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　　"Many workers in the sharing economy industry in the United States should be defined as 'employees' and they should receive job benefits. The Department of Labor will continue to communicate with companies in the sharing economy industry in the next few months to ensure that workers in these industries have continuous pay, medical care benefits, paid sick leave, and 'all the average American employee is entitled to.'" Labor Secretary Marty Walsh said so publicly last week.

　　And a regulatory document released by the U.S. Department of Labor this week has made sharing economy travel giants such as Uber, Lyft, Instacart, and Doordash feel the chill, causing their stock prices to fall to varying degrees. This regulatory document may not only directly affect the performance and profit prospects of these companies, but may even directly shake the business cornerstone of the American sharing economy industry.

　　After a statement and a document, the sharing economy giants in the United States have been drumming in their hearts: They finally spent 200 million US dollars to get California, and now they are facing the regulatory nightmare of the US government? What kind of regulatory document is this, and why does the U.S. Department of Labor have to deal with the sharing economy industry?

　　Policy adjustment two factions contend

　　A brief background: The U.S. Department of Labor on Tuesday released a new Federal Register plan to roll back a Trump administration-era regulation. And that Trump administration rule is meant to help companies more easily characterize workers as contractors rather than regular employees.

　　This is not the first time the Labor Department under a Biden administration has intended to rescind the rule. On January 6 last year, just before Trump was about to step down, his administration’s Labor Department officially introduced gig labor regulations; just four months later, the newly installed Biden administration Labor Department announced that it would rescind the regulations, returning to Obama-era policy.

　　The two governments of the United States, left and right, took turns to come to power. After each presidential change, the ministers of the government are completely reshuffled, and various policies are also swayed. After Trump came to power, he revoked many policies during the Obama administration on a large scale, and now after Biden takes office, he also continues to roll back various policies and regulations of the United States. The Labor Department's reversal of the gig work regulations is just one of them.

　　Within a week, however, the Coalition for Workforce Innovation, a chamber of commerce group representing Uber and Lyft, filed a lawsuit against the Biden administration’s Labor Department, shrewdly choosing to sue in the conservative-dominated Texas federal court. There are also obvious left and right positions in the US judicial system, and there is a clear difference between prosecution in California and prosecution in Texas.

　　As they wished, in March of this year, a conservative judge nominated by President Bush Jr. in the Texas federal court overruled the Biden administration’s decision to revoke the previous administration’s gig work law on the grounds that the procedure was illegal. The judge had previously rejected the Obama administration's fair and safe labor laws.

　　The sharing-economy giants have won an initial victory in the lawsuit against the Biden administration's Labor Department. Of course, the Biden administration’s Labor Department immediately appealed, and as is the norm with every change of government, this policy adjustment was once again mired in legal battles from both the left and the right.

　　In view of the fact that last year, the Biden administration’s Ministry of Labor directly revoked the previous government’s regulations and was sentenced to be illegal (only 19 days were given for public comment), and this time, the Biden administration strictly followed the procedures for the introduction of new regulations and announced the new policy plan first. , conduct a 45-day public comment before issuing a formal regulation. It is expected that the entire process will be completed, and the formal regulations will not be promulgated and implemented until next year. Of course, chambers of commerce can still sue in federal court.

　　Employee gig jobs vary widely

　　What is the difference between regular employees and contract gig workers? Why do the Trump administration and the Biden administration have very different stances on this issue, and why do the sharing economy giants fight to the end over this labor regulation adjustment?

　　According to the sharing economy model, whether it is Uber or Lyft, DoorDash or Instacart, the drivers and deliverymen who provide services to consumers are independent contractors signed with the platform. They provide labor services voluntarily. The platform only plays the role of matching drivers and consumers. intermediary role. This means that drivers and delivery people are self-employed workers, not employees of these platform companies.

　　However, at present, most federal and state labor regulations in the United States only apply to regular employees and do not protect independent self-employed workers. Labor laws and regulations that companies must abide by, such as minimum wages, overtime pay, and medical insurance, are also only applicable to regular employees. Therefore, the sharing economy platform does not need to be responsible for many labor security and medical benefits of contracted drivers and deliverymen.

　　It's not just the business models of sharing-economy giants that are affected by the gig law. Because more and more American companies are accustomed to using external individual gig workers to meet labor needs in order to reduce costs. Research by the U.S. Department of Labor shows that it costs a company 30 percent more to hire regular workers than contract gig workers.

　　For example, Meta's hundreds of cleaners went on strike last week at their San Francisco and Silicon Valley headquarters to protest their employers' layoffs and heavy hiring of short-term gig workers. These cleaners are not hired by the Meta administration, but are provided by outsourced companies. Outsourced service contractors are also hiring short-term gig workers to reduce labor costs.

　　Obviously, the Trump administration's gig labor regulations are a merchandising policy that is conducive to reducing employment costs for companies, and the Biden administration's revocation of this law is a pro-union stance of ordinary employees, hoping to force companies to take more responsibility through policy adjustments. It can increase the labor cost and help ordinary employees to improve their salary and insurance benefits.

　　The U.S. Department of Labor wrote in the Federal Register that it had previously decided to continue to observe the regulation of gig workers under the Trump administration, but now decided to move forward with previously proposed changes to the new regulations. The Labor Department believes that continuation of previous regulations could cause confusion and disruption to workers and businesses.

U.S. Secretary of Labor Walsh

　　Sharing economy giant shakes

　　If the Biden administration’s Labor Department successfully enacts the new gig worker bill this time, it will directly benefit millions of cleaners, paramedics, construction workers and contract drivers.

　　They will have the opportunity to be classified as regular employees rather than individual gig workers. This is also the fundamental reason why the sharing economy giants hate the new policy.

　　Labor Secretary Marty Walsh said, "Withdrawing the gig worker statute was an attempt to protect the rights of essential workers, and preventing it from taking effect could undermine labor protections. If employers mistakenly designate workers as independent gig workers, then they lose important pay and protections very frequently.”

　　It is worth mentioning that Walsh served as the mayor of Boston and the Massachusetts state legislator before being nominated by Biden as labor secretary. Before entering politics, he worked for the construction union in Massachusetts and was elected president of the union. Nominating Walsh as secretary of labor is an important move by the Biden administration to bring closer ties with labor unions.

　　What shocked the sharing economy giants even more was that Walsh publicly stated last week that many workers in the sharing economy industry in the United States should be defined as "employees" and they should receive job benefits. Walsh also emphasized that the U.S. Department of Labor will continue to communicate with companies in the sharing economy industry in the coming months to ensure that workers in these industries have continuous pay, medical benefits, sick leave, and "the treatment that all ordinary American employees can enjoy."

　　After his remarks, the Labor Department again introduced new regulations this week, so the outside world interprets this as a sharing economy industry model that may lead to major adjustments. The two shared mobility giants also responded immediately. An official Uber spokeswoman said most contracted drivers want to remain independent because they have more flexibility in deciding when and where to work.

　　CR Wooters, Uber's head of government affairs, said, "This proposed new rule is basically a throwback to Obama-era labor regulations, when our industry was growing rapidly. In an economy full of great uncertainty Today, a Biden administration needs to continue to listen to the 50 million people who are seeking jobs from our companies."

　　Lyft also issued a statement saying that the new rule is still in a 45-day public comment period and will not have an immediate or direct impact on Lyft's business for the time being. Lyft also emphasized that the new rules will not immediately reclassify the platform's contracted drivers as regular employees, nor will it force them to change their business models, but only go back to the labor code standards used during the Obama administration. The announcement by the two shared travel giants is clearly intended to appease investors and stabilize their stock prices.

　　$200 million to get California

　　However, sharing economy giants are no strangers to such regulatory challenges. Because they just went through a regulatory battle in California two years ago. Several giants invested a total of $200 million in ongoing lawsuits with the California government. After the lawsuits failed, they lobbied heavily, and finally succeeded in obtaining regulatory immunity in the referendum.

　　In April 2018, the California Supreme Court unanimously ruled that Dynamax lost the case in a labor lawsuit against the same-day courier company Dynamex and its delivery drivers, arguing that they wrongly defined its drivers as independent contractors, depriving the latter of their rights in the labor law. 's rights. The drivers demanded the labor treatment and benefits that California law stipulates for regular employees.

　　The California Supreme Court also determined three criteria for determining whether a worker is an independent contractor, the "ABC test": A. The worker is not under the control and direction of the employing entity when performing work (whether there is a work contract or not); B. Labor The work performed by the worker is not within the daily business scope of the employing entity; C. The worker engages in such work on weekdays and has independent operation and trade, occupation or business. All three criteria must be met to be considered a contract worker.

　　Affected by the penalty, the California House of Representatives passed Bill AB 5 in September 2019, sent it to California Governor Newsom for signature, and officially implemented it in January 2020. AB 5 state law codifies the aforementioned ABC test into law as a formal criterion for judging whether a worker is a contract worker. The bill was largely unilaterally dominated by Democrats, with only one Republican state lawmaker voting for it.

　　Why is the California government so obsessed with turning ride-hailing drivers into full-time drivers? On the one hand, it is to protect the basic rights and interests of vulnerable groups of workers, and the trade union organization directly determines the direction of votes; on the other hand, it also hopes to increase tax revenue for the California government. Uber, Lyft, Doordash, Instacart, Postmates, if these five companies all comply with California's new labor law, it will add nearly one million full-time employees (there is a situation where one driver signs up for multiple platforms), which means giving the California government Increased Payroll Tax for nearly a million people.

　　Obviously, sharing economy giants such as Uber and Lyft are reluctant to accept this new regulation, and even less willing to give up the online ride-hailing model that they rely on to survive. If drivers are counted as regular employees, then Uber and Lyft in California have become taxi companies called apps. They have to buy expensive medical insurance for hundreds of thousands of online ride-hailing drivers, provide minimum wages, Overtime and sick leave benefits. Likewise, online food-delivery companies like DoorDash and Postmates also have to maintain a costly workforce.

　　In 2019-2020, several sharing economy giants such as Uber, Lyft, Instacart, DoorDash, etc. refused to implement California's new labor laws on the one hand, and fought a one-year lawsuit with the municipal governments of San Francisco, Los Angeles and other cities and the California government. On the one hand, a total of nearly $200 million has been invested, ranging from social media to online platforms to offline advertising, and has carried out overwhelming publicity and lobbying in California, launching a referendum proposal Prop 22, calling on California voters to agree to grant them exemptions from the new labor law.

　　Companies such as Uber and Lyft have emphasized that the new labor law will destroy the online ride-hailing and sharing economy industries, leading to sharp increases in the price of food delivery for California consumers, and they have even threatened to withdraw from the California market. The two online dating companies had withdrawn from the Austin, Texas market for a year. In the California referendum in November 2020, 58.6% of voters supported giving sharing economy giants an exemption from treating contracted drivers as regular employees. The sharing-economy giants have also kept their business models and didn’t have to “deliver on promises” to exit the California market where they are based.