Gerber & Elkins Workers’ Compensation Attorneys is proud to offer an annual scholarship essay contest to help students achieve their dream of earning a college degree. This year, we asked students to tell us what they thought about the topic of benefits for independent contractors like gig workers by answering the following prompt:
Should Uber, Lyft drivers and other gig economy workers be reclassified from independent contractors to employees with benefits (in light of recent California measure that failed to pass)?
After reviewing more than 150 thoughtful essays, we’re pleased to announce this year’s winner—Connor Brown from National Louis University.
Here’s his winning essay:
The rise of the gig economy has revolutionized the way people work. In this arrangement, workers forego traditional work arrangements in favor of freelance or contract-based employment. There are many benefits to this kind of work: flexible environment and schedules, little to no job oversight, and steady work, to name a few. Freelancers in the United States, however, often have difficulty accessing healthcare. As the gig economy continues to grow, this arrangement will become a greater restraint on individuals seeking flexible, sustainable employment options. The companies at the forefront of this industry must therefore reassess the healthcare provisions for freelancers without restricting the liberties they desire.
While ride-share services like Uber played a large role in popularizing this approach to work, the gig economy has now expanded far beyond transportation to make up a significant portion of the U.S. workforce. By 2018, some 36% of the workforce relied on some degree of gig-based income (McFeely and Pendell). As the effects of Covid-19 linger into 2023, that figure has increased by 10%, or roughly 73.3 million people. Economists expect this number to grow to another 3.1 million by next year (Wilson, 2023).
As large as this workforce is, though, it is plagued by uncertain financial circumstances, especially when it comes to healthcare. A 2018 study found that 76% of gig workers “fear[ed] facing an unexpected medical bill” (Edison Research). Since Healthcare.gov’s deployment in 2011, individuals have been able to purchase their own coverage without an employer’s mediation. Freelancers may thus choose to purchase health insurance without sacrificing flexibility. Still, these plans are costly. The average marketplace plan in my state of residence in 2023 runs at $561 per month (Shepherd, 2023), while Uber drivers here earn roughly $2,900 each month (Ziprecruiter). Assuming a driver uses Uber as her sole means of income, she would devote approximately 20% of her monthly wages to health insurance, leaving little cash leftover to cover basic living expenses.
How should these companies respond? The status quo will leave millions of workers vulnerable. Some have proposed eliminating the contract-based employment model from these organizations entirely, suggesting instead they reclassify freelancers as full-time employees under traditional management structures that allow for access to benefits. But this approach restricts the flexibility freelancers often seek.
What I propose, then, is a middle option. Gig economy employers should not disrupt the independence of their freelancers but should allow for more cost-efficient health coverage for qualifying workers. They can achieve this by providing Health Savings Accounts that employees must opt to receive. To qualify, the employee would submit proof that she depends on one company’s services for her primary income (e.g., by driving only for Uber and not also for Lyft). This would ensure only the most vulnerable freelancers obtained access to health coverage while minimizing financial strain on employers.
With the gig economy expected to grow in the coming years, it is vital that the organizations at the core of the industry set the precedent for ensuring the better treatment of freelancers. With a great portion of their revenues generated by such workers (Iqbal, 2023), to not extend health coverage options to them is a grave misstep. The health of the gig economy rests on the fair treatment of its workers.
References
Edison Research. (2018, December). The Gig Economy. Edisonresearch.com. http://www.edisonresearch.com/wp-content/uploads/2019/01/Gig-Economy-2018-Marketplace-Edison-Research-Poll-FINAL.pdf
Iqbal, M. (2017, August 10). Uber revenue and usage statistics (2023). Business of Apps. https://www.businessofapps.com/data/uber-statistics/
McFeely, S., & Pendell, R. (2018, August 16). What workplace leaders can learn from the real gig economy. Gallup. https://www.gallup.com/workplace/240929/workplace-leaders-learn-real-gig-economy.aspx
Shepherd, D. (2023, April 12). Average Cost of Health Insurance 2023. Valuepenguin.com. https://www.valuepenguin.com/average-cost-of-health-insurance
What Is the Average UBER Taxi Driver Salary by State. (n.d.). Ziprecruiter.com. Retrieved May 8, 2023, from https://www.ziprecruiter.com/Salaries/What-Is-the-Average-UBER-Taxi-Driver-Salary-by-State
Wilson, N. (2023, April 13). Research shows U.S. gig workers are underprepared for retirement. Forbes. https://www.forbes.com/sites/nigelwilson/2023/04/13/research-shows-us-gig-workers-are-underprepared-for-retirement/?sh=32b5f7237979
About the winner
Connor Brown is a first-year graduate student at National Louis University working toward a master’s degree in clinical mental health counseling.
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Congratulations, Connor, on your winning essay, and best of luck in the pursuit of your degree!
Think you could write the next winning essay? Check out our scholarship page to learn more and find out how to apply.
