Elizabeth Warren Calls on Uber, Instacart to Reclassify Workers as Employees

In a letter to the CEOs of Uber, Instacart, DoorDash, and Grubhub, Senator Elizabeth Warren called on the gig companies to do something they've fought for years: providing gig workers with "basic rights and protections" that might protect them during the COVID-19 pandemic.

“Because these workers perform essential delivery work and are critical to serving customers who cannot leave home during the pandemic, you have a responsibility to protect their health and the public’s health. To do so, I urge you to reclassify your delivery workers as employees, rather than independent contractors, and ensure they are provided a full suite of employee protections and benefits.”

For years now, it has grown increasingly difficult to ignore the precariousness of gig workers. With the worsening pandemic, the truth is all but unavoidable now: “essential” goods and services are made cheap, ubiquitous, and convenient by the exploitation of a vulnerable group of workers (along with a healthy dose of investor subsidies). These gig companies have deepened our public health crisis, not because they employ a significant number of the population (they don’t) but because their unprofitable business models which demand minimal labor costs (paid sick leave, minimum wages, health and safety protections, etc.) and maximum production (e.g. more deliveries made or more ride-hail trips completed) have been adopted at an alarming rate thanks to coronavirus.

“Your company’s misclassification of your workers as independent contractors rather than employees creates inherent risk for workers, who are denied access to unemployment insurance and workers compensation, a minimum wage and overtime, health care benefits, the right to be represented by a union, and the legal protections of the Occupational Safety and Health Act,” Warren wrote. “Lawsuits and state legislation, including California’s Assembly Bill 5 and the Massachusetts Independent Contractor Law, have sought to protect workers from being exploited by employer misclassification. The impact your misclassification has on workers, and the precarious circumstances it puts them in, is amplified by this pandemic.”

Whether it be intentional misclassification as contractors or replacing traditional bosses with algorithmic overseers, gig workers are left unable to make ends meet, let alone afford to take time off during a pandemic.

On Monday, Instacart shoppers launched a nationwide strike demanding hazard pay and health protection, while Amazon warehouse workers in Staten Island, N.Y. walked out over the company’s poor response to coronavirus and General Electric workers held protests demanding the company produce ventilators instead of laying off workers and closing factories. On Tuesday, Amazon's Whole Foods employees held a nationwide strike protesting the company's lack of coronavirus protections by calling in sick, just weeks after Whole Foods suggested employees settle for sharing paid time off instead of sick paid leave.

None of this is lost on gig companies who have, to varying degrees, tried to anticipate and undermine the upswell of labor militancy that threatens a business model that demands essential workers be denied essential protections. As Warren points out in her letter, Uber and DoorDash have both announced new paid sick leaves and both have failed to adequately roll out these policies for drivers. Last week, Uber’s CEO Dara Khosrowshahi wrote a desperate letter to President Trump that begged for a bailout to shift the burden of worker healthcare from gig companies to federal and state governments.

But while these companies debate the merits of putting workers before profits, workers are dying. An Uber driver died from coronavirus in the U.S. just last week, and a 25-year-old driver in Brazil died of an illness suspected to be coronavirus.

Warren's letter addresses one front of the information asymmetry that these companies use to escape regulatory scrutiny: wage data. "By classifying your workers as independent contractors, rather than employees, you are not mandated to report this data to the state," Warren writes, "but failing to do so creates a 'monthslong bureaucratic process' for workers to prove their employment status and secure unemployment benefits."

Complying with unemployment insurance regulation is a slippery slope that goes well beyond making sure gig workers are able to put food on the table: it opens the company to tens of millions in each of its major states, reclassification of its workforce as employees in entire states, and large bills for unpaid unemployment and disability taxes. In New Jersey, Uber was accused of misclassifying its workers as contractors to duck out of unemployment and disability taxes, and the state left the company with a $650 million tax bill. The ride-hail giant’s attempts to drag its feet in states like New York, where Uber and Lyft drivers are already legally entitled to tens of millions of dollars in unemployment insurance, make sense when thought of as a hedge against a wave of states issuing tax bills similar to New Jersey’s.

This, then, is why Khosrowshahi celebrated the Senate’s passage of the coronavirus stimulus package: it provides federal unemployment funds to misclassified contractors who aren’t eligible for their state’s unemployment coverage. Instead of states paying for unemployment coverage—but only after reclassifying the contractors as employees, then defending that classification in court, then suing the employers for unpaid unemployment taxes—states are incentivized to simply let the federal government pick up the bill and let gig companies off the hook for the billions they likely owe in unpaid taxes.

It is unlikely the CEOs targeted by Warren’s letter will listen. After all, at no point in their tenures have they ever made a decision prioritizing workers over yet-to-materialize profits. You are reading this precisely because that is not the case. But Warren’s endorsement of gig workers’ demands and struggles should spell out the writing on the wall: gig workers won’t stop until their basic needs are met. Gig companies are running out of excuses and gig workers are running out of patience.