Lyft erases gains in new driver battle developmentThe U.S. Labor Secretary causes a stir by claiming that gig-workers should be classified as employees, continuing Lyft’s long battle with its drivers and sending prices down almost 10% to erase all its March and April gains.
Marty Walsh, formerly Mayor of Boston, came out last week as saying all gig workers, such as ride-sharing app drivers, should be treated as employees – a welcome development for drivers, who have been battling for this recognition for like, ever. Lyft and some its ride-sharing app buddies like Uber have had a long trip along the employee classifying road – a journey that cost the pair almost $200 million between them last year, when a California court ruled that drivers must be treated as employees and given minimum wage and overtime pay. A national (federal level) decision on who does and doesn't classify as an employee could have big implications for the U.S. workforce, up to a third of which are gig workers or contractors.
The benefits alone would cost Lyft a pretty penny, so it's understandable that they’d fight it, but it doesn't look like something that’s going away. Gig workers have been fighting for this for years, complaining about unfair working conditions, lack of health care, and straight up exploitation, and this classification of workers was hit especially hard in the COVID pandemic.
"We are looking at it but in a lot of cases gig workers should be classified as employees... in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,"
Walsh told Reuters in an interview, expressing his view on the topic for the first time and giving some early insight into the Biden administration's future stance on the issues.
"These companies are making profits and revenue and I'm not (going to) begrudge anyone for that because that's what we are about in America. But we also want to make sure that success trickles down to the worker.”
Marty Walsh is Biden’s top labor official, and though his words are not yet backed by any official federal action, they have still made waves among tech companies that rely on gig workers. Reforming labor laws is a key pillar of Biden’s platform, so it’ll be interesting to see how this plays out.