Gig economy jobs equivalent to a 9% raise, workers say


Setting your own hours is the equivalent to a 9% raise, gig economy workers say.

That’s according to an economist who has quantified just how much that flexibility means to workers. It comes after the now-defunct ballot question involving the status and benefits for app-based drivers has derailed.

As the gig economy has expanded in recent years, so too has the debate over the pay and benefits for the people who deliver takeout food or groceries, or shuttle other people around in their own vehicles. Many drivers who work as independent contractors are able to set their own schedules and can elect to work when driving pays more, but they don’t have the same benefits or protections as employees.

But having the ability to set one’s own schedule is valuable to gig economy workers, Kathryn Shaw, a labor economist at the Stanford Graduate School of Business and the Stanford Institute for Economic Policy Research, found. A report she conducted at the behest of the campaign promoting the app-based drivers ballot question found that “the ability to set one’s own schedule is the equivalent of an approximately 9% increase in wages.”

“Reclassifying app-based economy workers as employees is likely to lead to significantly reduced scheduling flexibility, workers to the detriment of who often value this flexibility greatly,” Shaw wrote.

Companies like Uber, Lyft, Instacart and DoorDash have said their business models would not work if their drivers were considered employees, and they championed a ballot question that would have allowed them to continue to classify drivers as independent contractors while also setting a wage floor for The time drivers are actively engaged with a customer and giving them access to benefits like paid family and medical leave and accrued sick time.

The state Supreme Judicial Court last month ruled that the question did not meet Constitutional muster and kept it off the November ballot.

During a March hearing on the topic, lawmakers zeroed in on the business reasons that companies like Uber have decided not to classify their drivers as employees. Rep. James Murphy, co-chair of the Financial Services Committee, reminded Uber that, “technically, they could be employees, and they could have flexibility. There’s nothing precluding flexibility in the law. What I’ve heard you say today is that the way your model is set up, that status doesn’t work for you.”

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