The Nationwide Battle Over Whether Your Uber Driver Should Be an Employee
The economy is undergoing a dramatic change—a shift from traditional dining and transportation toward a world monopolized by apps. These apps, such as Uber and Doordash, require armies of people in order to function every day, and many of us have fully integrated them into our daily lifestyles.
Notably, this new digitally fueled world has created millions of non-traditional jobs. The person delivering your food or driving you to the airport is almost always a freelancer or a gig economy worker.
The pandemic solidified the dominance of the app world, and subsequently, the gig economy is exploding. Today, millions of people have found work through the new ecosystem of ridesharing, food services and other on demand services made easy by the digital transformation.
Still, unions are pushing back about gig workers’ rights and are doing so with some legitimate reasons to demand more for people who are part of this employment renaissance. But, as unions claim, the big question is whether these workers are misclassified as independent contractors. Fortunately, there might be a compromise to this battle raging throughout the country, which I call the Washington State Compromise.
In America, our labor system favors employment, especially regarding healthcare, retirement, sick leave, and other critical benefits that we all depend on at one point or another. Unfortunately, freelancers or gig economy workers don’t get anything in terms of benefits, and that’s why unions are hoping to encourage companies to classify people in their ranks as employees.
But there’s another side to the story—food delivery and rideshare companies are having no problem attracting workers, even amid a historic labor shortage. Successfully recruiting millions during a problematic labor environment may be a sign that the pay is better for many people than unions would lead you to believe.
Moreover, there’s a big lifestyle element left out of the narrative. The flexible nature of this work suggests that gig economy workers are correctly categorized as freelance employees.
Still, there’s a never ending battle between unions and rapidly growing new companies that power the gig economy. Across the nation, the employment classification of these workers is a hot button issue that is not going away. If a middle ground isn’t found, government interference could render the entire sector unprofitable.
The Washington State Compromise is simple: Gig economy workers are given some rights but remain classified as independent contractors. Compromise should be the north star for companies and workers alike in this promising new sector of the economy.
If unions succeed and get all gig economy workers classified as employees, these app-driven services will be more expensive and less reliable for consumers. Additionally, workers will have much less flexibility and potentially much less opportunity as growth in the sector slows dramatically.
People work for these companies because of the flexibility—they can decide when to work and can turn off their app when they’re tired. The gig economy allows them to make money on their schedule and chase their passions while also bringing home enough money to square up on their bills.
The Washington State Compromise is a great way to ensure that people and companies get the opportunity to prosper and grow in the new digital economy. It’s best to acknowledge labor unions’ concerns about minimum pay and other essential benefits while maintaining the flexibility that made all of these new economy innovations possible in the first place.
David Grasso is the CEO of Bold TV, a non-profit media company dedicated to understanding crypto, the digital economy and reaching personal financial freedom.