Reference no: EM133289659

Smartphone driven services like Uber, Lyft, and DoorDash allow customers to quickly and easily arrange for a ride or get food delivered. At the same time, they also provide just about anyone with a driver's license and a working automobile the ability to earn money as drivers.

For many people who work for these companies, the goal is simply to earn additional income over and above their primary job. Others prefer the freedom and flexibility of "gig work," and may be employed in freelance or contract work in a variety of roles simultaneously.

At the same time, some people would prefer the stability, benefits, and job protections normally associated with full-time employment to apply to all workers. In addition, union leaders, as well as some politicians, have criticized the growing gig economy for reducing the bargaining power of workers and giving more control to corporations.

Reacting to the rapid growth of the ride-share companies, California passed a law in 2019 that required companies to treat contract workers as employees. In reaction, Uber, Lyft, and DoorDash threatened to cease operating in the state, and then supported a ballot initiative known as Proposition 22. Prop 22, as it is known informally, modified the 2019 law by allowing drivers to remain classified as independent contractors but to be eligible for some benefits, such as better pay and accident insurance (Conger & Browning, 2021).

Prop 22 passed in November 2020 with 59% of the vote, which seemed to settle the issue. However, in August 2021 a judge in California ruled that Prop 22 was unconstitutional for several reasons, including a provision that prevented drivers from unionizing (Conger & Browning, 2021). The ruling will most likely be appealed in the future, meaning that this controversial issue will be with us for some time to come.

QUESTIONS

Should companies like Uber, Lyft, and DoorDash be free to run their businesses as they see fit? Should drivers have the freedom to unionize? Whose freedom is more important?

Many employers now operate using a combination of full-time employees and contract workers. From the employers' perspective, this allows for greater flexibility, and gives people who don't want to work full-time an opportunity to contribute. On the other hand, this arrangement may also be seen as creating a hierarchy in which the full-time employees earn better pay and benefits while the contract workers don't share equally in the prosperity. From the standpoint of equity, are companies that rely heavily on contractors treating all their workers fairly?