Uber drivers and other gig economy workers were promised unemployment benefits. It may be a long wait.
For millions of Americans who drive for Uber, deliver food with Postmates and rent houses on Airbnb, the $2 trillion coronavirus aid package extends an economic lifeline — offering weekly checks for those trapped at home as a result of the outbreak.
But it could take weeks or more before any relief money reaches the pockets of cash-strapped workers, according to labor rights activists, who say delays threaten to put some people’s homes, families and livelihoods in jeopardy amid this historic economic downturn.
In California, Illinois, Washington and a slew of other states, local unemployment officials are signaling they aren’t yet ready to start processing aid for laborers in what is known as the gig economy. Already inundated with record numbers of jobless claims and lacking federal guidance, many states say they need more time to set up a new system that can process additional benefits — and some say they may not be able to accept applications until later in April.
Until now, many gig workers were ineligible for traditional unemployment benefits, even if driving passengers or delivering goods was their primary source of income. That’s because they are often categorized as independent contractors, not full-time employees, for companies such as Airbnb, Uber, Lyft and Postmates. Those companies don’t remit payroll taxes to the government on behalf of on-demand laborers, making it difficult, if not impossible, for workers to take advantage of safety-net programs.
Congress sought to remedy the gap temporarily. Part of the coronavirus stimulus bill, known as the CARES Act, which was enacted by President Trump on Friday, includes a federally funded pandemic relief program for an array of self-employed people. But it has become increasingly clear to some in the industry that delays in disbursing aid could make it hard for them stay afloat financially.
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The coronavirus law also requires states to administer new benefits to people who are self-employed, a category that includes workers whose primary income comes from working on behalf of Airbnb, Uber and other companies in the gig economy. The new relief fund provides weekly aid to those affected Americans, along with the same extra $600 laid off and furloughed full-time employees are slated to receive for the weeks they are out of a job.
Already, gig workers and labor activists are scrambling to obtain the money — and reporting difficulties in navigating the government’s complicated relief package. In California, the home base for Uber, Lyft and other Silicon Valley giants, state officials don’t appear ready to handle applications, said Veena Dubal, an associate professor at the University of California, Hastings College of the Law, who is an advocate for gig workers and labor rights. She added that some gig workers who have applied for benefits over the past few days have been told they aren’t eligible.
California’s Employment Development Department, which oversees unemployment payments, said Wednesday that it plans to act swiftly but is awaiting key guidance from the U.S. Labor Department, echoing a concern shared by other states, including Maryland and Virginia. The Labor Department did not respond to a request for comment.
Dubal said it’s a sign of the challenge millions of gig workers nationwide are bound to face. “There is a lot of confusion about how the states are going to be rolling out the benefits provided in the CARES Act,” she said.
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In the meantime, some labor activists said, many gig workers remain at risk. Many drivers for ride-hailing apps, for example, cash out their earnings more than once a week, said Moira Muntz, a spokeswoman for the Independent Drivers Guild, a Machinists Union-affiliated group that represents more than 80,000 drivers in New York City. “They’re not even paycheck-to-paycheck — they’re day-to-day,” she said.
In Long Island, Malik said he stopped driving for Uber and Lyft last week, fearing he might catch the coronavirus from one of his ride-hailing passengers and pass it along to his family. Without unemployment benefits soon, though, he said, he may have no choice but to return to the road.
“If I don’t get it,” he said, “I’m going to have to go back to work.”