Uber CEO Dara Khosrowshahi says gig economy companies should be required to establish 'benefits funds' for workers instead of treating them as full-time employees

  • Uber CEO Dara Khosrowshahi said companies like Uber should be required by law to provide "benefits funds" to gig workers in a New York Times op-ed published Monday.
  • Khosrowshahi said the gig-work employment system is "outdated and unfair," and called for laws that would require companies to provide gig workers more benefits without classifying them as full-time employees.
  • Gig workers have called on companies like Uber to give gig workers more benefits that full-time employees receive, like health insurance. Uber is facing several lawsuits in California seeking full-time status for drivers.
  • Uber opposes classifying gig workers as full-time employees, and Khosrowshahi's proposal is meant as an alternate solution.
  • Visit Business Insider's homepage for more stories.

Uber CEO Dara Khosrowshahi proposed a new model for gig work in a New York Times op-ed Monday, arguing that companies like Uber should be required by law to provide "benefits funds" to drivers without classifying them as full-time employees.

The ridesharing company is facing mounting pressure from drivers and labor activists to extend more benefits to gig workers. A California law passed this year reclassifies Uber drivers as full-time workers, and the company now faces several lawsuits alleging that it failed to pay drivers minimum wage, sick pay, unemployment, and other benefits guaranteed to employees under state law.

Uber has argued that the law, known as AB-5, doesn't apply to them, and the company is now supporting a ballot initiative in California that would explicitly classify app-based drivers contractors rather than full-time employees.

Even though Uber doesn't want to treat its drivers as full-time employees, Khosrowshahi said believes they're getting the short end of the stick.

"Our current employment system is outdated and unfair," he wrote. "It forces every worker to choose between being an employee with more benefits but less flexibility, or an independent contractor with more flexibility but almost no safety net."

Khosrowshahi says lawmakers should require Uber and other gig economy companies to establish "benefits funds" that would allow workers to take out cash for every hour of work they put in. Under his proposed system, a driver working 35 hours per week could access around $1,350 in benefits per year.

He also argues that those benefits should be provided in cash that workers could use for anything. While labor activists have said companies like Uber and Lyft should be required to provide health insurance to drivers, Khosrowshahi said that most Uber drivers already have health insurance through another job or through the Affordable Care Act.

Beyond the question of how to classify workers, Khosrowshahi argued that anti-discrimination laws for gig workers are needed.

"We also need new laws that prevent companies from denying independent workers opportunities based on their race, religion, gender, sexual orientation or any other protected characteristic," he wrote. "Shockingly, that fundamental measure of equality is not fully enshrined into law for all American workers today."

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