New York Ruling Grants Jobless Payments to Uber Drivers

By SETH SANDRONSKY

In mid-October, New York State’s Department of Labor ruled that two former drivers for Uber, the ride-hailing firm that uses a digital platform to connect customers with workers, are eligible to collect unemployment insurance (UI). UI pays workers who lose their jobs through no fault of their own, begun in 1935 during the Great Depression under President FDR’s New Deal program.

“Today’s determinations by the New York State Department of Labor granting two Uber drivers UI coverage because they are employees of Uber should put an end to Uber’s charade that its drivers are not employees,” said Catherine Ruckelshaus, general counsel for the National Employment Law Project. Under federal labor law, workers must be employees to collect UI payments, which have time limits.

Back to Uber. The company hires drivers as self-employed, independent contractors, and not as company employees, part of what some term the “gig” or “sharing economy.” Uber, with capital from Saudi Arabia’s Public Investment Fund and debt financing from Goldman Sachs and Morgan Stanley, gains from such hiring practices in part by paying no UI taxes.

Crucially, drivers for Uber labor on-demand, for example, a precarious employment arrangement. On-demand workers earn income when customers demand their driving services.

On-demand firms tout the narrative that such labor arrangements provide flexibility to workers. Along with Uber, Airbnb, Lyft, Freelancer.com, TaskRabbit, Thumbtack and Upwork are firms that also hire on-demand labor. There are scores more.

One more thing. The beauty of labor flexibility lies in the eyes of the beholder.

“Gig workers don’t usually get employer-paid benefits, such as premiums on health insurance and contributions to retirement plans,” according to Elka Torpey and Andrew Hogan of the federal Bureau of Labor Statistics. The McKinsey Global Institute concurred with the BLS researchers’ views in a mid-October study on gig workers in the US and across Europe.

Takele Gobena drives for Uber in Seattle, Wash. “I earn $2.64 an hour and have no health-care coverage if injured.” That hourly pay amounts to about a third of the $7.25 federal minimum wage, “unconscionably low,” according to Paul Sonn, general counsel for the NELP Action Fund.

“Uber cannot continue to evade paying into social safety net programs like unemployment insurance and workers compensation for its drivers,” Ruckelshaus said. “It has to start paying its drivers at least the minimum wage, and compensate them for any overtime hours.”

There are tens of thousands of Uber drivers in New York state potentially eligible for UI coverage, according to Ruckelshaus. “Other states, including Alaska, Oregon and California have already found Uber drivers to be employees for UI purposes.”

In California, Assemblywoman Lorena Gonzalez, D-San Diego, introduced and then withdrew Assembly Bill 1727, known as the California 1099 Self-Organizing Act, which, she says, would have enabled on-demand workers “the right to form associations and engage in collective bargaining to have a voice in their workplace” in 2016. Collective bargaining improves wages and workplace conditions.

Gonzalez opted “to continue discussions regarding the legislation’s complex legal issues over the next year,” according to a prepared statement.

Seth Sandronsky is a journalist and member of the Pacific Media Workers Guild. Email sethsandronsky@gmail.com.

From The Progressive Populist, November 15, 2016

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