Biden’s Labor Secretary says most gig workers should be classified as employees—Uber, DoorDash shares plunge
in an interview published Thursday, suggesting for the first time the Biden administration may pursue policy changes that would have far-reaching implications for major companies and millions of U.S. workers.
Key Facts Walsh said the Biden administration is still “looking at it” but that he believes contracted workers—relied on by companies like Uber, Lyft and DoorDash—should be classified as workers “in a lot of cases.” “In some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” Walsh said. Classifying contracted workers as employees would raise costs for companies that depend on them, but Walsh emphasized the importance of allowing the success of companies to “trickle down to workers” by giving them access to “all the things an average employee in America can access,” including consistent wages, sick time and health care. The Labor Department, which sets standards for how employees treat workers, will begin having conversations with companies that rely on these workers in the coming months, Walsh said. “These companies are making profits and revenue and I’m not [going to] begrudge anyone for that because that’s what we are about in America,” Walsh said. “But we also want to make sure that success trickles down for the worker.” 34%. That’s how much of the U.S. workforce was made up of gig workers as of 2017, according to the U.S. Bureau of Labor Statistics, a number that’s expected to rise to 43% in 2020. This is the first signal from the Biden administration on how it plans to act on a years-long debate over how to classify gig workers. Last year, Uber and Lyft successfully funded a voter proposition in California, known as Prop. 22, that exempt the ride-hailing companies from a state law classifying gig workers as full-time employees. As Walsh’s position became public on Thursday, Uber’s shares fell 5% to $55.49, while Lyft dove nearly 11% to $56.81. Food delivery apps GrubHub and DoorDash also took a hit, falling 4.1% to $67.52 and 8.2% to $149.13, respectively, by Thursday afternoon.
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