Permanent Gig – US Labor Market 📦

Permanent Gig – US Labor Market 

During the COVID-19 pandemic, delivery services have exploded in popularity for obvious reasons. Because of this rapid rise in demand, some of these companies have entered the stock market, a notable example being DoorDash. In what has been a trend in the last decade, ride sharing has also become one of the most popular services in the economy due to its convenience. Ride sharing businesses like Uber and Lyft have exploded in popularity, and their tickers are some of the most traded in the market after going public in 2019. The unique part that both industries have in common is their usage of gig workers or independent contractors that carry out their service. There’s a good chance your Uber driver is a gig worker, working a temporary job or side hustle that they can perform on their own hours.

The Biden administration is looking to reverse Trump-era policies regarding gig workers in what could be a landmark decision for these workers. President Trump’s policies made it harder for gig workers to be classified as federal employees, but the Labor Department is looking to revisit rules that would classify gig workers as employees under federal law. This would affect millions of gig workers in the US, and it’ll serve as a wrecking ball to these businesses that rely on gig workers. Being a federal employee comes with minimum wage and overtime pay, a stark difference from the current system. Companies like Uber and DoorDash rely on low-wage and casual labor, and this would increase labor costs along with a plethora of other things. Proponents of Biden’s plan say that this will help transform labor in the US by providing these gig workers with benefits like healthcare and the ability to unionize. However, there is a lot of negative sentiment from these companies with their shares falling by a lot on Tuesday, and we’ve seen this idea get struck down in California due to heavy lobbying. 

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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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