San Francisco Gearing up To Tackle Uber and Lyft on Employee Benefits

Just how independent is an independent contractor? And if your company is worth billions, what responsibility do you have to your employees? San Francisco is taking the two big ride sharing apps to task over how they answer these questions. While the two companies currently hold that their drivers are independent contractors, Dennis Herrera, the city attorney, feels a bit differently. Herrera seeks to find out whether Uber and Lyft are doing their due diligence. As it stands, the ride sharing apps classify their drivers as contractors, thus denying them employees benefits.  

Dodging Paying Employee Benefits? 

Herrera’s stated goal? In his word, he’s seeking that Uber and Lyft provide “proof that Uber and Lyft have lawfully classified drivers as independent contractors or provide their drivers with minimum wage, sick leave, health care contributions, and paid parental leave.”  

Hererra, in a Tuesday statement, elaborated: “We are not going to turn a blind eye if companies in San Francisco deny workers their pay and benefits. We are not going to tolerate any company shirking its responsibility to pay for benefits and shifting that burden onto taxpayers when drivers without health insurance turn to the emergency room. If your company is valued at $62 billion, you can afford to give your workers health care.” 

A Disturbing Trend 

Finding cleaver ways around paying employee benefits is a hallmark of the “gig economy” in which we sadly find ourselves. Uber and Lyft aren’t the only companies playing fast and loose with regards to their employees and their benefits. Airbnb skirts the issue altogether by owning no properties, and GrubHub and Bite Squad both use similar language as Lyft and Uber when referring to their drivers.  

This gig set up is incredibly attractive to these companies. They need not set aside money for benefits, as discussed, but they save on more than just that. They also don’t spend as much on renting office space, since employees work from their own homes or vehicles. Training expenses are cut dramatically, as contractors require less oversight than employees.  

While this is great for businesses, it is rather unfortunate for lower-income workers seeking full-time employment. Many companies are unable or unwilling to hire employees full-time, leading to the workers resorting to gigs for income. Those workers aren’t provided benefits and have no long-term career opportunities afforded to them by their hard work. While Uber and Lyft aren’t the only companies guilty of this decentralization, they are certainly emblematic of it. Hopefully for workers, pushes like Hererra’s will become the norm in cities and states across the US.