What happens when Uber, Lyft or Taxi driver is injured?
Just a few months ago, drivers around the world went on a 24-hour strike to protest unfair pay working for Uber and Lyft for lack of transparency in the ride-hailing giants’ fare systems, poor working conditions and the lack of benefits.
The protests came just before Uber’s much-anticipated May 10 initial public offering. The strike was timed to grab headlines and bring awareness to the plight of drivers. Uber and Lyft, like other businesses in the so-called “gig economy,” classify their workers as independent contractors, making them ineligible for the benefits of traditional employment, like health insurance, and paid time off.
App hail companies have contracts with their drivers as independent contractor. As it is already known, an independent contractor is a person, business, or corporation that provides goods or services under a written contract or a verbal agreement. Unlike employees, independent contractors do not work regularly for an employer but work as required, when they may be subject to law of agency. This law applies to most taxi companies as well where almost all drivers work at their own time and are not obligated by law to get health insurance through their employers.
While these gig opportunities have given workers greater flexibility, the independent classification has left gig workers vulnerable. The distinction of employee versus independent contractor is particularly important in the realm of workers’ compensation. Gig workers designated as independent contractors who are injured on the job would not be able to rely on the workers’ compensation system for reimbursement of medical expenses and lost wages.
The business model relies on designating labor as independent contractors to avoid paying employment taxes and employee benefits, keeping the gig economy businesses profitable. But those profits are built on the backs of a workforce that have given away their basic rights in exchange for flexibility .
Research has shown that while the App hail companies such as Uber and Lyft try to maximize their profit through this workforce strategy, many of drivers working for them try to wiggle themselves into the labor market hoping to become more as employees rather than just independent contractors so they can qualify for benefits.
There are a few major distinctions between the Uber insurance program and traditional workers’ compensation. Primarily, the Uber program is voluntary for workers, who must pay for the policy out of their own pockets. Workers’ compensation, on the other hand, is mandatory, with employers required to foot the bill.