From Comp Standpoint: Are Uber, Lyft & Grubhub Truly “Disruptive?”
Lamenting that in California, a worker’s status as an employee, vis-a-vis an independent contractor, is an “all-or-nothing proposition,” a U.S. Magistrate Judge, presiding over a bench trial in the Northern District of California, has reluctantly determined that an aspiring actor, who moonlighted as a Grubhub driver for four months in late 2015 and early 2016, was an independent contractor—not an employee—and, accordingly, was not subject to California’s minimum wage, overtime, and employee expense reimbursement laws [see Lawson v. Grubhub, Inc., 2018 U.S. Dist. LEXIS 21171 (N.D. Cal., Feb. 8, 2018)].
The decision echoes a refrain heard from various parts of the workers’ compensation world and beyond, that existing laws are inadequate in handling the disruptive influences of Uber, Lyft, Grubhub, and other firms within the so-called “gig economy,” whose work forces are often made up largely of episodic, part-time workers. And yet, are existing laws really so inadequate? Are gig economy firms actually so disruptive that the workers’ compensation framework is not equipped to handle the issues presented? Do we really need some new third category of worker to respond to Uber and Grubhub? I argue below that the gig economy is not nearly as unique and troublesome as some would have us believe. Moreover, lessons from the distant past should show us that existing laws are more than sufficient to meet the demands of today and tomorrow.