DoorDash, Uber, and other ride-hailing gig workers are expected to benefit from the new rule proposed by the U.S. Department of Labor.
(Photo : Photo by Michael M. Santiago/Getty Images)
A Doordash sticker is seen on a window at Mallenche Mexican Grill in the Flatbush neighborhood of Brooklyn on December 04, 2020 in New York City. Food delivery startup DoorDash Inc is expected to raise its U.S. initial public offering up to $3.14 billion.
For the past years, these mobility service providers have been relying on contractual drivers to keep their businesses alive.
Since they are considered contractors, they are not entitled to the benefits provided by these companies to regular employees.
But, the Biden Labor Department seeks to change this situation so that drivers can also receive benefits and better salaries.
DoorDash, Uber Gig Workers to Benefit From New DOL's Proposal
According to Reuters' latest report, if the new rule proposed by DOL is approved, it could drastically change household incomes, life quality, as well as how ride-hailing companies hire and profit.
(Photo : Photo by Scott Olson/Getty Images)
An Uber driver arrives to pick up a passenger at Midway International Airport on May 09, 2022 in Chicago, Illinois. Uber plans to cut spending and hiring in an attempt slow the company's plummeting stock price, which is down nearly 50 percent for the year.
Also Read: Federal Judge Says Uber Doesn't Need to Provide Wheelchair-Accessible Service to its Users
U.S. officials are expected to implement the new rule as early as 2023.
"Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages," explained U.S. Labor Secretary Marty Walsh.
On the other hand, AFL-CIO President Liz Shuler explained that the latest proposal would allow the U.S. government to ensure that ride-hailing workers are protected from misclassification.
Uber, Doordash Negatively Affected
While gig workers are expected to benefit from the proposal of the Biden Labor Department, Uber, DoorDash, Lyft, and other mobility service companies, are experiencing negative effects.
CNBC reported that after the new rule was confirmed, companies' stocks suddenly plunged on Tuesday, Oct. 11.
Uber's stocks decreased by 8%, and DoorDash's shares dropped by 6%. Aside from them, Lyft also fell around 10%.
Of course, ride-hailing companies defended their business setups, saying that their contractual model offers flexible schedules, which are quite attractive to workers.
But, labor experts disagreed with their statements, saying that Uber and other ride-hailing companies only use this business model to reduce costs.
In other stories, the company has confirmed the DoorDash data breach.
Meanwhile, the Uber Rewards recently ended, allowing the app to focus on subscriptions for perks.
For more news updates about Uber, DoorDash, and other ride-hailing apps, keep your tabs open here at TechTimes.
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Written by Griffin Davis
