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Illustration: Sarah Grillo/Axios

This week there was a pair of lower-level government roadblocks for the gig economy's path to profitability.

Driving the news: New Jersey fined Uber $649 million for years of back-taxes, including $119 million in interest, for allegedly misclassifying its drivers as independent contractors instead of as employees.

  • This is different from the situation in California, where state legislators are seeking to codify gig economy "employment." In New Jersey, the state's labor department believes Uber skirted existing law.
  • It's the first such state lawsuit ever against Uber, which plans to challenge NJ's determination.
  • If N.J. is successful, many other states could pursue similar claims against Uber and other gig economy companies — the sort of thing that even the best-capitalized of them would struggle to handle.

Also happening: Washington, D.C. is suing DoorDash for allegedly misleading customers about how tips factored into delivery worker pay.

  • Again, the contractor vs. employee dichotomy is at issue. D.C. allows "tipped wages," meaning that businesses can pay certain workers like restaurant servers less than standard minimum wage, so long as tips fill the gap.
  • But, the D.C. attorney general's office tells Axios that it views DoorDash as different because a restaurant server is an employee, not a contractor.
  • DoorDash recently decided to change its tipping policy. But it could be on the hook for costly penalties in D.C., let alone in other jurisdictions that follow suit. And it's hardly the only gig economy company to have used a similar tipping process.

Go deeper:

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Updated 2 hours ago - Politics & Policy

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Illustration: Annelise Capossela/Axios

  1. Health: CDC director defends agency's response to pandemic — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden readies massive shifts in policy for his first days in office.
  3. Vaccine: Fauci: 100 million doses in 100 days is "absolutely" doable.
  4. Economy: Unemployment filings explode again.
  5. Tech: Kids' screen time sees a big increase.
  6. World: WHO team arrives in China to investigate pandemic origins.
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Russian opposition leader Alexey Navalny was detained upon his return to Moscow on Sunday, which came five months after he was poisoned with the nerve agent Novichok. He returned despite being warned that he would be arrested.

The latest: Navalny was stopped at a customs checkpoint and led away alone by officers. He appeared to hug his wife goodbye, and his spokesman reports that his lawyer was not allowed to accompany him.

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President-elect Biden has ordered up a shock-and-awe campaign for his first days in office to signal, as dramatically as possible, the radical shift coming to America and global affairs, his advisers tell us. 

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