Uber has long maintained that its drivers are independent contractors, not employees, and therefore not eligible for the benefits employees receive. Like many sharing economy companies, Uber says it simply provides technology that enables people to work for themselves.
That flexibility makes it possible for people with irregular schedules, health conditions, or in-between jobs to earn some cash, but it also leaves a growing number of workers unprotected by benefits. The social safety net operates on an outdated expectation that a worker is an employee of a company. That may have been the norm 30 years ago, but the new economy has a growing workforce of contractors left without benefits given to direct employees.
Now, Uber says the solution is to redesign the safety net.
Uber CEO Dara Khosrowshahi has co-authored an open letter with Seattle investor and workers rights advocate Nick Hanauer and David Rolf, president of the SEIU 775 labor union. They’re calling for Washington state to create a “portable benefits” system that would provide contract workers with benefits that could move with them from job to job.
“The American social safety system, which was designed in the 20th century for a very different economy, has not kept pace with today’s workforce,” the letter says. “At a basic level, everyone should have the ability to protect themselves and their loved ones when they’re injured at work, get sick, or when it’s time to retire.”
Washington state is already pioneering labor laws for the modern worker. Over the summer, the state passed one of the most generous paid family leave policies in the nation. In 2015, the Seattle City Council passed a landmark law allowing Uber drivers to unionize, though it is currently embroiled in several legal battles.
This month, Washington legislators introduced a bill in the state House that would extend benefits coverage to contract workers. If enacted, the bill would require companies to contribute funds to an outside benefits provider based on services rendered by contract workers. The providers would offer benefits, like health insurance, industrial insurance, paid time off, and retirement, to non-employed workers.
“We firmly believe that renewing the social contract is both urgent and important,” the open letter says.
However, some question Uber’s motivation for backing portable benefits. For example, Heidi Groover of The Stranger points out that the letter may be another attempt by Uber to avoid classifying drivers as employees.
A generous read on this is Uber wants its drivers to have benefits; another is they hope to hold off more lawsuits seeking employee status.
— Heidi Groover (@heidigroover) January 23, 2018
Read the full text of the letter, by Khosrowshahi, Hanauer, and Rolf, below.