Uber's coronavirus pitch to Trump: Help our drivers — and our business model
The pandemic arrived at a key moment for gig-economy companies. But the firms and their critics disagree on the lesson.
Some gig-economy companies like Uber are not only hoping to survive the economic shock of the coronavirus but emerge with longer-term gains in the form of friendly government policies.
The pandemic arrived at a key moment for these companies, and they say it has shined a light on gig work's appeal: flexibility. As many people lose their jobs, they can turn, with relative ease, to delivering food or goods. Forcing companies to turn their independent contractors into employees with health care and other benefits would upend their business models.
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But gig workers and their supporters say the spread of COVID-19 has revealed the opposite is true: The crisis has left some drivers with little business amid drastically reduced travel and movement, while exposing still-active drivers and couriers to the risk of falling ill — and without crucial benefits.
On Monday, Uber CEO Dara Khosrowshahi, in a letter to President Trump, made plain that he wanted both short-term and long-term help, while acknowledging that his company's contract workers are in trouble.
In the letter, copies of which were sent to key congressional leaders, Khosrowshahi asked the president to include independent workers in economic stimulus considerations, saying the outbreak is causing "hardship" for the "1.3 million Americans working on Uber's platform." He said he was not asking for a "bailout" for Uber, but for help for its workers.
Meanwhile, he aimed squarely at the movement that seeks to force Uber, Lyft and others to categorize on-demand workers as employees.
"The current binary system of employment classification means that either a worker is an employee who is provided significant social benefits or an independent worker who is provided relatively few," Khosrowshahi wrote, urging as he has before a "third way": a separate classification for gig workers that would give them some protections but not all those that employees enjoy.
The ride-hailing giant and similar companies that rely on contractors, including Lyft and DoorDash, are fighting California's Assembly Bill 5, which is now law and aims to give gig workers employee rights. The companies have proposed an alternative plan, which they are trying to put on the November state ballot, that would raise pay and give workers some benefits.
Forcing Uber to reclassify employees "would radically change Uber's core service and business model, and would ultimately lead to restrictions on access to income for millions of people looking for this type of work," Khosrowshahi wrote. "The economic challenges ahead of us mean America's workers will need more opportunities to earn additional income, not fewer. I am eager for us to work together to establish a new standard for flexible work, so that it benefits all who choose it and continues to be readily available to as many people as possible when they and our country need it most."
That pitch didn't sit well with California Assemblywoman Lorena Gonzales, D-San Diego, the author of AB 5. She told Protocol on Monday: "Uber is in fact asking for a bailout. Under California law, and other states when it comes to unemployment insurance, they have not properly classified their workers. We need to hold them accountable for not paying into the unemployment insurance fund."
William Gould, an emeritus professor at Stanford Law School and a former chief of the National Labor Relations Board, noted that the "third way" plan does not include sick pay or unemployment benefits. "The so-called third way would undercut a floor which is already fragile and weak," he said.
What is clear is that the coronavirus, and its aftermath, is now another complicating factor in an already tense fight over these workers, their ability to make a living and the ability of the companies to become profitable.
As millions of people are being asked to stay home in an attempt to slow the spread of COVID-19, some companies that provide deliveries are extremely busy. Instacart said Monday it plans to "bring on" 300,000 new personal shoppers over the next three months; it didn't say "hire" because the shoppers are independent contractors.
Some California lawmakers, meanwhile, are pushing for AB 5 to be repealed amid the coronavirus crisis, saying the changes have hurt freelance writers and other independent workers at a time when all employment is critical. Both houses of the state legislature are considering bills, introduced in January, that would return the state to a less rigid test to determine whether a worker is an employee or contractor.
"The coronavirus pandemic highlights the need for workplace flexibility as well as the essential role that freelancers play in the movement, delivery and provision of goods and services," California Sen. Shannon Grove, R-Bakersfield, told Protocol on Monday. She intends to present Senate Bill 806, which aims to repeal and replace AB 5, as an emergency measure when state lawmakers resume their session in April.
On the other side are representatives of driver groups who protested last week in front of Uber's San Francisco headquarters. They want California to enforce AB 5, which is being hashed out in the courts.
"Many Uber and Lyft drivers couldn't shelter at home even if they wanted to because they are being denied the economic safety net and rights that AB 5 would provide," Transport Workers Union International President John Samuelsen said in a statement. "They have to be out there hustling for customers."
Asked for comment about the drivers groups' protest, an Uber spokesperson said the company has "a dedicated team working around the clock to support them the very best we can."
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Uber, Lyft, DoorDash and other gig companies have vowed to provide two weeks' pay to workers who are quarantined or diagnosed with COVID-19. But some drivers have said that's not enough. They say their lack of sick pay forces them to go to work even when they're feeling ill. Vanessa Bain, an Instacart shopper and worker organizer, said Monday she stopped working for the company on March 13 because she is the caregiver for three dependent adults: grandparents who are in their 70s, 80s and 90s.
"I can't risk their health by continuing to work right now," she said. "I worked until I could pay my bills this month, then I had to stop. I'm very worried about what happens next month." Bain, who said she is applying for food stamps, said gig workers are in a "uniquely terrible position as first responders in a crisis, but without protection."