Uber Technologies Inc. and Lyft said a new rule issued Jan. 9 won’t affect their operations or how they classify drivers as independent contractors. Delivery platform DoorDash Inc. also said the new rule won’t impact the classification of its delivery drivers.
“This rule does not materially change the law under which we operate and will not impact the classification of the over 1 million Americans who turn to Uber to earn money flexibly,” Ube said in a statement.
The new rule was released by the US Department of Labor. It uses a multifactor “economic reality” test to determine whether a worker is an independent contractor or not. Others have said the new rule won’t have a large impact when it comes to independent contractor litigation. However, the US Chamber of commerce said the new rule will have significant negative impacts on the economy, and the chamber said it may file suit over the rule.
Lyft noted the new rule is similar to the approach used by the Obama administration, which did not apply to app-based companies.
“While we are still reviewing the new final rule, our initial view is there is no immediate or direct impact on Lyft’s business at this time,” Lyft said in a statement. However, it did say the new rule creates additional complexities.
“The new rule emphasizes a broader approach to determining if a worker is an employee or independent contractor under the [Fair Labor Standards Act],” according to Lyft’s statement. “While the intent of the rule was to provide clarity, this new guidance creates additional complexities and ambiguities for companies and courts alike across the country.”
DoorDash also said the new rule won’t prompt changes to its business.
“We are confident that Dashers are properly classified as independent contractors under the FLSA, and we do not anticipate this rule causing changes to our business,” DoorDash said in a statement. “We will continue to engage with the Department of Labor, Congress and other stakeholders to find solutions that ensure Dashers maintain their flexibility while gaining access to new benefits and protections.”
Uber said its surveys show drivers want their independence. “As this rule is implemented, we look forward to working with the Biden administration and making sure they continue to hear directly from drivers,” Uber said.
Uber noted the new rule does not contain an “ABC test” for worker classification. And it said officials have stressed the new rule is unlikely to result in large-scale classification changes.
The new rule takes effect March 11.