When Uber convinced us it was okay to hop into a stranger's car, it also forced us as a society to rethink how we classify work. Is that person in the driver seat an employee of Uber (as several class action lawsuits allege), an independent contractor (as Uber claims), or something else entirely?
Well, new research from the Economic Policy Institute says the Uber employment structure isn't as novel as it seems. "Gig economy" companies like Uber argue that their workers aren't employees because they make their own hours and work independently, while workers of those companies say they are employees because they're required to follow strict sets of guidelines, such as accepting a minimum number of jobs per week.
The researchers looked into both sides' claims and found that Uber workers look a lot like employees.
"Various on-demand employers argue that gig work, like Uber and Lyft, represent a huge shift in the relationship between workers and employers and the W-2 status just doesn’t apply," EPI President Lawrence Mishel said. "In fact, when you look at the realities of being an Uber driver, it is difficult to see something that differentiates it from other types of employment."
Recently, the idea that gig-economy workers required a new category of work gained steam after economists Seth Harris and Alan Krueger published a paper calling for the establishment for a third status called “independent worker" in December. The authors argued that it was too hard to calculate gig workers' hours because they could be running errands or working for a competitor—having both the Uber and Lyft apps running, for example—while 'on the clock.'
(Krueger conducted that study independently, but previously co-wrote a study commissioned by Uber.)
The EPI research found this idea "empirically flawed."
"Uber can and does measure the time drivers have their apps on, to the minute," it said.
"The notion that drivers can be working two apps and doing personal chores all at the same time ignores the reality," Mishel said. "Yes, they are free to turn on the app whenever they’d like, but they are not free to ignore the app when they have it on since they get fired for low acceptance rates."
The reality, the EPI said, is that Uber drivers are employees because they must follow Uber's strict guidelines when on the job, or else face being booted from service. This, it said, makes them entitled to benefits like workers’ compensation insurance, unemployment and a minimum wage.
The EPI's findings seem all the more important in the light of another recent study that Krueger did: over the past 10 years, all of America's net job growth has been in "alternative work arrangements." Gigs are the new job.