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7 min read

    7 min read

    Is it ethical for Uber and Lyft drivers to accept government benefits, like unemployment insurance, Pandemic Unemployment Assistance (PUA) and other programs?

    This simple question has garnered a lot of feedback from drivers. Below, senior RSG contributor Jay Cradeur focuses on what drivers are entitled to, why he decided to apply for some benefits, and what considerations drivers nationwide are making before applying.

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    The last day I drove for Lyft was February 2, 2020. That was Superbowl Sunday.

    I was more aware of COVID-19 than most as I had recently returned from Thailand with a short layover in Hong Kong. When everyone in the HKG airport was wearing a facial mask, I took notice.

    I live with an 81-year-old high-risk individual. The thought of bringing COVID-10 home and killing my mother made my decision to stop driving easy.

    Yet, there are haters out there.  Some drivers feel that people like me (and 60% of all drivers who have stopped driving or are driving less due to COVID-19) are ripping off the system.

    This article will look at a driver’s ethical duty to work in light of the current state of government benefits.

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    What’s Happened So Far

    COVID-19 surprised us all in February 2020. Before we knew it, most governors ordered the citizenry to shelter in place.

    The economy ground to a halt. On March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed. It provided several programs to help the unemployed.

    First, we had the $1,200 stimulus check, which I received on April 24. Then we had the Economic Injury Disaster Loan (EIDL) grant of $1,000.  This landed in many drivers’ bank accounts in late April.

    If you missed out, make sure to subscribe to the Youtube channel as we have been posting weekly updates there!

    The biggest benefit of the CARES Act was Uber and Lyft drivers also became eligible for unemployment benefits.

    The government created the Pandemic Unemployment Assistance (PUA) Program which allowed independent contractors to receive unemployment benefits.  Before the PUA, only employees were entitled to Unemployment Insurance (UI) benefits.

    The reason many rideshare drivers have had such a hard time getting benefits is because Uber and Lyft insist on classifying us as independent contractors. The main reason they do this is to save money by not having to pay benefits.

    Another reason, as Attorney Mark Potter points out, is it makes it harder for drivers to take legal action for back pay:

    “CA law is clear on this issue, Uber & Lyft drivers are employees and are entitled to much more money.  We have found that our driver/clients are entitled to more than double what Uber/Lyft paid.  Uber/Lyft have gotten away with it because drivers have to pursue in private arbitration rather than Court.  Drivers should hire an attorney who will seek all the money they have been underpaid for the past 4 years.”

    See what you are entitled to with the Potter Handy Damage Calculator.

    Most Drivers Are Now Eligible or Receiving Benefits

    While many drivers are receiving unemployment benefits, there are still many who have not.

    Many states have not been able to catch up to the incredible demand of the massive numbers of newly unemployed due to the pandemic.

    According to several news sources, only two-thirds of benefits have actually been paid out to recipients.

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    Do We Deserve These Benefits?

    Here is one message from a driver who feels those of us receiving unemployment benefits are ripping off the system:

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    I am not familiar with the YouTuber who ‘prances’, but I am a driver who quit driving and has refused to work and expose myself to a deadly disease.

    We can certainly agree that Covid19 is a deadly disease. In the United States alone, over 2,000,000 have contracted the disease and over 110,000 have died from it.

    At the same time, I can also feel this reader’s frustration at not being able to get any unemployment benefits. If the reader had received the PUA benefits, would this missive be so vitriolic?

    I understand the reader’s anger and need to vent. Just last week,  I shared about my own challenges being disqualified from the PUA program, put in the UI program, and then waiting a month for my benefits to resume.

    You can watch what happened to me here: The Craziness Jay Went Through To Get His Unemployment Resolution

     

    To Accept Benefits or Not to Accept Benefits

    We all have choices. We assess the options in front of us and we make a choice.

    According to our RSG survey, 60% of drivers have stopped or reduced working for Uber and Lyft during the pandemic.  Not only are drivers risking their health and the health of their families when they take the wheel, but it is also true that demand for rideshare dropped 80%.  

    With demand down 80%, I would expect my paycheck to also be down 80%.

    If I normally would make $300 in a 10 hour day, instead I should expect to earn $60 dollars in that same time.

    Subtract gas and car wear and tear, and that does not leave much. It is a high price to pay for not much upside.

    Then the government offered a lifeline for drivers in the form of several programs.  This makes the choices to drive or not drive much easier.

    On the one hand, I can drive, risk my health, wear out my car, and not make much money, or I can stay home, safe, and accept the government payouts.  I can also keep members of my family safe.

    Most drivers have selected option B, which is to stay home until the pandemic blows over.

    This reader raises another question: If you can physically drive, are you then required to drive and therefore stop receiving government benefits?

    This reader does appear to have a concern for the health risk involved in driving. I am able to work, and I am not sick.

    However, my greatest concern is to avoid getting sick.  Driving 25 people in my car day after day, breathing the same air in a small enclosed area strikes me as unreasonably risky.

    I choose not to drive for health reasons.  It certainly is an easier decision to make when the government is paying me $1,050 per week in recognition of the deadly nature of the pandemic.

    What Does The Future Hold?

    The substantial unemployment benefits will expire at the end of July.  If nothing changes, my benefits will drop from $1,050 to $450 per week.

    The government will certainly pass a Phase 4 program since a substantial percentage of the country is still unemployed.  While the country is slowly opening back up for business, the virus is still out there and we have a long way to go to get back to pre-pandemic levels.

    Source: US Bureau of Labor Statistics

    The Democratic House has proposed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which would extend the current unemployment benefits until January 2021.  That would be very generous of the government.

    However, given the strong May jobs report, passage now seems unlikely.  The Republicans are adamant in their opposition.

    If 15% of the country is unemployed and without significant benefits to cover their bills, our economy will not be strong. Financial experts agree there will be a compromise reached and we should have it the week after the July 4th weekend.

    Key Takeaways

    I get it. Some people are mad.

    They don’t like seeing people like me (and many of you) who have chosen to stop driving and are also able to get $1, 050 per week (varies by state) deposited into my bank account.

    Is what we are doing ethical? I say it is.

    We have all assessed the situation and the options in front of us. Many of us have chosen our health over the extra dollars we could earn driving.

    The fact that the government has stepped up to support us while we stay safe is fortuitous (and some would argue the point of government).

    Hopefully, during this time, you all have been working on your Plan B and you can launch by the end of July when the strong benefits come to an end.

    If you are driving during this time, be safe.

    Readers, what do you think? Are you currently receiving unemployment benefits? Are you driving?

    -Jay @ RSG

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    Jay Cradeur

    Jay Cradeur

    Jay Cradeur, a graduate of the Haas School of Business at UC Berkeley, is a full-time driver with over 26,000 rides. Jay has a driver-focused podcast: Rideshare Dojo with Jay Cradeur. When Jay isn’t writing articles or making videos, he is traveling the world. You can see what Jay is up to at www.nomadjay.com.