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Battle Over Rideshare Worker Classification Continues

In April, I wrote about proposed Alabama legislation to exempt rideshare workers from workers compensation protections. Of course, the Alabama Legislature passed the legislation — It protected big companies at the expense of working men and women in our communities.

You can read my prior article at Alabama Legislature Helps Rideshare Services Avoid Providing Workers’ Compensation BenefitsIn recent years, large rideshare companies have lobbied at the state level to avoid providing essential workers’ compensation benefits to workers. The state-by-state battle has seen mixed results. Some states have protected workers while others (such as Alabama) have not. In Alabama, the rideshare companies found an ally in Senator Arthur Orr. Not a surprise. Senator Orr annually sponsors legislation to arbitrarily cut-off medical and disability benefits from our most disabled workers.

Rideshare Companies Can Afford To Care For Their Workers

I know the arguments made by corporate lobbyists and their allies — Benefits are too costly they say. Businesses need help to survive they say. But, it’s not true.

If someone is injured or disabled, there’s a cost. That cost does not go away by allowing the company where the injury occurred escape responsibility. It does not go away by allowing the company to profit off the work with zero accountability. No. Instead, the company is simply shifting the cost to workers and their communities. Families and communities shoulder the cost.

I’m always reminded of the song Fortunate Son about the rich guy who won’t contribute to the common good. When the taxman shows at his house, he makes it “look like a rummage sale” to avoid paying his share. Corporate lobbyists do a good job of convincing people a company can’t pay basic benefits while the company’s top executives are raking in millions. So, what is the profitability of the rideshare companies seeking to avoid protecting their own workers? Let’s take a look. Then, you decide if they should provide basic coverage to the workers who created all the profit.

Clearly, the pandemic saw decreased car traffic. I wrote numerous articles about the traffic decrease in Huntsville and across northern Alabama during the pandemic shutdowns. In Huntsville, schools were closed. Redstone Arsenal sent its workers home to work remotely. So, let’s look at normal, non-pandemic times. Here’s a recent 2022 article in Reuters:

Lyft posts record quarter, sees operating profit of $1 billion in 2024

Hard to believe a company making a billion in profit cannot provide minimal work comp benefits to its injured workers. How about this article from late 2021 on ABC News:

Uber, Lyft making record profits as consumers pay high prices

Now, I’m not some radical trying to stick-it to these companies. I value entrepreneurship. But, I also believe you take care of the people who helped you build the company — Your workers. I think a company making a billion dollars in profit (after paying all its top executives) can afford to invest in its employees rather than more lobbyists.

Unfortunately, the Alabama Legislature chose to turn its back on these workers. If a rideshare worker in Huntsville, Birmingham, Decatur, or elsewhere in our State, suffers a work-related injury or disability, the rideshare company wants to shift all costs to the local community. That’s wrong. We will pay the costs.

A Proposed Rule At The Federal Level Would Provide Other Protections (Separate From Alabama Workers Compensation)

The last few weeks have seen lots of debate about a proposed rule at the Federal level for gig workers, like rideshare drivers. Lobbyists for companies like Lyft and Uber who were working state-by-state to exempt the companies from workers’ compensation coverage are now turning to a fight at the Federal level.

A recent Wall Street Journal article reads, Biden Rule Would Add More Gig Workers To Company PayrollsAnother article in Time claims, A Federal Proposal Could Turn Gig Workers Into EmployeesThe proposed Federal rule is interesting and I expect the debate will be extensive.

When discussing the Federal proposal, one legal commentator exclaimed, “Don’t hold your breath.” In other words, the likelihood of a new rule is slim. Why? These companies will use their lobbyists to fight throughout the entire rule approval process. If a new rule is eventually adopted, these companies will then employ teams of lawyers to fight through the court system. It is likely to be years before the debate ends. The outcome is definitely uncertain.

What does the new Federal proposal mean? That issue is still being debated. It likely means many gig workers would be classified under Federal law as employees rather than independent contractors. That classification would mean protections under various Federal laws such as the Fair Labor Standards Act (FLSA) and laws related to employment discrimination. People who work hard for rideshare companies should be protected from working overtime without pay, from enduring sexual harassment, and from suffering racial discrimination. In addition to a few basic employee protections, the new rule might mean these companies pay their share of taxes.

What does a proposed Federal rule mean at the State level? Probably not much. Workers’ compensation benefits vary from state-to-state. Workers’ compensation benefits are state-specific. Each state (like Alabama) has its own statute. Those statutes identify different classifications for employees, allow different exceptions for some jobs, impose different rules for coverage, state different definitions for accidents, and calculate different benefits for covered injuries. Some states may have laws referencing or looking to Federal definitions for classifying employees. Alabama does not. With our recent legislation, Alabama now also expressly limits coverage for rideshare workers. Alabama law excluding these valuable employees from basic benefits in cases of injury or disability, is a really bad idea.


From our office in Huntsville, we are accident and injury lawyers representing people across Alabama. Our lawyers have appeared in courtrooms statewide. Our goal is to fight for the maximum benefits available for our injured clients. If you have questions about a personal injury issue, let us know. We are happy to answer your questions confidentially and free of charge.