Isolated along with his household at house in San Francisco, Uber Chief Executive Officer Dara Khosrowshahi has been making pleading cellphone calls to members of Congress. Khosrowshahi is asking for a bailout—not for his firm, which has instructed traders it ought to have at the least $four billion in money by the top of the yr—however for its idle drivers.
Uber Technologies Inc. and Airbnb Inc., the leaders of the so-called sharing financial system, are struggling throughout the Covid-19 shutdown, however not in the identical means as conventional journey corporations like airways or lodge chains. They’ve constructed their enterprise fashions on offloading as many prices and as a lot threat as attainable to their suppliers. Uber doesn’t need to pay salaries for drivers with little or nothing to do. Now it’s these Uber drivers, in addition to Airbnb’s hosts, who’ve to fret about paying for vehicles and homes that aren’t producing revenue as they depreciate in worth.
The corporations are hardly resistant to the fallout from the pandemic. Uber has misplaced about 20% of its market worth for the reason that finish of buying and selling on on Feb. 26, and Airbnb’s board thought-about revising its plan to go public at a latest assembly. But executives from each corporations have centered on drivers and hosts when working the telephones to safe some authorities aid. Uber additionally despatched a letter to the White House and congressional management. Airbnb penned a letter of its personal advocating for hosts.
After an early morning settlement, the huge bailout invoice Congress is working appears set to increase unemployment advantages to impartial contractors and sole proprietorships, bringing aid even to staff for platforms that haven’t been paying for unemployment insurance coverage. In a letter to colleagues Minority Leader Chuck Schumer wrote that the invoice “ensures that all workers are protected whether they work for businesses small, medium or large, along with self-employed and workers in the gig economy.”
Khosrowshahi has spoken to at the least 10 members of Congress prior to now week, in accordance with two folks accustomed to the matter who requested to not be named discussing personal issues. Perhaps his most fruitful name got here with Schumer, the place the senator appeared to point help for defending impartial contractors, the 2 folks mentioned. A spokesman for the minority chief didn’t return a request for remark.
As he makes the rounds, Khosrowshahi has been reminded that being the chief government of a $45.5 billion firm doesn’t routinely make somebody an influence participant in Washington. When he tried to bend the ear of Senate Majority Leader Mitch McConnell, for occasion, Khosrowshahi was shunted off onto a staffer. “He’s not even demanding to talk to the principals,” mentioned Justin Kintz, Uber’s head of policy. “He’s willing to speak to anyone on the Hill who is willing to listen.”
Similarly, Airbnb’s three co-founders have spoken with greater than a dozen members of Congress, ensuring that U.S. hosts— who usually file their taxes as sole proprietors—profit from the bailout package deal, in accordance with two folks accustomed to the matter who requested to not be named discussing personal issues. They’ve additionally enlisted hundreds of hosts to induce lawmakers to incorporate individuals who earn revenue by renting property on Airbnb of their unemployment protections. Airbnb additionally desires to ensure hosts are eligible for Small Business Administration emergency loans.
While each corporations are accustomed to controversy, they imagine they’ve a successful political situation. “To put it in a really fine perspective, 14% of our hosts are from households that include teachers,” mentioned Chris Lehane, a long-time Democratic operative who runs Airbnb’s coverage store.
Uber is the chief of a bigger group of corporations who’ve pushed the boundaries of conventional employment that additionally consists of Lyft Inc., Postmates Inc., and DoorDash Inc. All of them contemplate their staff to be impartial contractors, and don’t present advantages like medical insurance. Airbnb hosts aren’t impartial contractors, however are taking up monetary threat in a lot the identical means that ride-hail or supply drivers do.
Critics of sharing financial system corporations have lengthy argued their enterprise fashions had been creating circumstances that will make staff susceptible throughout a downturn. By offloading threat onto staff, they’re additionally placing strain on the governments to whom it should inevitably fall to help them. For its half, Uber has been arguing that states or the federal authorities create a brand new standing of worker that’s neither completely an worker or an impartial contractor. “The company has been pushing for a third way for seven years,” mentioned Lane Kasselman, a former Uber government who advises startups. The vulnerability of staff now, he mentioned, is “proof of what they’ve been saying all along.”
Patricia Smith, who was solicitor of labor beneath President Barack Obama, mentioned Uber was “taking advantage of a crisis” by pushing for a brand new authorized standing of labor, predicting such a transfer would encourage different corporations to push workers into conditions with fewer advantages. “All you’re going to do is open the door to even more misclassification,” she mentioned.
While Uber is raring to advocate for its staff, it has not moved to make use of the $10 billion it had in money as of the top of February to offer aid itself. Doing so might enhance the chance the corporate could be compelled to proceed paying out these advantages going ahead, the corporate says. Uber has nevertheless mentioned it should compensate drivers who are suffering from coronavirus.
Uber’s flip in the direction of driver advocacy hasn’t gone unnoticed. “A little ironic, right? Uber has spent so much time and money fighting reclassification,” ” mentioned Bradley Tusk, a startup advisor who beforehand labored with Uber however bought his shares. “Now there’s all of a sudden an upside of people being treated as employees and they want it.”
With help from Josh Eidelson.)