If you want to learn how we can help Canadians get out of this COVID-19 economic pothole we’ve hit, have a chat with your next Uber driver.
Uber drivers and other “gig” economy workers will likely play a big role in our economic recovery — as long as we stay out of their way and let them work. We need them, and they need our help to make sure they can continue to operate with the freedom and flexibility that they require to keep things humming.
More than 1.7 million Canadians work in the gig economy. They have flexible, reliable work, part-time or full-time, that allows them to make a living and provide a timely service at a competitive rate to both businesses and individual Canadians.
And, boy, do we ever need the gig economy to be going full throttle now. The record-breaking second-quarter drop in GDP put the economy in a deep, dark hole that it’s going to have to work hard to get out of. Our unemployment rate is at 12.3 per cent, with 2.5 million Canadians looking for work, not counting those who have given up their job hunt.
That’s why we have to pay attention to what California is trying to do with Uber drivers and make sure this doesn’t get past our border. California legislators picked a fight with the gig economy, especially ridesharing, though for the time being it looks like ridesharing as we have known it has won a stay of execution.
Last month, California legislators deemed the contractors who comprise the sharing economy should instead be treated as full employees and given the benefits that come along with that designation. In response, ridesharing companies like Uber and Lyft shut down their platforms. This clearly was devastating for the contractor/drivers who depend on their driving income to live, as well as on consumers who rely on the affordable services Uber and Lyft provide. Result: on Aug. 20, Uber and Lyft were granted a temporary exemption and opened back up again. This battle is expected to play out in U.S. courts over the next few weeks.
There’s a key lesson to be learned here: we need to embrace innovation and push it forward to meet consumer demand, instead of trying to throw up roadblocks to it. Ridesharing companies exist because taxis weren’t consumer friendly and not great employers, to boot. Uber and Lyft entered the ridesharing space as disruptors to flip the market on its head and solve problems policy-makers refused to. It wasn’t smooth sailing — the disruption of innovation seldom is — but it was what was needed to shift the market towards better meeting consumer needs.
And it didn’t just meet consumer needs, it also created new, agile and flexible work environments for those who wanted to earn a little extra money or sought quick entry into a new full-time job. Ask Uber drivers what they think about losing contractor status. In different surveys, 71 to 82 per cent of California drivers indicated they would prefer to remain as independent contractors and keep the flexibility contractor status affords them. This creates an awkward scenario in which legislators are enacting laws supposedly on behalf of workers who don’t want them. That’s horrible public policy. We don’t want it in Canada.
The highly popular, left-of-centre, U.S.-based VOX news and media platform is a perfect example of how the war on the gig economy creates collateral damage. VOX proudly supported California’s attempt to make gig-economy workers “employees” instead of contractors. But, as a result, it had to permanently fire 200 freelancers in exchange for eight part-time and 12 full-time positions. Do the math. It’s ugly. Laws that create net negative jobs are the last thing we need as we try to get out of the economic hole caused by COVID-19.
Gig economy jobs are often not glamorous but they are a key to rebuilding our economy. Trying to equalize the gig and traditional economies disrespects people who want to remain independent and hurts consumers who value the affordability of ridesharing. And it kills jobs when they are needed most. Which is right now.
- Rick Peterson
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