U.S. Sen. Elizabeth Warren is taking aim at the so-called "gig economy" generated by online companies and workers piecing together odd jobs.
The Massachusetts Democrat said in a speech Thursday that internet-based jobs like those created by Uber, Lyft and other ride-hailing companies offer consumers greater choice and workers more flexibility.
In the surging new economy, workers can pick up "gigs" online, from driving cars to performing household errands through online services like TaskRabbit that match freelance workers with those in need of help.
But Warren warned of a dark side.
She said workers who patch together an income in the "gig economy" are often denied benefits that many traditional employees enjoy — from paid vacation and health coverage to retirement plans, workers compensation and the ability to unionize.
"In a healthy economy, disruption is inevitable. But disruption means it's time to adapt to changing circumstances," Warren said. "Most workers aren't asking for the moon. They want to be able to take care of their families, buy a home, send their kids to college, and save a little money for retirement."
Warren made the comments in a speech in Washington to the New America think tank that was also streamed live on the internet.
Companies like Uber and Lyft have extolled the benefits for drivers — including the freedom of choosing when and how much to work. They also point to the surging demand among consumers who can hail a ride with the tap of a cellphone.
Warren said she doesn't want to pull the plug on the internet, but that doesn't mean companies should have a free ride.
She credited Uber and Lyft for fighting against local taxicab rules that kept prices high and limited access — but said they also fought against rules designed to create a level playing field among themselves and the taxi companies and resisted rules designed to promote rider safety and driver accountability.
Earlier this month, Uber and Lyft suspended their services in Austin, Texas after voters rejected a $9 million campaign by the companies to overturn a safety measure that required fingerprinting drivers. The companies said their background checks suffice and fingerprint databases can be out of date. Fingerprinting can also slow down the process of quickly adding new drivers, they said.
Warren said the ride-hailing business model is dependent in part on "extremely low wages for drivers."
"The much-touted virtues of flexibility, independence, and creativity offered by gig work might be true for some workers under some conditions, but for many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10 percent," Warren said.
Uber announced an agreement last week to create an association for drivers in New York called the Independent Drivers Guild. The guild will offer some benefits and limited protections, but won't be a traditional union, even though it is affiliated with the International Association of Machinists and Aerospace Workers union.
Warren said the problems facing gig workers are similar to those facing temporary workers, contract workers, part-time workers and those reclassified as "independent contractors."
She said the nation needs to guarantee that every worker — even those without an employer — pays into Social Security, is covered by catastrophic insurance, and has some paid leave.
She also said that employee benefits — including health care and retirement — should follow the worker no matter what job they're doing.
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