Government Steps In Again on Gig Worker Classification

The government is raising its voice more and more when it concerns gig workers and how they should be classified. What could this intervention mean for rideshare and delivery drivers? Senior RSG contributor Paula Gibbins tackles this and more for this week’s roundup!

Biden blocks Trump’s gig-worker rule [Protocol]

Summary: The Biden administration has blocked a Trump-era rule that would have made it easier for companies like Uber, Lyft and Instacart to continue classifying rideshare drivers and delivery workers as independent contractors under federal law.

The rule pertained to the classification of gig workers under the Fair Labor Standards Act, which requires employers to pay non-exempt employees at least the federal minimum wage. The Trump administration published the rule in January 2021, and it was originally set to go into effect on March 8. In February, Biden’s labor department delayed implementation until May 7. Now, the Department of Labor has officially withdrawn the rule.

The decision to rescind the rule does not mean gig workers will be considered employees. But it does mean certain gig workers won’t face an additional obstacle in their efforts to be classified as employees….

My Take: The dance continues. Employees. Independent contractors. Everyone seems to have an opinion on it. The move by the Biden administration to reverse Trump’s attempt to make it easier for Uber, Lyft and Instacart to continue classifying drivers and delivery couriers as independent contractors is an interesting one. It’s not surprising Biden has chosen this course of action. He’s long stated that he believes gig workers should be considered and treated as employees, not independent contractors.

But what does it really mean and how will it actually affect drivers? That remains to be seen, but with the Protecting the Right to Organize (PRO) Act still making its way through Congress, drivers’ fates may be decided sooner rather than later, and without having a say in the matter. Would this mean unionizing Uber drivers? Possibly. I’m sure each market will react to this in a different way.

How Uber drivers avoided — and contributed to — the fate of taxi drivers [The Conversation]

Summary: Countries around the world are wrestling with whether to classify Uber drivers and other gig economy workers as independent contractors or employees.

But when Uber first came on the scene, the primary subject of debate was whether its drivers were, in fact, taxi drivers. Why was this ride-sharing or ride-hailing app run by a tech firm also applying to be a taxi company? Was Uber truly “the same as a taxi, but different?”

We’ve studied how Uber and taxi drivers have been affected by Uber’s categorization as a technology company. As organizational and management researchers at business schools from across Canada studying stigma, marginalization and inequality as well as entrepreneurship, innovation and technology, we became very interested in Uber’s entry into the taxi industry as we watched it unfold….

My Take: This article is a great read! It hits a lot of points, such as driving taxis being a stigmatized notion. And taxis seen as “dirty”. But then Uber came in and created a seemingly similar model but turned it on its head. Rideshare driving seems to have more respect than taxi driving does.

I admit it, I fell into that bandwagon too. I have never felt comfortable in a taxi, but I’ll take an Uber without batting an eye. Why is that? For one, there are preconceived notions that taxi drivers are dangerous and don’t care about their passengers. I hated riding in taxis partially because the cash box was always so noisy and the cars were not well kept—at least not the ones I ever rode in.

That stigma has only gotten worse since rideshare has come along in full force. Ubers are considered to be more reliable (which in some cases they may be). But, before I knew about Uber, a friend and I were at a bar and needed a ride home. We ordered a taxi through her phone and it was there within 20 minutes. Maybe an Uber would have been there faster, but likely not by much. So, why do I now prefer to order an Uber instead of a taxi? I don’t really even know the answer to that.

I know for longer rides, I definitely prefer Uber because it’s more affordable. But for the short ones, they are pretty similar these days. I don’t know why I have this bias, but I feel like it’s ingrained in a lot of us.

Uber’s grocery delivery is getting a boost from new partnership with Gopuff [The Verge]

Summary: Uber announced that it was teaming up with delivery startup Gopuff to expand its delivery business. Gopuff, which acquired liquor store chain BevMo last year, will make its inventory of convenience and grocery store items available to Uber as part of this new deal. The companies plan to roll out their new offerings to customers in 95 cities starting this June and nationwide later in the year.

Gopuff specializes in delivering “essential” or “instant need” items, which is defines as “liquor, local favorites, beauty and pet products, snacks and [over-the-counter] medication.” The company will handle the logistics and delivery of the items, with Uber taking a cut of the transaction through its app, essentially white-labeling Gopuff’s service. Gopuff, which was founded in 2013, operates in 650 cities in the US, with over 250 “micro-fulfillment centers.”

The news follows months of Uber slowly transforming into a delivery company after suffering steep financial losses as a result of the pandemic. The company’s ride-hailing business tanked in the early days of 2020, and while it is still slowly recovering, it’s an open question as to whether it will return to its pre-pandemic heights. Uber said it completed nearly 30 percent fewer trips in 2020 as compared to the previous year….

My Take: Who’da thunk Uber would turn into one of the biggest delivery platforms? They are continually expanding their delivery services into more and more sectors. Grocery, beauty, pharmacy, etc. The list goes on and is ever expanding. Give it a few more years and Uber might look like a completely different company than it does even today. Will they even need a driving portion on their platform in the end?

Where have all the Uber drivers gone? [Washington Post]

Summary: When the pandemic pushed him to quit driving for Uber, Steve Gregg didn’t know he might be done with the ride-hailing apps for good.

But he was exhausted from the daily stress of driving, after taking passengers on more than 15,000 trips over three years. And he was frustrated over being nickel-and-dimed, seeing his wages steadily decrease. The added risk of contracting the coronavirus was enough to convince him to log off in a panic in March 2020, quitting cold turkey after he dropped a passenger off near a hospital.

Now vaccinated and in search of good work, Gregg says he is in no hurry to return to Uber or Lyft. He said unemployment tided him over during the pandemic and a recent move to Modesto, Calif., from the San Francisco Bay area had lowered his cost of living.

“I can never go back,” Gregg, 53, said in an interview before hedging, “I can never say never. … It was a great journey but it ended hard.”…

My Take: Some people assume that rideshare drivers are just living off of unemployment and then will be back on the road, but that’s simply not always the case. Some drivers are using the money they are earning on unemployment to find bigger and better opportunities so they can break away from rideshare driving for good.

Sometimes all you need is money and extra time to figure out that there’s something better out there for you. Everyone always says that “There’s always more drivers” who will be willing to work for Uber and Lyft for peanuts, but what if that’s just not true? True, this may take a long time, but what if there aren’t anymore drivers? What if people have tried it and refuse to go back? What if newbies are hearing how horribly drivers are treated and decide not to even give it a shot? What if someone just banks on a great bonus and disappears until similar opportunities come along?

I know, that’s a lot of “What ifs” but they can be reality. If you truly had the opportunity to do whatever you wanted, what would that be? Would your answer be driving for Uber or Lyft? Or would it look different for you?

Readers, what is your plan B? Has unemployment/the pandemic helped you get there?

-Paula @ RSG