Martindale Center- Policy Briefs on the Future of Work

Protecting Workers’ Rights in the Gig Economy: Digital Labor Platforms and the Case for a Dependent Contractor Classification 7 workers within the gig economy and their rights, regardless of how they end up being categorized (Todolí-Signes, 197). Analysis by Berg et al. suggests that almost all labor platforms require workers to accept being classified as self-employed or independent contractors in order to limit any legal and social responsibility. From the perspective of the labor platforms, independent contractors serve as an offloading of liability in both financial and legal requirements. The lack of recognition of a true employer-employee relationship has led to a series of violations in workers’ rights, including the existence of a minimum wage, insurance coverage, vacation payment, social benefits, the right to establish and join trade unions, etc. (Berg et al.). There is no better case study on this need for classification than the platform that brought the gig economymainstream: Uber Technologies Inc. Since its founding in March 2009, Uber’s expansion has reached into 69 countries, and in the US alone, net revenue in 2019 was $14.1B (Mazareanu). As a labor platform, Uber has not been exempt from the negative aspects related to the gig economy; rather, Uber has often served as the face of these issues in the public eye. Uber has recently been involved in intense legal battles pertaining to a misclassification of workers inside its digital labor platform. Uber workers are classified as independent contractors, and, thus, risks are largely offloaded onto theworker instead of be- ing managed by the company and the platform (Choudary). However, there are some arguments suggesting that their workers should, in fact, be classified as employees in terms of the control that Uber has and the existing dependency of the workers. The first argument relates to the fact that in order to be an employee, it is necessary to be monitored and controlled by the employer, to ensure quality of work. In a traditional firm, this takes the place of the manager or supervisor. In companies likeUber, however, themonitoringandcontrolling is delegated to the customers of Uber, through an evaluation system. The aggregation of these individual evaluations then gives Uber enough information to make decisions on work assignments, dismissals of workers, and other things a traditional manager would do (Todolí-Signes, 198). Contrary to popular belief, the absence of a defined schedule andworkinghoursdoesnotmeanthatemployees immediately become self-employed. The fact that enterprises such as Uber decide not to exercise their power over a formalized schedule does not mean that they are not capable of doing so (Todolí-Signes, 198). Uber still maintains a firm hand over drivers and canmake meaningful changes to specific drivers. For example, this dependency can be observed in how the company fixes ride prices, handles the payment processing, and even imposes sanctions on poor performing drivers. Recognizing Uber’s (and Lyft’s) gig business model for what it is, labor law professor Orly Lobel argues that, “The larger issue is how to modernize employment and labor protections to fit with the realities of work today. In employment and la- bor law, we should strive to get regulation just right: not so little as to leave workers unprotected, but not so much as to distort the market and create employment disincentives” (Lobel, b). From this perspective, some policy recommenda- tions that have been proposed to address the challenge are reviewed below. Policy Options Todolí-Signes, a professor at the University of Valencia, suggests turning toward the examples of Spain and Italy. Both countries have implemented special labor laws that differentiate among professions and adapt employment regulations to the necessities of specific professions. Such an approach could be used to design special labor laws for gig economy workers, so as to not hinder the innovation of the gig economy as a whole, while still maintaining legal protections for workers. Following this reasoning, Todolí-Signes suggests a specific regulation for gig economy platforms, with the following special considerations: the flexibility of schedule and working hours should be kept by the workers, while the employer maintains the ability to set weekly maximum work hours per worker; there should not exist any exclusivity agreements that prevent workers from taking other employment simultaneously; the employee’s liability for damages should be eliminated; and employers should be obligated to pay minimum wage, including for waiting times (Todolí-Signes, 201–202). Lobel highlights an existing factor that should not be ignored: “modern employment law is based on the assumption of two worlds of work: you are either an employee or you are not, and if not, you have none of the protections afforded to employees” (a, 9). Working from that assumption comes the proposal to extend “protections to all workers, irrespective