Welcome back Uber Lyft and Doordash all set to spend $1 million dollars
on a campaign and efforts to stop lawmakers from classifying their gig workers
as employees.
I want to work a few hours outside of my regular job to save for my kid's college.
I can do that whenever my mom needs a ride to the doctor, no matter the day I can do that.
If I were to work 20 minutes a week or 30 hours I can do that
when I need a day off to study for a big exam, I can do that.
They make it look so cheery in those commercials.
The campaign features tv and online
ads highlighting Washington area workers who say
they prefer the flexibility of being an independent contractor
rather than following the model of a company employee.
Certainly not the first time these companies
have fought legislation looking to end gig workers
Most recently, you remember California passed a law creating a three step test
to determine the legal difference between a contract worker
and a company employee drivers are exempt from that law.
After major lobbying, a lot of advertising and plenty of campaigning
from companies like Uber and Lyft lawmakers say reclassifying these gig workers as
employees would make them eligible for benefits and able to form unions,
Labor unions say the companies are exploiting those workers who work about
eight hours per week on the job according to industry data.
So what is at stake here
and how could all of this impact you the customer join us now to break it all down,
Professor at N.
Y. U. Stern School of Business and author of the sharing economy, Arun.
Sundaram rajan Sharon, welcome back to the show. My friends.
So nice to have you here to talk about all things gig economy as always,
I always appreciate your time.
So why are we seeing gig workers push back against attempts
to make them full employees? What's the argument here Arun?
Um I think gig work and in particular driving for uber delivering for doordash
um is so much more flexible and so much more varied
Than your typical 20th century employment relationship.
It's a reflection of the fact that platforms like these are creating
a wide variety of different arrangements
between individuals and their institutions taking us away from
sort of the one size fits all go to work at nine o'clock, come back at five o'clock
Model of the 20th century.
Um And so the pushback is because a lot of workers see
the advantages of being able to do gigs on the side,
being able to work some days and not others being able
to do this in parallel with other work being able to
you know work simultaneously for multiple platforms.
The trouble is that the benefits that we
created in the 20th century for the workforce,
we attached them to full time employment because we needed the private sector to
pay for part of them and the employer needed to pay their share.
And so there aren't very good models until recently
of how to fund benefits for people who aren't classified as full time employment.
So that that's that's sort of where the the the tension is.
I mean they don't wanna they don't want the
work arrangement of employment but they want the benefits
Sharon, do we have any sense?
The percentage of drivers that might be in favor of one over the other?
My own research suggests that two out of three drivers
um wouldn't really fit well into any sort of full time employment categorization.
Um They're doing it um sort of as a part time job,
they're doing it on the side and parallel with other work their students, you know,
like those happy people we saw in that advertisement.
You know, I want those people as my Uber and Lyft drivers.
Where are these people, what I call it, Uber and I call a lift to be my,
my drivers don't look like the people in the advertisements, but
but there is a relatively small fraction of Uber and Lyft drivers who do drive like,
you know, 8, 10, 12 hours a day, five days a week
um sort of the way you would um sort of work for an employment job
In the 20th century.
And so I would say a vast majority of the drivers would
be adversely affected if you try to classify everybody as employees.
What would happen is most of these drivers would
lose their ability to make to supplement their income.
And a much smaller number of drivers would be driving a vast majority of the hours
if this were to to go through this attempt to make companies classify
their workers as employees were to go through what would be the end,
a sort of reaction here or what would be the impact rather for
for customers for you and I when we open up the Uber app,
but we noticed a change in price, a change in service change of terms and conditions,
what are we looking at from the user's perspective?
Well, certainly the first to um you know,
classifying drivers as employees would raise prices
um and classifying drivers as employees is likely to lower quality.
Um The reason is that um you know,
things like food delivery and um you know transportation,
they don't have a uniform amount of demand through the day.
It's not like we want the same amount of food delivery at 11:00 AM as we do at 7:00 PM.
Um It's the same with rideshare, right?
I mean we need much,
many more rideshare drivers in the morning in the evening on weekends.
And as a consequence the gig work model works
really well here because people can sort of,
you know,
the supply can increase significantly when the demand goes
up and then that supply sort of goes away
during the day, late at night when the demand isn't there,
So if you start to try and get people into 8, 10 hour work days, five days a week,
um, they're going to have too much demand in the mornings,
Too little demand in the afternoon, too much demand in the evenings.
And that was sort of what I was so excited about when I saw this model emerge.
It seemed to be reacting to the patterns, You know,
I'm not saying that gig work is good for every profession,
but certainly for the ones where you've got like, you know,
go puff and you've got Uber, you got daughters, you got joker.
Um, this is a model that should coexist with the full time employment model.
Um,
and what we really need to do is to come up with funding mechanisms to attach benefits
to all workers independent of their work arrangement.
And I saw Washington state go forward with some promising legislation this week
where they have come up with a model that doesn't try
to categorize all drivers and all delivery people as employees.
Instead they say, hey, you're in this third category, that's fine.
We'll still give you a, you know,
sort of a wage floor will still give you some sort of some rights that guarantee
that you can work for multiple platforms,
will still create a system to fund paid sick leave for you.
And so that's a real step forward in preparing for the future of work
where more and more people are not going to be
employees and I are going to be left without benefits.
So instead of trying to stuff them back into the 20th century employment boxes,
what we should be doing is creating funding mechanisms
to attach benefits to everybody's work, not just full time employees work.
Arron, sunday religion.
I always really appreciate your perspective and your time when you're
able to give it to us here on the show.
Arun is professor at N. Y. U.
Stern School of Business, Also author of the sharing economy, My friend,
Nice to have you back.
Thank you so much for being here. I appreciate that.