Actions by on-demand economics groups dive into comments from US labor official

More than $ 15 billion was wiped off Thursday morning from the value of America’s largest free-market companies, after the U.S. Secretary of Labor suggested some workers should be classified as employees.

Shares of ride-sharing pioneers Uber and Lyft and food delivery service DoorDash fell 5-11% after Marty Walsh told Reuters he believes workers should be treated like employees in “many cases “.

“In some cases [workers] are treated with respect and in some cases they are not, ”he told the news agency. “And I think it has to be consistent across the board.”

Investors have taken the comments, from the head of a department with considerable influence on the interpretation of US labor law, as a significant threat to companies whose business models are based on the controversial status of “independent contractor” of companies. workers. This allows key costs, such as fuel and maintenance, to be passed on to the worker, and usually comes with fewer protections and benefits.

“These companies are making profits and income and I am not [going to] blame anyone because that’s what we do in America. . . but we also want to make sure that the success spills over to the worker, ”Walsh said.

He was planning meetings with wholesale economy companies in the coming months to discuss the matter, Reuters reported.

“Uber believes we should advance policies to improve self-employment, not eliminate it altogether,” the ridesharing group said after Walsh’s comments were posted.

“But what the drivers think is more important than what we think. Survey after survey, the vast majority of employees using apps want to remain independent because it allows them to work when, where and how they want with a flexibility that no traditional job can match. “

Elizabeth Jarvis-Shean, DoorDash’s chief policy officer, said her drivers – whom she calls Dashers – worked an average of just four hours a week, and she called for a discussion of “modern policies” around work.

“The Dashers have overwhelmingly told us that they value the flexibility to win when and how they choose,” she said.

Lyft did not return a request for comment.

The Wages and Hours of Work Division of the Department of Labor is responsible for enforcing national criteria according to which workers are employees or independent contractors. The Trump administration has sought to apply a more flexible interpretation of the criteria, but Walsh’s Department of Labor has offered to reverse the changes and is awaiting White House approval.

Concert companies have aggressively fought more localized efforts to secure reclassification, notably in California. Companies have warned that changing the model to classify workers as employees would mean higher prices for customers and fewer and less flexible jobs for drivers. Workers should adhere to rotation schemes rather than the current ad hoc connection for jobs, they say.

Uber, both in the US and overseas, has been pushing for what it calls a “third way” of employment that falls between formal employee status and less independent contractor agreement. stable. In the UK, the country’s highest court has forced Uber to reclassify its carpooling drivers as “workers” – a designation specific to the UK that offers certain benefits, such as paid time off and pensions.

The United States Bureau of Labor Statistics estimated that in 2017 there were more than 55 million workers in the United States, a number that is expected to have increased significantly since then.

During the pandemic, when demand for some site worker services plummeted, many workers turned to specially designed government emergency programs to make ends meet.

“If the federal government had not covered workers in the odd-job economy,” Walsh added, “these workers would not only have lost their jobs, but they would not have had unemployment benefits to advance their lives. family. . .[and]we would have a much more difficult situation across the country.

Walsh’s comments are the latest signal that the Biden administration intends to prioritize the issue of workers’ rights. Speaking to Congress on Wednesday, President Joe Biden reiterated his support for the labor movement, saying, “The middle class built this country. And unions are building the middle class. ”

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