A delivery worker rides his bicycle along a path on the West Side Highway in New York City. Roughly 1 in 6 American adults have engaged in gig work for platforms such as Uber, Lyft and DoorDash. Photo by John Minchillo of the Associated Press.

By Casey Smith
Indiana Capital Chronicle

U.S. — Joshua Wood remembers days during the COVID-19 lockdown when New York City’s streets were practically empty, save for workers like him. That experience convinced the 25-year-old Brooklynite — who makes deliveries for both Uber Eats and a package delivery service — that the gig economy needed some urgent changes.

Roughly 1 in 6 American adults have engaged in gig work for platforms such as Uber, Lyft and DoorDash, according to a 2021 report by the Pew Research Center. But while those jobs promise flexibility and a low barrier to entry, they often pay less on an hourly basis than the prevailing minimum wage and lack basic protections such as overtime, sick pay and unemployment insurance.

New York City has since passed a package of legislation guaranteeing a minimum wage and other benefits for app-based food deliverers, and communities across the country are following suit. In the past five years, lawmakers in at least 10 jurisdictions — including cities such as Chicago and Seattle, and states such as Colorado, Connecticut and Minnesota — have proposed new protections for ride-share drivers and food delivery workers.

At least 10 states have also considered programs that would make it easier for gig workers to access traditional workplace benefits, such as retirement or paid family leave. Meanwhile, regulatory agencies and courts in states including Massachusetts, New Jersey and Pennsylvania have sought to force tech platforms to grant their drivers the same benefits as regular employees.

The push comes amid a resurgent workers’ rights movement in the United States and a global reconsideration of labor rights in the age of the gig economy. Since the start of the summer, both Australia and the European Union moved to strengthen workplace protections for gig workers, while the U.S. Department of Labor is expected to finalize a new rule that may reclassify some gig workers as employees as soon as October.

But gig companies fiercely oppose any effort to reclassify gig workers, a change that would grant the workers new rights and protections under state and federal law. In public statements, legal filings and elaborate marketing campaigns, gig platforms have argued that any significant shake-up to their current labor arrangement would jeopardize workers’ flexibility and independence — as well as raise consumer costs.

For consumers, such marketplaces offer flexibility and convenience, and may fill gaps in existing transportation, logistical or social support systems. Workers flock to gig platforms for similar reasons: In a 2016 Pew Research survey of gig workers whose households relied on their platform income, 45% said they needed control over their schedules and 25% said they lacked other job options.

In addition to New York City — which approved a minimum wage for ride-share drivers in 2018, and for food deliverers in 2021 — gig workers have also notched a string of significant victories in Seattle. The city unanimously passed a minimum pay floor for ride-share drivers in 2020 and app-based delivery workers in 2022. Earlier this year, Seattle mandated paid sick leave and due process procedures for a broader swath of gig workers if they are suspended from the apps.

But while minimum wage floors and similar policies seem like obvious ways to protect workers, gig companies and their allies argue they’ll also produce unintended consequences.

James Parrott, the New School economist, said there is little evidence to support the companies’ arguments: His research has found that New York City’s 2018 pay floor for ride-share drivers did not significantly raise user prices, as Uber and Lyft predicted. They also remained in Seattle after it adopted minimum pay provisions.

Still, gig companies’ arguments have proved persuasive in many places — bolstered, in part, by well-funded lobbying campaigns and direct appeals to the users of their apps. Bills aimed at protecting ride-share drivers died in both Colorado and Connecticut this year after gig platforms rallied against them.

In May, Minnesota Gov. Tim Walz, a Democrat, also vetoed a pay floor for ride-share drivers in his state after Uber said it would force the company to reduce operations there. Minneapolis Mayor Jacob Frey vetoed similar, local legislation months later, citing a desire to further research the likely impacts of the law. Three city council members have said they plan to begin the process of reintroducing a new pay floor in late September.

Increasingly, that message does include new benefits and protections — though industry-backed plans have fallen well short of workers’ demands. Several gig companies have supported state and federal efforts to create what are known as “portable” benefits programs, in which workers accrue benefits like vacation days or retirement savings over time and retain them even after they switch employers.

In 2022, Uber and Lyft backed a law creating a portable benefits program in Washington that could serve as a model for compromise legislation in other states. The legislation, which went into effect in January, made ride-share drivers eligible for paid sick leave and workers’ compensation, and established a pay floor that will rise in tandem with the state’s minimum wage.

Controversially, the law also classified gig workers as independent contractors and preempted local governments from adopting further ride-share regulations of their own. That has made it unpopular with progressive advocates and labor groups.