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Lyft and Other Gig Economy Giants Cash In With IPOs Before Labor Laws Catch Up With Them

Fang, Lee
http://theintercept.com/2019/04/01/lyft-ipo-gig-economy-labor-law/

Publisher:  The Intercept
Date Written:  01/04/2019
Year Published:  2019  
Resource Type:  Article

Many platform companies are making initial investors money by going public. Later investors could be on the hook if they have to change their business models to be in compliance with labour laws.

Abstract: 

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Excerpt:

Recent financial and lobbyist filings suggest that the gig economy giants are hoping to get ahead of a wave of enforcement actions, new legislation, regulatory requirements, and lawsuits that could force these companies to finally and formally classify full-time workers as employees.

Virtually every major gig economy company - whether its focus is ride-sharing or grocery delivery - has fought to treat on-demand workers as independent contractors regardless of the amount of time they work. The independent contractor classification generally prevents on-demand workers from engaging in collective bargaining and unionization, and it allows the industry to avoid paying health care benefits and unemployment, complying with standard workplace rules guarding against harassment, or ensuring mandatory breaks....

Despite promises of high pay with flexible hours, ride-share workers have found that they often earn less than $10 an hour after vehicle expenses. Earlier this year, Lyft and Uber drivers faced new pay cuts, fueling unprecedented protests across California....

In filings made to the Securities and Exchange Commission, many gig economy firms concede that their business models rely on misclassifying their entire on-demand workforce as independent contractors.
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