🚘 The unemployment dilemma for Uber and Lyft

Ride-sharing drivers have earned an important victory in being able to receive unemployment benefits in California, but they fear they’ll lose the bigger prize of being considered employees.

  • Earlier this year, California enacted Assembly Bill 5: It required companies like Uber and Lyft to offer independent contractors many of the same benefits as workers. But Uber and Lyft are challenging the law in court. 

  • When the pandemic struck, federal unemployment rules changed: The Pandemic Unemployment Assistance program gave independent contractors the ability to file for unemployment, which they previously could not do in most states.

  • To file, independent contractors must state they are independent contractors: And that’s the dilemma for ride-sharing drivers in California. They think Uber and Lyft will use their self-identification as proof they are independent contractors and not employees. One California driver, who is getting $767 a week in unemployment benefits, is concerned he will lose overtime back pay he is owed. 

The Verdict

Legal experts believe Uber and Lyft will use the self-identification on the unemployment forms in their legal challenges, but most say the drivers will prevail. And in New York, there’s arguably a greater problem for gig workers: They’re having to sue to receive their unemployment benefits.