Uber CEO advocates for ‘third way’ to classify gig workers while fighting California labor lawsuit

Dara Khosrowshahi, chief govt officer of Uber Applied sciences Inc., speaks on a webcast throughout the firm’s preliminary public providing (IPO) on the ground of the New York Inventory Alternate (NYSE) in New York, U.S., on Friday, Could 10, 2019.

Michael Nagle | Bloomberg | Getty Pictures

Uber CEO Dara Khosrowshahi laid out his argument for a “third means” to categorise gig staff as he fights a lawsuit from the California attorney general that claims it denied its drivers advantages by falsely classifying them as contractors.

In a New York Times op-ed published Monday, Khosrowshahi elaborated on his imaginative and prescient of a brand new labor assemble which he had beforehand floated by President Donald Trump forward of his signing of the CARES Act. Although the invoice in the end provided relief to gig workers together with others impacted by the pandemic, Khosrowshahi had urged Trump and Congress to think about updating labor legal guidelines extra broadly to help gig staff who cherish the flexibleness of contract work but additionally want the safety of worker standing.

The op-ed comes as Uber awaits a California judge’s ruling on a preliminary injunction over its employee classification. California Lawyer Basic Xavier Becerra and three metropolis attorneys filed suit towards Uber and its rival Lyft in Could, alleging they broke the state’s new law which aimed to reclassify gig staff as staff, slightly than contractors. Uber, Lyft and different corporations that depend on gig work have constantly opposed the regulation and have backed a poll initiative in search of to roll again the requirement. 

Within the op-ed, Khosrowshahi calls the classification of staff as contractors versus staff a “false alternative.” By requiring corporations work inside a binary system, he mentioned, they tackle “extra uncertainty and threat” once they select to supply extra advantages to impartial staff.

As an alternative, he suggests corporations that depend on gig work to be required to create advantages funds that can be utilized by staff for something from medical health insurance to paid day off. The sum of money staff can take out of the fund could be primarily based on the variety of hours of labor they put in. Since all gig corporations must contribute to the fund, staff would have the ability to accumulate advantages even when they change between the apps they use to make cash.

In response to Khosrowshahi, Uber would have contributed $655 million to advantages funds final 12 months if such a regulation had existed in all 50 states, although he doesn’t specify the p.c contribution he expects gig corporations could be required to put aside. He estimates a driver in Colorado averaging greater than 35 hours per week would have made about $1,350 in advantages final 12 months, which he mentioned would cowl two weeks of paid day off or a median annual premium cost for a backed medical health insurance plan provided by an Uber partnership.

Khosrowshahi says gig staff ought to be allowed to decide on which advantages they need. He mentioned whereas policymakers imagine well being care could be most vital to drivers, well being care doesn’t even rank within the prime 5 advantages drivers say they need most when polled by Uber.

Gig corporations also needs to be required to supply medical and incapacity protection for when staff get harm on the job, Khosrowshahi mentioned, including that they can not presently supply such advantages “with out risking their impartial standing below the regulation.” New legal guidelines also needs to forestall corporations from denying alternatives to impartial staff on the idea of protected classifications like race and gender, he argued.

Khosrowshahi mentioned Uber could be “extra clear about what drivers make and the realities of the work,” beginning with a brand new earnings estimator drivers can use to grasp what they will anticipate to earn of their space. He additionally dedicated to surveying all lively drivers within the U.S. about what’s and is not working and releasing the outcomes publicly. Uber will even assist each driver register to vote, he mentioned.

“Throughout this second of disaster, I essentially imagine platforms like Uber can gasoline an financial restoration by rapidly giving individuals versatile work to get again on their ft,” Khosrowshahi  wrote. “However this chance will likely be misplaced if we ignore the plain classes of the pandemic and fail to make sure impartial staff have a stronger security internet.”

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