From the Manhattan Institute, Jared Meyer discusses why Lyft and Uber drivers should not be treated as employees. Jared writes:
Unlike employees, independent contractors are not entitled to minimum wage, overtime pay, unemployment insurance, or workers’ compensation. But extending these employment protections that were sought by the plaintiffs makes little sense. Since Lyft and Uber do not control workers’ hours, and determining how much someone is actually working solely for the companies is difficult (if not impossible), minimum wage and overtime pay requirements are inapplicable to the companies’ workers. Additionally, one of the benefits of the sharing economy is that supply can easily fluctuate to meet an ever-changing demand.
Sharing-economy work is often transient or done in addition to other jobs, so there is little reason to compel Lyft and Uber to fund unemployment insurance benefits. Ridesharing drivers also work off-site and use their own vehicles. Hence, companies should not be required to provide workers’ compensation.
Many independent contractors would prefer to have access to some portable benefits. Portable pensions already exist in the form of Individual Retirement Accounts and Simplified Employee Pension Plans. Portable health insurance, although expensive, exists through the Affordable Care Act. Social Security provides disability insurance. Regulators should encourage insurance companies to offer broad plans to meet professionals’ needs.
The Labor Department and the National Labor Relations Board are trying to change the previously-clear distinction between employees and independent contractors. This leaves courts with the impossible task of dealing with these two agencies’ guidelines as lawsuits work their way through the courts. This uncertainty harms many companies and their workers, both inside and outside the sharing economy. Congress should pass a law clarifying the issue before these lawsuits grow out of control.
The sharing economy’s growth is a bright spot in today’s tepid economy. Workers value the freedom and flexibility that partnerships with sharing-economy companies provide. Congress needs to wake up to the realities posed by a 21st century economy and use its powers to rein in the Labor Department and National Labor Relations Board. Lyft’s settlement does nothing to achieve this goal, nor will future legal battles.
Read the full story at Lyft, Uber Drivers Shouldn’t Be Treated Like Employees