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Spotlighting Portable Benefits

Portable benefits really had a moment last week. First, we released Flex’s first white paper on the subject, The Time is Right to Bring Benefits and Independence Together. Second, we partnered with Semafor to host a roundtable to explore how to support workers who opt to earn income through non-traditional, employment-based means.

More on both shortly because another recent event framed the crux of this issue so well. Earlier this month, Revel—a New York rideshare company—announced it would move to an independent contractor model, after announcing with great fanfare in 2021 that it would hire drivers as W-2 employees.

The kicker? The impetus for this change came from Revel’s employee drivers: the company noted that this shift “came in response to an overwhelming majority of drivers asking for more flexibility” per press reports. Revel’s new model will include “offering drivers more control over where and when they drive, the ability to take breaks when and for how long they want, and for more lucrative bonuses that are easier to achieve.”

This news succinctly captures the tension that Flex has highlighted in our white paper and in our recent testimony before Congress.

That is, our existing laws support a system where benefits are traditionally provided to employees by employers, and those benefits are, to one degree or another, funded by and tied to a specific employer. That does not translate well to workers who choose to work outside of the traditional, full-time employment model.

Independent work, on the other hand, provides flexibility and autonomy beyond what is possible in a traditional employer-employee relationship. As the New York Times noted last year, finding work on app-based platforms “offers something that traditional permanent employment still generally doesn’t: the ability to work when and as much as you want, demand permitting, which is often essential to balance life obligations like school or child or elder care.”

Portable benefits represent the best of both worlds: offering workers benefits historically provided by employers while retaining the flexibility of independent work—flexibility that is simply not possible with traditional jobs. 

Portable benefits can resolve the current tension between benefits and flexible, independent work and address the trade-offs that exist today. The CEO of another carshare service (Alto) that hires drivers as employees and allows riders to call rides using an app, acknowledged these trade-offs last year:

“[O]ne big pushback we get is that we’re more expensive, your product serves a different customer base and that is true… In exchange for that extra cost, what I need is some level of predictability for us, I need to be able to know that people are going to show up for their shift, so that I can count on that and deliver my product to my customer. I’m willing to find ways to create flexibility within some framework, but it can’t be I wake up this morning and I decide that I’m not going to work for Alto today or I want to work tomorrow but I didn’t tell you about that until this afternoon. There just are trade-offs.”

Flex’s new white paper highlights why policy ideas like portable benefits are a key part of the solution set to address these trade-offs. Providing millions with access to benefits while maintaining the flexibility and independence that is not possible with traditional employment is an outcome worth advocating for—and we are proud to highlight the app-based industry’s support for such initiatives and the myriad policy rationales supporting portable benefits.

Our roundtable with Semafor highlighted how independent work is a growing part of the U.S. economy, driven in large part by workers’ preference for flexibility. Just as importantly, the conversation found common ground on how independent work—like that provided by app-based work—can provide opportunities, entrepreneurship, and autonomy, including for underserved communities.

We look forward to continuing the bipartisan discussions on portable benefits in the months to come. Because workers like Revel’s drivers and millions of other independent workers should not have to choose between employment with benefits or flexible work without.

Date: 06/20/2024
Category: Flex Insights