As an organization committed to supporting the Long Island minority-owned small business community, we have long been sensitive to the challenging environment for starting a business. Attorney General Letitia James’ settlement with Uber and Lyft is a significant victory not only for New York’s ride-share drivers, but also for the state’s budding entrepreneurs, who are looking to follow their dreams and launch their communities' next generation of local businesses, but are in need of income and benefits while doing so.
Many ride-share drivers consider their driving to be a secondary source of income, often as they pursue other work or opportunities. At the Long Island African American Chamber of Commerce, this is something we see often. Many of our small business owners helped get their companies off the ground during those tight, early years through additional part-time work. While this is common for entrepreneurs, it isn’t easy.
Part-time work, or work classified as that of an independent contractor, usually leaves the worker without much-needed benefits and critical pay protections. While flexible scheduling is essential for pursuing their dreams, they are sacrificing other critical needs to maintain it. This settlement demonstrates that there can be another way.
The deal lays out new benefits to ride-share drivers, including up to 56 hours of paid sick leave and a $26 per hour minimum wage. With Uber and Lyft agreeing to offer these new benefits, the attorney general’s office will close the state’s investigation into the employment classification of ride-share drivers, securing the drivers’ status as independent contractors — only now, with benefits typically previously only afforded to full-time employees.
This agreement provides a solution to a problem as old as the gig economy itself. How can we provide benefits and protections to workers while maintaining their flexibility? And how can we do so without putting an undue burden on employers when those workers are only part-time? This settlement will provide immediate tangible benefits to ride-share drivers, while at the same time, enabling them to continue enjoying the flexibility that being an independent contractor provides.
Perhaps even more importantly going forward, this new model of independent contractor work can be replicated for small business owners throughout the state. Amid high-profile legal fights and confusion over the employment status of ride-share drivers and others who earn money through online platforms, New York is cutting through the noise to find a way to provide tangible benefits to app workers such as those with DoorDash and TaskRabbit.
Previously, small businesses that did not need or could not afford full-time employees because of the significant costs would struggle to retain part-time workers who needed benefits that could be provided by large companies elsewhere. These new benefits will make it easier for small businesses to hire independent contractors and provide them with some significant workplace benefits, making small businesses a more appealing option for independent contractors at a lower cost to the business. This will give some 9,000 small businesses on Long Island a leg up against big companies that could afford to hire full-time employees, because now small businesses can lure people who want flexibility and the reassurance that they can afford to take a sick day in their workplace.
The settlement shows that the government is listening to the needs of businesses and workers to create new models of employment. The traditional ways of doing business have changed. It’s high time our governing policies did, as well.
This guest essay reflects the views of Phil Andrews, president of the Long Island African American Chamber of Commerce.