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Celebration, tension as coronavirus aid extended to gig workers

Uber's CEO cheered the proposal, while a critic of the company's labor strategy said, "I assume the taxpayers pick up the tab."

Uber CEO Dara Khosrowshahi

Uber CEO Dara Khosrowshahi successfully lobbied the federal government to include Uber drivers in a stimulus package.

Photo: Samyukta Lakshmi/Bloomberg via Getty Images

Al Aloudi, who for years has driven for Uber and Lyft in San Francisco, stopped about two weeks ago — not only because few people were requesting rides, but because his parents and four young children live with him. He was afraid he would bring home the potentially deadly coronavirus. For a week, he tried delivering pizza, figuring the job included the least amount of contact with other people, but found he was making just $65 to $70 over eight hours of work.

"When I go home, I change all my clothes and take a shower," he said Thursday. "I'm scared of something happening to them. … It's not worth it right now."

Ride-hailing drivers and other gig-economy workers hit hard by the COVID-19 crisis could soon see relief under a federal stimulus package, expected to pass as soon as Friday, that extends unemployment insurance benefits to independent workers who would not normally qualify. But it remains unclear exactly how drivers like Aloudi will be treated, how much they would receive, and how that affects companies like Uber and Lyft.


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Under the CARES Act, passed by the Senate late Wednesday, people who are unemployed, underemployed or unable to work because of coronavirus would receive $600 a week for up to four months, in addition to state unemployment benefits. In California — where a new, disputed law aims to classify gig workers as employees — that amounts to 60% to 70% of weekly wages, or $50 to $1,300 a week.

The inclusion of contract workers in the federal proposal brought some immediate celebration, along with confusion and tension, some rooted in ongoing clashes over whether Uber, Lyft and others should be allowed to continue classifying drivers as nonemployees.

Uber CEO Dara Khosrowshahi cheered the move in a tweet: "Thanks to the Senate for supporting 1.3M @Uber drivers & delivery people. Many independent workers are on the frontlines; all deserve support. Hope the House will act on this bill & govt will join our push for new laws permitting cos like @Uber to provide new benefits going fwd."

Khosrowshahi had sent a letter Monday to the president and congressional leaders asking that drivers, who are independent contractors with no sick pay or health benefits, and who have found little work amid a widespread lockdown on nonessential activity, be included in the stimulus package.

Aloudi, who organizes other drivers for Rideshare Drivers United, scoffed at the CEO's tweet. "He has no hand in this," he said. "[Khosrowshahi] is making himself a speaker on behalf of drivers. It's so sad for me as a driver fighting since 2015 to get our rights."

He noted that Uber, Lyft and other gig companies are fighting California's Assembly Bill 5 by spending at least $90 million on a campaign to bring the issue before state voters in November. The companies are proposing what Khosrowshahi has called a "third way," the creation of a new work category that would give drivers some new protections but not classify them as employees eligible for things like sick pay and unemployment insurance.

Lyft also applauded the Senate passage. "Lyft has consistently advocated for stimulus that helps people, not companies, and we urge swift House passage of this bill," Chief Policy Officer Anthony Foxx said in a statement. "This will help the vast majority of people who drive with Lyft, most of whom have regular full- or part-time jobs and drive in their spare time."

Uber, Lyft and other gig-economy companies do not pay into an unemployment insurance fund for their drivers and delivery workers, as they do for their employees.

The author of AB 5, California Assemblywoman Lorena Gonzalez, D-San Diego, said that "Uber and its CEO should be ashamed of themselves. They were recently bragging to their investors how many billions of dollars in cash they had, yet they have left their drivers high and dry. It's unbelievable that they are having taxpayers bail them out during these unprecedented times."



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Catherine Fisk, a UC Berkeley law professor who writes and teaches about employment law and has been critical of the companies' position, said Thursday that the unemployment insurance system "is supposed to be funded, in part, by payroll taxes. I have no idea how the system works when there are large numbers of misclassified workers who are eligible for benefits. I assume the taxpayers pick up the tab."

It's possible that companies may be forced to pay down the road. States seeking to classify drivers as employees, like California under AB 5, can try to recoup unemployment insurance costs from gig-economy firms, said Veena Dubal, a UC Hastings associate professor of law who helps drivers organize. But she said she is concerned that the stimulus package as written "incentivizes states to go along with misclassification (of gig workers) to get short-term federal funds."

"In the long term, if workers are considered independent contractors, they will not be able to get unemployment insurance in a non-disaster context," Dubal said.

Nicole Moore, a driver organizer in Los Angeles, said Thursday she was getting "a bazillion questions" from drivers about the stimulus package. She has been telling them that even without it, they should qualify for state unemployment benefits because of AB 5, which went into effect at the beginning of the year.

"We are already eligible for unemployment even though our employers do not follow the law," she said.

The stimulus package now goes to the House, and President Trump has indicated his support.

This story was updated on March 26, 2020.

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