Department of Labor Proposed Rule - Our Take
Today the Department of Labor released a proposed rule. There is no immediate or direct impact on the Lyft business at this time. The release today will allow for 45 days of public comment. This is just the first step in what is likely to be a longer process before any final rule or determination is made.
Importantly this rule:
Does not reclassify Lyft drivers as employees.
Does not force Lyft to change our business model.
Is similar to the approach the Obama Administration used to determine employee status. This approach previously applied to Lyft and app-based companies and did not result in reclassification of drivers.
Was expected on day one of this Administration.
Any new rule that addresses independent contractor status should be informed by those it impacts most: the workers. App-based work, in particular, is fundamentally different from traditional 9-to-5 work. Nowhere else can you find the same minute-by-minute flexibility to decide when, where, and for how long you want to earn. This type of independence and flexibility is the primary reason people turn to app-based work in the first place. Lyft will continue to advocate for laws like the one in Washington state which gives workers what they want: independence plus benefits and protections.
In survey after survey, in state after state many drivers say they choose this work because of the independence and flexibility it provides. Federal policy makers should listen to a large and diverse group of drivers before publishing a final rule.
In terms of specifics:
96% of Lyft Drivers work or are students in addition to driving with Lyft.
87% of Lyft Drivers say that Lyft and other app-based work allows them to earn money while pursuing other endeavors, such as starting a new business, pursuing education, or interviewing for full-time jobs.
95% of Lyft Drivers drive fewer than 20 hours per week. These drivers give the majority of rides on the Lyft platform.
92% of Lyft Drivers support a policy proposal under which drivers would remain independent contractors, maintain the current flexibility they enjoy, and be given some, but not all, of the benefits that employees receive.
Certain statements contained in this announcement are “forward-looking statements” within the meaning of the securities laws, including statements about regulatory matters. Such statements, which are not of historical fact, involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in Lyft’s filings with the Securities and Exchange Commission. Lyft disclaims any obligation to update any forward-looking statements to reflect future events, except as required by applicable law.