US Labor Secretary Marty Walsh on the future of gig economy workers

·Anchor, Editor-at-Large
·3 min read

U.S. Labor Secretary Marty Walsh is clarifying his comments on gig economy workers.

In an interview last week with Reuters, Walsh said gig economy workers should be classified as employees. The comments quickly sent shares of gig-worker users Lyft and Uber down 10% and 6%, respectively, by the close of last Thursday's session. 

"I don't want to say I was misquoted in that article, but what I said in that article was taken a little far," Walsh said on Yahoo Finance Live on Friday. 

"What I meant to say is that employees deserve good pay, good benefits, opportunities for health care and unemployment and all the rest. I think we will have many conversations about different economies in our country. Those economies are hurting as well. So when you think about those different industries we are talking about — that I won't mention — but are out there, they are hurting as well. So, when we think about the recovery we have to think about how we come back stronger and how do we make sure we have good strong protections in there for our workers as well as we come out of this pandemic," he added.

FILE - In this Feb. 9, 2021 file photo, a passer-by walks past a sign offering directions to an Uber and Lyft ride pickup location at Logan International Airport, in Boston.  Uber and Lyft have teamed up to create a database of drivers ousted from their ride-hailing services for complaints about sexual assault and other crimes that have raised passenger-safety concerns for years. The clearinghouse unveiled Thursday, March 11,  will initially list drivers expelled by the ride-hailing rivals in the U.S. But it will also be open to other companies that deploy workers to perform services such as delivering groceries or take-out orders from restaurants(AP Photo/Steven Senne, File)
FILE - In this Feb. 9, 2021 file photo, a passer-by walks past a sign offering directions to an Uber and Lyft ride pickup location at Logan International Airport, in Boston. (AP Photo/Steven Senne, File)

Lyft's (LYFT) co-founder and President John Zimmer told Yahoo Finance earlier this week he wasn't surprised by Walsh's comments to Reuters.

"They [the comments] were not super surprising," Zimmer said. "I would say, we don't think the government's comments signal any major change. The drivers have made it clear they don't want to be employees."

Zimmer is referring to Prop 22 passing in California in November 2020. In a major win for gig economy workers, Lyft and Uber were exempt from classifying their drivers as employees.

Adds Zimmer, "I think you'll see various solutions, similar to Prop 22, with potential to bring labor leaders into the fold as well over the coming quarters. So I don't think it really changes much. So it's also a surprise that would be the market reaction [to Walsh's Reuters comments].

Lyft rival Uber (UBER) told analysts on an earnings call this week it will continue to have a dialogue with regulators on the employee issue. 

"I think that when we look at the makeup of the current administration, it's fair to say, that there are individuals who have varying views on these issues. They're not all identical in their outlook, and we think that creates space for some meaningful dialogue," Uber chief legal officer Tony West said. 

"So we think there's space here for a conversation. And we continue to kind of look for those opportunities to talk about opportunities for bolstering independent work with those kinds of benefits and protections," he added.

On Wednesday, the Biden administration blocked a Trump-era rule that made it easier for companies that use gig workers to classify them as independent contractors rather than employees. 

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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