Uber and Lyft Shares Crash After US Labor Secretary Declares Drivers as Employees
Transport companies Uber, Lyft and DoorDash lost millions of dollars after US Labor Secretary Marty Walsh said drivers and couriers could not be considered gig workers and should be reclassified as company employees.
“We are looking at it but in a lot of cases gig workers should be classified as employees... in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” Walsh told Reuters in an interview. “These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America. But we also want to make sure that success trickles down to the worker.”
According to official figures, Uber shares closed down 6%, while Lyft shed nearly 10%. DoorDash closed down 7.6%.
Previously, companies avoided the formal employment of hundreds of thousands of employees in order to avoid the cost of unemployment insurance, but this situation does not suit either the drivers themselves or the government, where the interests and rights of citizens are violated.
The pandemic has also made its own adjustments to companies' profits. All three companies recorded more than $ 1.5 billion in losses last year, when the drivers were not listed as employees of the companies.
2021 could be even more damaging to businesses if employees are formally employed.
Image:Global Look Press / Yuri Gripas - Pool Via Cnp