FTC sends warning to Uber, Lyft, DoorDash and other ‘gig-work’ companies

The Federal Trade Commission announced Thursday that it plans to crack down on the exploitation of gig workers, whom the agency said are entitled to protections regardless of their worker classification.

The commission adopted a policy statement detailing the problems facing gig workers — including misleading claims about their pay and hours, unfair contract terms, and more — and what the FTC plans to do about it. Used to be. Although the commission didn’t mention any companies by name, the message is clear: It plans to have a “gig-work” mainstay like Uber Technologies Inc. Uber,
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Lyft Inc. Lyft,
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DoorDash Inc. dash,
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And Instacart is accountable for the promises it makes to potential workers and how they treat ride-hailing drivers and delivery workers who use their platform.

Gig companies consider their employees to be independent contractors and have struggled to keep doing so. President Joe Biden campaigned to address worker misclassification; This is the first action under his administration that promises to apply specifically to gig companies’ treatment of their employees.

In-depth: the legal definition of ‘gig work’ still in limbo

“No matter how gig companies classify them, gig employees are entitled to protection under the laws we apply,” Samuel Levine, director of the FTC Bureau of Consumer Protection, said in a statement.

Cheri Murphy, a former Lyft driver and an organizer with Gig Workers Rising in California, hailed the FTC’s announcement on Thursday.

“For too long a lot of people have been lured into doing gig work, with the promise of entrepreneurship, which just isn’t there,” Murphy said.

Citing Federal Reserve data, the commission said in its 17-page policy statement that 16% of Americans now make money through “an online gig platform” and that the gig economy “infuses almost every aspect of American life.” touches from delivery to transportation. to domestic services.” The FTC also cited its own report showing that gig workers are disproportionately people of color — 69% of gig workers among Latino, Black, and Asian adults. Including, according to the report, only 12% of workers identify as white.

ALSO READ: Bill to include gig work in federal labor law would ‘effectively get rid of minimum wage and overtime compensation’

According to the policy statement, the FTC will focus on gig-economy issues that include deception or misrepresentation of how much workers can earn and how much flexibility they actually have, as well as the responsibilities placed on workers versus companies. The commission noted that gig companies control gig workers through algorithms, which are hidden in a system that fosters a “power imbalance”, causing workers to suffer losses from “unfair, deceptive and anti-competitive practices”. More are faced and when they do occur such losses are likely to escalate.”

The commission said it plans to supplement the work being done by other federal agencies by investigating illegal business practices and “harm to market participants.” It noted that it has initiated rulemaking proceedings relating to deceptive wage claims, and that it has last sued Amazon.com Inc. Issued related notices to companies like AMZN.
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Which uses the gig-work model for some of its drivers, as well as Uber, Lyft, DoorDash, Instacart and Grubhub.

For more: Uber, DoorDash, Lyft and Amazon could be fined billions if they mishandle wages, FTC official warns

The Flex Association, a trade group representing Uber, Lyft, DoorDash, Instacart, Grubhub, Gopf, HopSkipDrive and Shipt, is owned by Target Corp. Tgt.
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said it was present during Thursday’s open meeting, where the FTC voted 3-2 to adopt the policy statement.

Flex Chief Executive Kristin Sharp said in an emailed statement, “During today’s meeting, we called on activists and advocacy groups to emphasize how app-based work provides the flexibility and freedom that millions of people need to live extra lives on their own terms. can earn income.” “What’s missing in the FTC’s policy statement is the view of the workers the agency wants to protect.”

Uber shares fell in afternoon trading when the FTC’s announcement was issued, but still closed up 0.2% at $33.13 and fell slightly further in after-hours trading. Shares of Lyft ended the session down 0.7% at $16.99, and DoorDash stock slipped 0.2% to $64.41.

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