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Since the ridesharing apps don’t pay into unemployment insurance for their drivers, those driving for Uber and Lyft have reportedly received $80 in government assistance throughout lockdown. Tens of thousands of drivers have turned to the U.S. Small Business Administration’s Economic Injury Disaster Loans program, which was established to provide assistance to small businesses, entrepreneurs, and independent contractors during the pandemic.
And according to an investigation by the Washington Post, this makes their drivers one of the largest groups to benefit from the program — which in turn has made critics believe that Uber and Lyft are shifting employer costs to the government. Policy experts said it was unusual for such a big pool of workers under the umbrella of multibillion-dollar corporations to tap into that money. But workers for Uber and Lyft qualified for the incentives given that they are classified as independent contractors under the law.
When the pandemic, ride-hailing trips dropped as much as 80% in major cities as many feared the risk of contracting the coronavirus by being outside and riding in strangers’ cars. The aforementioned programs offered grants of up to $10,000, as well as much larger loans, with little scrutiny, making them widely accessible to gig workers.
According to The Post’s analysis, more than 5,000 Uber and Lyft drivers who received the EIDL loans each collected an average of around $15,000. Drivers who turned to the EIDL advance, which was a much larger pool that included at least 18,000 who specifically work for Uber or Lyft, received around $1,100 on average. However, the median figures for both programs reportedly skewed lower as more drivers collected amounts on the lower ends of the distribution.
The data cited was released by the SBA after The Post and 10 other news organizations filed a federal lawsuit under the Freedom of Information Act. As The Post wrote, “[the data] reflects how a new economic class of workers was left to rely on the social safety net at the same time Big Tech added billions in value and fought regulation that would require gig firms to contribute more to social programs.”
The loans occurred simultaneously as Uber and Lyft, together with Instacart and DoorCash, collectively spent $202 million on a successful campaign to pass California’s Prop. 22 last year. The ballot measure allowed them to be exempted of AB5, which required them to classify their drivers and food delivery workers as employees rather than independent contractors.
Uber representatives had said they provided $29 million in assistance to 100,000 drivers who either fell sick due to COVID-19 or have preexisting conditions that would have put them at risk for serious illness. Lyft spokeswoman Julie Wood simply pointed to arguments that drivers prefer the independent contract model that enabled them to qualify for government assistance. “The vast majority of people who drive for Lyft do so part-time to earn extra money and have other jobs,” she reportedly said. “Like so many Americans, they deserve relief from the government to help with the broad economic impacts of the pandemic.”