Are Gig Workers Employees?

Earlier this year, Averlyn Browne, 21, began delivering food with DoorDash, earning extra cash when she wasn’t in class at California University of Pennsylvania.

Some days, she’d do just two or three deliveries before calling it quits; other times, she’d start around 8 a.m. and go until mid-afternoon. Depending on the hours she put in, she’d make anything from $40 to $200 a day. She mostly enjoyed the work, but it had its ups and downs.

“I’ve had good days where I’ll get great tips or I’ll have a good conversation with the person I’m delivering for,” she says. “Or there’d be days where it’s super bad, like restaurants would take forever to make the food.”

Browne’s experience is growing more common as many young people eschew a traditional job in favor of flexible arrangements. They find work through gig economy companies such as Uber, Instacart, and Grubhub, which rely on independent workers who come and go as they please. But now, that business model is being challenged across the country.

Earlier this year, Averlyn Browne, 21, began delivering food with DoorDash. It was a way for her to earn extra cash when she wasn’t in class at California University of Pennsylvania.

Some days, she’d do only two or three deliveries before calling it quits. Other times, she’d start around 8 a.m. and go until mid-afternoon. Depending on the hours she put in, she’d make anything from $40 to $200 a day. She enjoyed the work, but it had its ups and downs.

“I’ve had good days where I’ll get great tips or I’ll have a good conversation with the person I’m delivering for,” she says. “Or there’d be days where it’s super bad, like restaurants would take forever to make the food.”

Browne’s experience is growing more common. Many young people are trading traditional jobs for those that offer more flexibility. They’re finding work through gig economy companies such as Uber, Instacart, and Grubhub. These companies rely on independent workers who come and go as they please. But now, that business model is being challenged across the country.

For consumers, the gig economy is convenient. People can easily hail a ride through Uber or Lyft, have meals delivered by DoorDash, hire a grocery shopper through Instacart, even find someone to help with home repairs on TaskRabbit.

For the workers, there are both pros and cons. Some appreciate the flexibility gig work provides, letting them choose their schedules and the jobs they want.

Others, however, struggle to make ends meet. A 2020 survey in New York City, for example, found that nearly half of gig workers said they worried all or most of the time about meeting their expenses, compared with less than one-fourth of those with conventional jobs.

The problem is exacerbated by the fact that gig workers don’t usually receive benefits. Traditional employers in the U.S. often provide things like health insurance and paid sick days to employees, but gig economy companies categorize their workers as independent contractors and don’t offer benefits. That keeps their fees low; industry officials estimate that making Uber or Lyft drivers employees could raise labor costs 20 to 30 percent.

There’s even debate among workers over how they’d like to be treated. The New York survey found that 57 percent of gig workers said they’d prefer to have an employer who sets their schedule and provides benefits. But others aren’t so sure.

“I love being an independent contractor, and I will fight for it,” says Pedro Acosta, an Uber driver from Brooklyn, New York. Driving for Uber, he adds, lets him take his kids to school or appointments without losing an entire day’s pay.

For consumers, the gig economy makes life easier. With just one click, people can hail a ride through Uber or Lyft, have meals delivered by DoorDash, or hire a grocery shopper through Instacart. They can even find someone to help with home repairs on TaskRabbit.

For the workers, there are both pros and cons. Some value the flexibility gig work provides. They get to choose their schedules and the jobs they want.

But others struggle to make ends meet. For example, a 2020 survey in New York City found that nearly half of gig workers said they worried all or most of the time about making enough to pay their bills. That was compared with less than one-fourth of those with regular jobs.

The fact that gig workers don’t usually receive benefits has made the problem worse. Traditional employers in the U.S. often offer things like health insurance and paid sick days to employees. But gig economy companies consider their workers to be independent contractors. As a result, they don’t offer benefits. That keeps their fees low. Industry officials estimate that making Uber or Lyft drivers employees could raise labor costs 20 to 30 percent.

There’s even debate among workers over how they’d like to be treated. The New York survey found that 57 percent of gig workers said they’d prefer to have an employer who sets their schedule and provides benefits. But others aren’t so sure.

“I love being an independent contractor, and I will fight for it,” says Pedro Acosta, an Uber driver from Brooklyn, New York. Driving for Uber, he adds, lets him take his kids to school or appointments without losing an entire day’s pay.

Some advocates say that gig workers deserve more protection and better pay because the companies couldn’t function without them. This has led to legal battles around the country. New York City passed laws protecting delivery workers and requiring that Uber and Lyft drivers earn at least $17.22 per hour (equal to the city’s $15 minimum wage plus taxes). In Seattle, drivers earn the city’s minimum wage of $16.69 per hour. Massachusetts has sued Uber and Lyft, claiming they misclassified drivers as independent contractors.

And in California, a legal saga is playing out. In 2019, the state passed a law requiring gig companies to make their workers employees. Then, in 2020, voters approved a state ballot measure—backed by Uber, Lyft, and DoorDash—that nullified the law, allowing drivers to remain independent contractors while receiving limited benefits.

Some advocates say that gig workers deserve more protection and better pay because the companies couldn’t function without them. This has led to legal battles around the country. New York City passed laws protecting delivery workers and requiring that Uber and Lyft drivers earn at least $17.22 per hour (equal to the city’s $15 minimum wage plus taxes). In Seattle, drivers earn the city’s minimum wage of $16.69 per hour. Massachusetts has sued Uber and Lyft, claiming they misclassified drivers as independent contractors.

And in California, a legal saga is playing out. In 2019, the state passed a law requiring gig companies to make their workers employees. Then, in 2020, voters approved a state ballot measure that undid the law. The move allowed drivers to remain independent contractors while receiving limited benefits. Uber, Lyft, and DoorDash all backed the ballot measure.

Similar legislation has been proposed in Massachusetts, where at least some workers support more benefits but continued flexibility.

“This is the best of both worlds,” says Pam Bennett, a Boston DoorDash courier.

But this August, a state judge ruled that the 2020 California law was unconstitutional and unenforceable. The decision reopened the debate about how gig workers should be classified—and it likely won’t be the end of it.

“We will appeal, and we expect to win,” says Noah Edwardsen, a spokesman for Uber, adding that the ruling ignored the wishes of voters.

Labor activists have also vowed to continue the fight.

“We’re going to keep putting a spotlight on how gig corporations are putting their profits before their workers,” says Michael Robinson, a Lyft driver from Loma Linda, California.

Many hope this messy debate will ultimately improve working conditions.

“These bills are already affecting us and changing our lives, because these issues have come to the surface,” says Manny Ramirez, a delivery worker in New York City. “This is just the beginning of things that are going to come.”

Similar legislation has been proposed in Massachusetts. At least some workers there support more benefits but continued flexibility.

“This is the best of both worlds,” says Pam Bennett, a Boston DoorDash courier.

But this August, a state judge ruled that the 2020 California law was unconstitutional and unenforceable. The decision reopened the debate about how gig workers should be classified—and it likely won’t be the end of it.

“We will appeal, and we expect to win,” says Noah Edwardsen, a spokesman for Uber, adding that the ruling ignored the wishes of voters. Labor activists have also vowed to continue the fight.

“We’re going to keep putting a spotlight on how gig corporations are putting their profits before their workers,” says Michael Robinson, a Lyft driver from Loma Linda, California.

Many hope that in the end this messy debate will improve working conditions.

“These bills are already affecting us and changing our lives, because these issues have come to the surface,” says Manny Ramirez, a delivery worker in New York City. “This is just the beginning of things that are going to come.”