The country that saw the birth of Uber could now undermine the company’s business model. On October 13, the United States Department of Labor released a regulatory proposal to determine whether an employee is an employee or self-employed. Unsurprisingly, Uber or Lyft drivers tend to fall into the former category.
Finally, a simple return to the Trump front
” Incorrect classifications continue to deprive workers of their legitimate wages and damage businesses and the economy proclaims the introduction to the Biden administration communiqué introducing this measure.
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Martin Walsh, Secretary of Labor, explains ” Although independent contractors play an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors “. If Uber drivers are immediately at the top of other sectors, we are talking about home assistance, concierge services, deliveries, construction …
In early 2021, the Trump administration had put in place very favorable classification criteria for platforms. Two criteria were taken into consideration in a rather light way, the degree of control of the employer over the procedures for carrying out the assignment and the possibility for the contractor to propose new services independently.
The Democrats want to return to the previous situation, with a more restrictive view of these two criteria. They also want to update other elements, such as investments, if the work is an integral part of the business …
As Martin Walsh observes, Misclassification deprives workers of their federal labor protections, including their right to full and legally earned wages “. In particular, with the qualification of self-employed worker, the self-employed worker will have the right to a minimum wage, to the accounting of his overtime work, to partial coverage of social rights, to unemployment insurance, etc.
The Biden administration’s proposal closely resembles that of the European Commission directive, published at the end of 2021. A directive opposed by Emmanuel Macron’s government at the time. For platforms, such measures are necessarily bad news. They did, however, choose the measure in their first statement.
Uber, Lyft … Independent dependent platforms
Lifte reacted by saying that the measure would only be ” no immediate or direct impact on Lyft’s business at this time “. Uber a admitted that” The rule proposed today has a measured approach, essentially taking us back to the Obama era, when our industry was growing exponentially. “. While specifying that he It is critical that the Biden administration continues to hear from the more than 50 million people who have found the opportunity to make a living with companies like ours “.
The tone in the official documents is slightly different. According to New York Times Lyft and Uber said their entire business model would be revised, labor prices would rise by 20-30%. The two companies are fighting face to face in every state in the United States over similar regulations.
There is a reason: on the day the Department of Labor press release was published, October 11, Uber’s price dropped 10%, Lyft’s 12%. Companies, unions, workers and others have had the opportunity, since the proposal was published on Thursday, to comment on it for 45 days.
