Nov 22, 2019

The gig economy hits roadblocks from state-level regulators

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.

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London declines to renew Uber's operating license

Photo: Olly Curtis/Future via Getty Images

London's transportation agency declined Monday to renew Uber's license to operate, citing a "pattern of failures by the company including several breaches that placed passengers and their safety at risk."

Why it matters: London is one of Uber's biggest markets, so this is a significant blow to the company.

Uber commentArrowNov 25, 2019

Tech's new labor unrest

Illustration: Aïda Amer/Axios

The tech industry was born largely union-free, but there are signs its long management-worker harmony may be ending.

Driving the news: Companies big and small have been making headlines more commonly associated with old-line manufacturing firms than tech giants.

Go deeperArrowNov 22, 2019

Instacart workers organize for higher wages

Illustration: Sarah Grillo/Axios Visuals

Thousands of Instacart contract "shoppers" — who fetch groceries for one of the largest on-demand companies in the gig economy — have gone on strike for higher wages, the Washington Post reports.

The big picture: Instacart shoppers said their wages were slashed in late 2018 when the company introduced an algorithmic pay system to estimate workers' earnings per job, per the Post.

Go deeperArrowDec 14, 2019