A major threat that has loomed over so-called on-demand companies is the potential of new labor definitions that would force the companies to treat contract workers like traditional employees.
Now, in an attempt to shift focus away from labor classifications, some leading on-demand start-ups such as Lyft and Instacart have formed a somewhat unlikely alliance with labor groups to explore ways to better support contract workers without necessarily creating new laws. In a letter published on Tuesday, the coalition called for easier and more expansive access to the sorts of benefits that are traditionally enjoyed by full-time employees.
For “the millions of other independent workers across the country, it’s time to explore modernized, portable systems,” Logan Green, the chief executive of Lyft, said.
The group — which includes a total of 37 start-ups, venture capitalists and labor advocates — did not offer clear proposals for how they would help the nation’s growing freelance work force obtain benefits like worker’s compensation, retirement savings or sick leave. And many fundamental questions remain unaddressed, like whether companies should contribute financially to benefit plans.
But the coalition members said they will explore policy proposals that follow the model of the Affordable Care Act, which has made it easier and less expensive for many contract workers to get medical insurance. They also raised the idea of centralized human resource platforms, essentially easier ways for workers to connect to vendors of insurance and other benefits.
“We are in agreement that flexible work should not come at the expense of desired economic security,” the group said in the letter, which is addressed to federal and state regulators.
Many new start-ups have faced questions about their relationships with their workers. Drivers for Uber, which is not part of the coalition, and workers for Handy, a household chores service, have argued in lawsuits that they accumulate enough hours to constitute full-time status but aren’t being given benefits such as sick time, vacation and life insurance. Handy’s chief executive is a member of the coalition.
Regulators in California and other local jurisdictions have proposed redefining contract workers as employees for on-demand companies like Uber. Such a move could upend some on-demand businesses, which often rely on lower labor costs to offer cheaper services.
“We believe these issues are best pursued through policy development, not litigation, with orientation towards action in the public, private and social sectors,” the group said in its letter.
The coalition, which includes Anne-Marie Slaughter, the president of New America, and think tanks such as the Aspen Institute, brings together an unexpected alliance of interests. Led by Greg Nelson, a former adviser for the White House’s National Economic Council, the coalition has been meeting for four months to come up with broad principles they can agree upon.
In the end, they shared similar pragmatic interests. On-demand companies are scurrying to find ways to fight off lawsuits and potential laws while also addressing growing public concern about how the companies provide for workers. Labor advocates such as the Service Employees International Union have toiled unsuccessfully at advocating for new laws. They say their best shot at helping workers get more benefits is by working with the tech start-ups.
“Change is inevitable — it’s the progress that’s optional,” Andy Stern, president emeritus of the SEIU, said. “The people who have signed onto these principles are committed to trying to find a constructive way to make progress in building a 21st-century economy and companies that also promote flexibility and security for workers.”