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Gig workers handed lifeline by $2 trillion stimulus plan

Uber app being used on a smartphone
Enlarge / The Uber ride-sharing app is seen on a mobile phone.

Washington has answered the increasingly desperate pleas of gig economy executives by agreeing to include hard-up workers among the beneficiaries of the $2 trillion stimulus bill passed by the Senate on Wednesday.

If, as expected, the bill is passed by the House of Representatives on Friday, and signed into law by US President Donald Trump, it will mean rideshare drivers, as well as Airbnb hosts, stand to receive unemployment compensation for the first time.

But, by successfully lobbying for gig workers to receive the same protections as other unemployed people during the coronavirus crisis, the companies risk unravelling their own arguments for not providing any kind of safety net themselves.

“It is getting more and more difficult for Uber and other gig companies to continue the farce that their workers are not employees,” said Shannon Liss-Riordan, a prominent employment rights lawyer.

Harry Campbell, who runs a blog aimed at Uber and Lyft drivers, said the bill offered “a lot of relief” as use of the services plummets.

Rideshare drivers, food deliverers, Airbnb hosts and any other types of freelance workers left out of work will be compensated thanks to the bill, with the precise amount to be determined in accordance with state unemployment laws.

In California, for instance, workers should receive the same amount they would get from their normal hours, capped at $450 per week. Under the banner of “Federal Pandemic Unemployment Compensation,” the bill includes provisions for an additional $600 per week.

Senate minority leader Chuck Schumer called it a “dramatic and historic expansion” of rights for those in non-traditional employment models, and it comes off the back of lobbying by gig companies over the past month.

“My goal in writing to you is not to ask for a bailout for Uber,” Dara Khosrowshahi, Uber’s chief, wrote in a letter to Mr. Trump three days ago. “But rather for support for the independent workers on our platform and, once we move past the immediate crisis, the opportunity to legally provide them with a real safety net going forward.”

Reacting to Wednesday’s Senate vote, Mr. Khosrowshahi said in a statement: “I encourage the House to act on this legislation to address this emergency, and I am committed that Uber will do its part to advocate for new laws that permit companies like ours to provide additional benefits for independent workers going forward.”

Airbnb policy chief Chris Lehane said the company was “deeply appreciative of bipartisan Senate and House leadership for recognizing there is a new sector of the workforce who depend on Airbnb for their monthly economic needs”.

Mr. Lehane had earlier lobbied legislators to offer hosts financial relief, such as tax breaks, and access to funds designed to prop up small business. After travel bans hosts on its platform were forced by the company to give full refunds in regions affected by coronavirus, regardless of the cancellation policy they had agreed with guests at the time of booking.

© 2020 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

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