Uber looking into benefit plan for app-based workers
Uber Technologies Inc. is pitching provincial governments on a new benefit plan designed for app-based workers, including those who don't work for the company, in a move that aims to address job quality issues for the emerging gig economy.
The San Francisco-based company's proposal would see app-based companies that operate in Canada contribute a percentage of funds toward a worker's health and dental benefits or retirement plans based on how much time they spend on the platform.
While the details have yet to be fully defined, much would depend on which province an individual works in. The proposal also represents an olive branch to policymakers to develop a solution that seeks to improve the lives of workers in the gig economy who have often complained about being subjected to poor wages, low job security, and no benefits.
"What we heard is that flexibility and independence are the reasons people use these platforms," said Andrew Macdonald, senior vice-president of mobility and business operations at Uber, in a phone interview.
"The majority of drivers and delivery people do this part-time and will often balance it with other responsibilities. So, we want to put forward a proposal and then work with governments on how we bring that to life to protect that flexibility and independence, but also add self-directed benefits for companies like Uber to contribute to."
Uber's Canadian benefit proposal comes after the company and its ride-sharing rival Lyft Inc. introduced a minimum wage and health-care subsidies for their California workers in December. The additional compensation was announced following the adoption of a ballot measure that would allow them to categorize their drivers as independent contractors but not full employees.
Macdonald said Uber's Canadian plan would, for example, see a driver based in Vancouver who works 35 hours a week receive up to $1,100 in contributions that could be used for a flexible benefits plan. If Uber's proposal becomes law, Macdonald estimates that Uber could contribute at least $40 million annually to its workers' benefit funds in Canada.
When asked why Uber doesn't just give its drivers and delivery people benefits without government support, Macdonald said that there are limits on what kind of extra benefits Canadian law permits the company to offer independent contractors.
"The reality is that in order for us to provide benefits and protections to drivers and delivery people, we do need to modernize some elements of the law within provinces that govern worker classification issues," he said.
There were roughly 1.7 million Canadians who worked in the gig economy before the COVID-19 pandemic, with most earning less than $5,000 annually, according to a report released by Statistics Canada in May. StatsCan noted that the low wages for many gig workers mean that they have been ineligible to qualify for certain employment insurance benefits during the pandemic.
However, the rise in unemployment in Canada's labour force is also likely to see many Canadians turn to opportunities in the gig economy, according to a report published by Policy Options in October.
Macdonald said that Uber’s proposal would be well-timed for governments to consider amid signs that the Canadian economy is getting back on track with the COVID-19 vaccine rollout underway.
"We really think that decades-old binary choice between being an employee and independent contractor is dated and doesn't reflect the nature of work today. It certainly doesn't reflect the nature of work going forward," he said.
"Just as the world is looking at this as a reset moment on a whole bunch of issues, we're looking at this as a reset moment on worker status."