OK. Walmar

    • then CEOs wouldn't be making 300 times more than their workers

      The average CEO earns $120k, which is about three times the median salary.

      The 0.01% of CEOs who head Fortune-500 companies earn more than that, but claiming that their salaries are representative of the rest is silly.

  • Doordash and Grubhub are going to crash anyway once the pandemic is declared over. Most restaurant food is gross and soggy after its spent a while being transported around town. When people feel comfortable dining in restaurants again, they'll do that instead.
    • by tomkost ( 944194 )
      Agreed. Somehow Doordash and the like do an even worse job of delivery than random restaurants who do their own. Plus the fees they charge are ridiculous. I saw peeps on FB order a bunch of fried foods and then complained when it's soggy... lmao.
  • by The Real Dr John ( 716876 ) on Thursday April 29, 2021 @01:36PM (#61328682) Homepage

    This clearly shows that the investors in these companies know the workers are being abused, and bought the stock with that knowledge and that expectation. These same investors, upon learning that the workers might have to be treated like human beings start selling off the stocks. Nothing despicable going on here folks.

    • I definitely want to see DoorDash drivers treated as employees, I even voted for it in CA, but you're going a bit far. Mr. Walsh's statement increases regulatory uncertainty, and DoorDash et al are likely to see a big drop in business later this year. It looks like capping the amount they can charge restaurants is also likely to spread to other cities. All of that means that these investments look a lot less attractive than they did 6 months ago, so it's rational to sell. The market is going up this year, b
  • by backslashdot ( 95548 ) on Thursday April 29, 2021 @01:41PM (#61328700)

    He said a lot of gig workers, that seems to have been changed to most. A lot does not mean most unless you are a journalist or finicky investor.

    • He said a lot of gig workers, that seems to have been changed to most. A lot does not mean most unless you are a journalist or finicky investor.

      Well "lot" is more ambiguous than "most".

      I suspect it comes down to how much they're working. If someone drives Uber a couple times a week for a bit of extra cash, they're probably a contractor, not an employee. But if driving Uber is their primary source of income... well then they're probably an employee.

      Of course with people jumping between services, students, semi-retired folks, etc, etc, the devil's in the details and you hope the lawyers can come up with sensible and workable regulations.

      • But if driving Uber is their primary source of income... well then they're probably an employee.

        "Primary source of income" has nothing to do with whether or not you are an employee or contractor.

        • But if driving Uber is their primary source of income... well then they're probably an employee.

          "Primary source of income" has nothing to do with whether or not you are an employee or contractor.

          Again, there's the intuitive definition and the legal definition.

          Perhaps the intuitive definition is the answer to the question: "What do you do for a living?" If the answer is "I'm a driver", or "I'm a software contractor", then you're probably a contractor.

          If you answer: "I work for X" then you're probably an employee.

          It's not the legal answer, but if your work term doesn't match the term of the project then you should probably be called an employee.

  • by stikves ( 127823 ) on Thursday April 29, 2021 @01:41PM (#61328702) Homepage

    Here in California, the government tried to push it after voters said no. In 2020 we overwhelmingly shut down this brain dead idea, again (60-40). Now the Federal government wants to repeat the same?

    Did they really talk to actual so called "gig workers"?

    I have friends who do Uber and Lyft *at the same time*, having both apps open, and respond to the first call.

    Some do alternate between Uber Eats and other services depending on time of day.

    How will this work out if they are suddenly an employee of a single company?

    Please do not shove your terrible ideas down people's throats.

    • Here in California, the government tried to push it after voters said no. In 2020 we overwhelmingly shut down this brain dead idea, again (60-40).

      Only because of a $200 Million propaganda campaign financed by Uber and others.

      I see that the Uber Proaganda Machine has worked well on you.

      • by stikves ( 127823 )

        Why make assumptions before asking whether people held these ideas before that campaign?

        Go and please talk to your fiends and family who do Uber in California. And ask their opinion. Also ask how much they actually make. Try to collect 4-5 reliable data points.

        And then try to understand why people overwhelmingly opposed the idea.

    • $200 million was spent by companies to shut down proposition 22.

      https://www.mercurynews.com/20... [mercurynews.com]

      A fortune was spent insuring it didn't happen.

  • An honest gig platform would not only give gig workers an absolute (within legal limits) right of refusal, but would have tell buyers that there is no "standard rate," you pay WHATEVER the market will bear. If that means the gig workers won't pick up your $10 starbucks order for less than $9, that's your problem and not the platform or workers' problem.

    Such a platform would have a very easy time proving they're not employees because it would be matching buyers and sellers and actually encouraging the buyers

  • I just put away my Michael Jackson eating popcorn meme.
  • by killfixx ( 148785 ) * on Thursday April 29, 2021 @01:51PM (#61328772) Journal

    For every person complaining that this will negatively affect these companies. Or the one's saying people should have the right to be treated like shit.

    STOP!

    Stop asking to be shit on. Stop apologizing for the same entities that are destroying your health and happiness in exchange for more profits. NOT for you, but only for them.

    Companies should be paying every person that is employed a living wage. That means an income above poverty line. Otherwise, the support those people need, comes from my taxes. Increasing the cost to every American, rather than the people directly benefiting from those people's labor.

    Less than 1% of the people that read slashdot are in the top 1% of earners in the US. And, less than 10% of the remaining will ever become part of that fabled 1%.

    Every bit of legislation that decreases a billionaires wealth, is probably good for the rest of us.

    Stop being a Gerry. Stop bending over and begging the rich to fuck you harder in the ass.

    • Uber, we're a "ride sharing" company that is a taxi service but don't need to follow any laws that actual taxi services do. Pesky things like licenses and safety inspections.

    • For every person complaining that this will negatively affect these companies. Or the one's saying people should have the right to be treated like shit.

      STOP!

      Stop asking to be shit on. Stop apologizing for the same entities that are destroying your health and happiness

      If they're destroying your health and happiness you likely want to seek help. They're not affecting anybody negatively.

      It's funny, I used to use a livery service for rides to the airport. They charged me $35, which was cheaper than a cab and included a driver who handled the luggage and all that. They were forced out of business years ago by the taxi cartel and Gaylord (who own Opryland). You can probably find the stories online.

      There's a reason Uber is popular. The taxi cartels are just awful, and the

    • by King_TJ ( 85913 )

      This is NOT about apologizing for corporations! I don't expect you to get my viewpoint here, because I've run into a lot of people parroting the same thing you're saying here -- and they're generally militant socialists who are convinced their way is "the way".

      But let's start with your statement:
      "Companies should be paying every person that is employed a living wage. That means an income above poverty line."

      The majority speaking about a "living wage" are pushing for $15/hr as their minimum expectations. Le

      • has been doing it to make rent. Yes, often as a side gig, but I think OP's point is that you shouldn't need a side hustle to keep a roof over your head.

        We can walk and chew gum you know. We have the resources to end homelessness and hunger. Any time we want. The only question is when will you decide to do it. Because the rest of us have, and you (and more to the point the world view you picked up somewhere) are getting in the way.
  • ... for slavers.
  • The exploitation economy has gone too far and needs to be reined in. If it causes these corporations to go bankrupt then I say, "so be it."

  • the gig is a scam (Score:5, Informative)

    by sdinfoserv ( 1793266 ) on Thursday April 29, 2021 @02:10PM (#61328904)
    These companies bled money in 2020 and continue to do so.
    Grubhub lost $155Million in 2020
    Uber lost $6.77 billion in 2020 (compared to a $8.5 billion loss in 2019)
    Lyft lost $1.7 Billion on revenues of $2.3Billion in 2020
    Doordash net loss $312 million 2020
    Don't even try to use the excuse of a court ruling. They're bad business plans that extract revenue off the backs of "gig" workers. The "pay" and benefits that would normally go to a worker are scammed to the corporation. Time to pull the mask of this wage depressor.
    • by Mitreya ( 579078 )

      They're bad business plans that extract revenue off the backs of "gig" workers.

      I guess I am a little mystified as to why they continue to lose so much money.
      Is it that inefficient? If they underpay workers, how do they not make money?

  • These companies are making profits

    Uh, no. Not just no, but HELL NO. All of the companies listed in this summary are consistent money-losers, and will be until they finally fold. They have no path to making a profit. This 'problem' will sort itself out on its own.

  • Wrong statemet (Score:5, Interesting)

    by Whateverthisis ( 7004192 ) on Thursday April 29, 2021 @02:27PM (#61329008)
    "These companies are making profits and revenue and I'm not (going to) begrudge anyone for that..."

    Correction. These companies are making revenue but are NOT making profits; these companies burn cash like it's going out of style. Only Grubhub has had a few quarters of positive EBITDA, and not enough to really warrant sustainability, and they did it by radically reorganizing their business due to COVID and laying off a lot of staff and stopping development; focusing more on operational efficiency to get to a sustainable revenue so they can ride out the pandemic. The others are also trying but having a lot less success.

    The broader issue they should be addressing is that these companies have yet to prove the sharing model/gig economy is sustainable in the long-term. In most cases the best way for the companies to survive is to share less with the workers by introducing more automation, which will put gig workers who rely on this work without a source of income. Either that, or these companies eventually fail, which will also put gig workers on the streets. Either way, the Dept. of Labor needs to be prepared for a bunch of people to be out of work, because right now it doesn't look like these companies can survive even with the contractor status let alone the cost of employee status.

  • I hire independent sub-contractors for my business, maybe 10,000 hours a year among about forty people. Mostly side work for them. If I have to count them as employees I won't have time to do the work that brings in business. The answer is simple. Turn away business and stopping hiring help.

  • by Sebby ( 238625 ) on Thursday April 29, 2021 @03:02PM (#61329142)

    Government contractors:
    - Use their own tools
    - Set their own hours
    - Set their own rate

    Gig economy "contractors":
    - Use their own tools
    - Set their own hours
    - "Gig economy" company sets their rate

  • Total garbage .... (Score:5, Insightful)

    by King_TJ ( 85913 ) on Thursday April 29, 2021 @03:13PM (#61329184) Journal

    As someone who has done/does these gig jobs for several companies myself? It seems really obvious that you're not one of their employees, and their entire business model wouldn't even exist if you were.

    What most of these workers should WANT is to be deemed an independent contractor, because once you become an employee, they get to dictate all the terms and conditions of your employment. Want to take a pass on a delivery popping up on your phone? Not gonna happen as an employee. Either take what they send you or you're fired!

    Also, don't forget that experienced gig workers OFTEN run multiple apps on their phone at a time, taking work as it pops up from several services and juggling the requests. If you're an employee, you can bet that's not gonna fly. (Headed in the wrong direction to complete a delivery or pickup? You're probably gonna get a phone call from the company asking what you're doing and to immediately turn around. No "slack" to run that other delivery in between completing one for the competition.)

    These accusations of being "mistreated" by gig businesses are, IMO, mostly entitled nonsense too. If they're really not living up to their end of the promised deals ... such as not paying you properly for work completed, or an app that keeps crashing and causing you to be unable to do their tasks in the time expected? Just stop working with them! If everyone did that, the ones with problems would go out of business real fast.

    • Finally someone who actually worked these jobs! I get everyone's "fight for the little guy against the man" mantra, but from those I've talked to few actually have too many complaints and none want the constraints of being an employee for the reasons you mentioned. Of course everyone wants more money and has complaints about their job or passengers, but no more than say office workers. What is worse is when states like Nevada imposed limits on ride pricing and surge pricing during covid. What is the result
  • Stop using this word crash in this context. Does an airliner crash when it descends 8%? Does a hard disk head contact a platter by moving 8% closer?

    The hyperbolic titular editorialization by rehash is unacceptable.

  • by lamer01 ( 1097759 ) on Thursday April 29, 2021 @06:14PM (#61329812)
    This is not some altruistic government attempting to go to bat for the little guy. They want your money. Taxation for employees is more straightforward than the 'gig' worker. They take your money upfront and you get a measly 'standard' deduction. The gig guy can set up a business, get a cpa and deduct a lot. Most likely, his tax bill will be smaller than the equivalent 'employee'.

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