Bastian Lehmann is CEO and co-founder of Postmates. The opinions expressed in this commentary are his own.
With tens of millions of Americans unemployed and in need of earning opportunities as the nation continues to deal with the Covid-19 pandemic, flexible work has become more vital than ever. But on-demand platforms, regulators and labor unions have yet to strike the right balance on policies that give workers the protections they need and the flexibility they demand.
As Congress debates how to provide further economic relief, it should not forget independent workers — and it should go one step further by taking on the big question of how to support gig workers in the future. Independent workers deserve a comprehensive, national solution for on-demand work that updates obsolete labor laws and strengthens the safety net for everyone. Courts and state lawmakers across the country have been weighing in, but a state-by-state approach doesn’t meet the moment.
Take what’s happening in California. Last year, California enacted Assembly Bill 5, which aims to prevent companies from misclassifying workers as independent contractors. But simply classifying workers as employees instead of independent contractors is a one-size fits all solution that ultimately strips their ability to work how and when they want, while doing nothing to provide contingent workers with access to benefits or a modern safety net. That has to change. Labor laws that only classify workers as either traditional W-2 employees or self-employed independent contractors have been outdated for a long time.
Even before the pandemic, millions of Americans fell somewhere in between these two rigid categories — and many of these workers are people of color, immigrants and others who have too often been discriminated against in the traditional economy. From freelance writers and artists, to child care and domestic workers, to rideshare and delivery drivers, many independent workers count on being able to put in a few hours on top of traditional jobs to earn extra income. In fact, most couriers who deliver with Postmates only work three to five hours per week. Fixing the law in California would be a step forward in addressing and protecting the modern way we live and work, but would not protect gig workers around the country and outside of the state.
Dara Khosrowshahi, CEO of Uber — the company that has agreed to acquire Postmates pending regulatory approval — recently argued in The New York Times for gig companies to step up and offer more benefits to their workers. While I have similarly argued for our industry to think bigger and bolder about the support we provide to our workers, the pandemic has made clear such reforms must reach beyond any one state — or any one company. Only Congress can step up and provide a national solution to national challenges.
To provide gig workers with what they deserve, we need to put their access to benefits and safety net protections before the long-entrenched politics of worker classification.
There are several avenues worth exploring for a national approach. First, Congress should pass reforms that apply across the entire country. For instance, a patchwork of sick leave proposals from Sacramento to Seattle has offered some employees protections, yet has left millions of self-employed workers without. Congress should immediately establish a permanent national sick leave fund for independent workers.
This would expand the number of workers eligible for the leave by extending access to both employed workers and self-employed workers. Congress could then outline specific qualifying standards and benchmarks based on hours worked, and what benefits and protections should be provided. This is the best way to create opportunity for our country’s entrepreneurial and flexible workers, creating national access to a new benefit.
Second, Congress should break out of the W2 or 1099 binary model altogether and create a new, uniform federal classification standard — one where independent workers can access portable benefits including paid leave, occupational accident insurance and retirement through national savings accounts without running afoul of local classification laws. Because many gig workers use the platforms to supplement their incomes, this approach can help solve the dual challenges of workers who want benefits but can’t unlock them and companies that want to provide benefits but can’t due to outdated laws.
A national portable standard for app-based work can also ensure that benefits are connected to an individual, rather than to a particular employer alone, and so they can be taken from job to job without interruption in coverage or loss of funding for qualifying workers who routinely work across food-delivery or ridesharing apps, for example.
The Affordable Care Act has demonstrated the value of making health coverage more portable. Particular industries, like construction and entertainment, have been providing benefits to a flexible and shifting workforce for decades. But as Covid has underscored the urgent demand for on-demand app-based work, we must meet the national moment by launching such accounts for gig workers and other workers at the federal level.
Third, and perhaps most importantly, we need a much stronger social safety net that makes benefits universal for everyone. Last year, I argued for Medicare coverage for every American. Affordable access to health care or retirement savings shouldn’t depend on where or how you work, nor should discrimination protections depend on the number of employees in your office, your worker classification or your immigration status.
Gig work’s popularity has always been a response to the limitations of traditional employment. With millions of Americans getting some sort of jobless assistance and lacking health coverage, the folly of tying so many of the mechanisms that protect workers to their employment status is crystal clear. Workers need both greater protection and flexible earning opportunities, and we have a responsibility to consider new avenues to solve these challenges.
It’s time to move toward a national solution that supports flexible workers and is reflective of the new reality of how people work.