US Labor Secretary: "Uber Drivers Are Workers"

Controversy Continues Following UK Supreme Court Ruling
Uber and Lyft Stock Prices Plummet

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The U.S. Secretary of Labor's statement that 'gig economy workers' should also be classified as company employees is expected to cause a stir. Following the UK Supreme Court's ruling to classify gig workers as regular employees, controversy over 'worker status' is likely to continue in the U.S. as well.

According to major foreign media on the 29th (local time), Labor Secretary Marty Walsh stated, "In many cases, gig workers should be classified as employees." Gig workers refer to temporary workers who enter into short-term contracts based on the employer's needs. Drivers for ride-sharing companies and delivery workers for food delivery services fall into this category.

Secretary Walsh emphasized the trickle-down effect, saying, "(Companies like Uber and Lyft) are making profits, and no one would complain about that, but we must ensure that those benefits also flow down to the workers."

He added that discussions with gig economy companies are planned over the coming months to address this issue.

Uber and Lyft immediately pushed back. Uber stated in a press release, "What matters most is the drivers' opinions," and argued, "The overwhelming majority of drivers prefer to be independent and have flexible work arrangements." Lyft also said, "Drivers have consistently expressed that they highly value the flexibility to choose when and how to work."

If these companies were to directly employ gig workers as Secretary Walsh suggested, they would have to bear various additional costs, including fixed salaries, sick leave, healthcare services, and unemployment insurance.

Following Secretary Walsh's remarks, the stocks of these companies plunged on the New York Stock Exchange. Uber closed down 6%, Lyft 9.9%, and DoorDash 7.6%.

Meanwhile, according to the U.S. Bureau of Labor Statistics, as of 2017, the total number of gig economy workers was estimated at 55 million.

This content was produced with the assistance of AI translation services.