Execs say laws pose hurdle to closing the gig benefits gap
A sitting U.S. senator said solving the gap will take a "whole-of-society effort."
WASHINGTON — Executives at two leading gig economy platforms said Tuesday they're paying attention to the gap in compensation between their users and traditional full-time workers, but believe legal lines complicate their ability to address it.
Vikrum Aiyer, vice president of global public policy at online delivery service Postmates, and Oisin Hanrahan, CEO and co-founder at home services platform Handy, told attendees at an event sponsored by The Washington Post their companies are so committed that they're working with labor advocates and governments while signing up members of their platforms for some services, like health insurance and federally-funded career programs.
"We would like to do more by way of connecting our Postmates to benefits," Aiyer said, "but we really need to contemplate a world where we're decoupling the delivery of all those benefits and the prioritization [of workers' voice] from just full-time employment models."
The debate over compensation in the gig context has heated up in recent years, pre-empting court cases and laws both in the U.S. and abroad. In the U.S., a central debate is whether those who provide services via gig platforms should be considered employees of the platforms' operators or independent contractors under the law. Ride-hailing service Uber, having faced multiple court challenges to its assertion that its drivers are independent contractors, is perhaps the most widely recognized face within the debate.
Hourly earnings estimates for Uber drivers vary — between $8 and $10 an hour according to two separate analyses put forth by researchers at the Massachusetts Institute of Technology and progressive think tank Economic Policy Institute — but are thought to generally be below minimum-wage rates in many localities. Uber CEO Dara Khosrowshahi said in October that the company is working to offer more benefits to users, rolling out offerings like health insurance, maternity and paternity leave, and accident insurance in Europe, for example.
Still, worker classification law makes experimentation difficult for platforms like Handy, Hanrahan said. "We've stepped short of that line that we would need to cross if we were to truly put Handy at risk. I think it's really important that we do create these frameworks for more and more experimentation, so we can offer more faster."
Meanwhile, a sitting U.S. senator at the event stressed the problem will require a comprehensive response.
"This will be a whole-of-society effort," said Sen. Todd Young, R-IN. "It's going to require government at different levels — federal, state and local — coming up with new models … whether it's related to benefits or workforce training programs. We can partner with not-for-profits and also the private sector, and together we're going to have to feel our way through this."
Young referred to federal efforts to fund pilot programs for portable benefits models that would allow gig and independent workers to fund transferable accounts for health, retirement and other areas regardless of their job status. A bipartisan group of Congressional members introduced the Portable Benefits for Independent Workers Pilot Program Act in May 2017, with Young being among those who signed on as cosponsors, but that bill has yet to move past the introduction stage.
Uber has also previously thrown its weight behind efforts to create a portable benefits program in Washington state. Local governments, meanwhile, have taken action in some cases to address gig workers' wage disparities in spite of the independent contractor debate. In New York City, a government commission voted to mandate a wage floor for Uber and Lyft drivers of $17.22 per hour.
Other local governments are just as eager to address the topic, Aiyer said. Outside of portable benefits, legislators at the state level and below are tackling automation, job training and other topics pertaining to technology, including rural broadband internet access.
"We also have to understand one distinct thing: there's a massive difference between the dignity of work and the dignity of a job," Aiyer said. New models of work may not look the same as old ones, in which workers stayed within in one career or company for many years, but instead might "reflect a pace in which you're putting together different incomes, having different types of productivity and then still being able to provide for your kids, for your family, and leave them a little better off."
"There's still a dignity to that, and I think that's what's at the heart of that experimentation."
Follow Ryan Golden on Twitter