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UBER Announces Industry-Wide Benefits Fund for Canada Workers
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Uber Technologies (UBER - Free Report) has proposed a flexible benefits fund for app-based workers in Canada. The fund would be enabled by Canada’s provincial governments and managed by delivery and rideshare companies.
Uber, its rival Lyft (LYFT - Free Report) and other gig companies that classify their workers as independent contractors, have been drawing flak for a while now on the grounds that their drivers and delivery staff are being misclassified and denied employee benefits such as overtime pay, healthcare benefits, unemployment and workers' compensation. Both Uber and Lyft carry a Zacks Rank #3 (Hold).
Having faced legal action regarding worker misclassification, gig companies including Uber had funded a ballot initiative in California last year, where majority of the voters supported the independent contractor status for its workers. This exempted the companies from the California state law, which would have forced them to reclassify their workers as employees. Recategorizing workers as employees would quite naturally raise labor costs for the companies.
The California ballot measure, however, provides workers with a number of benefits, including a certain amount of guaranteed earnings, a healthcare stipend and accident insurance for on-the-job injuries. Uber and the other gig companies are willing to provide additional benefits to workers but contend that their workers enjoy the flexibility they have as independent contractors.
Coming back to Uber’s proposed flexible benefits fund, all gig companies would provide data on worker hours and earnings under the plan. Delivery workers and rideshare drivers would qualify for the benefits fund only after they meet certain specific engaged hours per quarter, which would be aggregated across all companies in the gig industry. Workers would be able to use the funds for health care and dental benefits, life insurance, retirement contributions, as well as educational expenditures.
Image: Bigstock
UBER Announces Industry-Wide Benefits Fund for Canada Workers
Uber Technologies (UBER - Free Report) has proposed a flexible benefits fund for app-based workers in Canada. The fund would be enabled by Canada’s provincial governments and managed by delivery and rideshare companies.
Uber, its rival Lyft (LYFT - Free Report) and other gig companies that classify their workers as independent contractors, have been drawing flak for a while now on the grounds that their drivers and delivery staff are being misclassified and denied employee benefits such as overtime pay, healthcare benefits, unemployment and workers' compensation. Both Uber and Lyft carry a Zacks Rank #3 (Hold).
Having faced legal action regarding worker misclassification, gig companies including Uber had funded a ballot initiative in California last year, where majority of the voters supported the independent contractor status for its workers. This exempted the companies from the California state law, which would have forced them to reclassify their workers as employees. Recategorizing workers as employees would quite naturally raise labor costs for the companies.
Uber Technologies, Inc. Price
Uber Technologies, Inc. price | Uber Technologies, Inc. Quote
The California ballot measure, however, provides workers with a number of benefits, including a certain amount of guaranteed earnings, a healthcare stipend and accident insurance for on-the-job injuries. Uber and the other gig companies are willing to provide additional benefits to workers but contend that their workers enjoy the flexibility they have as independent contractors.
Coming back to Uber’s proposed flexible benefits fund, all gig companies would provide data on worker hours and earnings under the plan. Delivery workers and rideshare drivers would qualify for the benefits fund only after they meet certain specific engaged hours per quarter, which would be aggregated across all companies in the gig industry. Workers would be able to use the funds for health care and dental benefits, life insurance, retirement contributions, as well as educational expenditures.
Key Picks
Some better-ranked stocks in the Internet - Services industry are Internet Initiative Japan (IIJIY - Free Report) and Shopify (SHOP - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Internet Initiative Japan and Shopify have rallied more than 60% and 36% in a year’s time, respectively.