Lyft is rolling out a groundbreaking initiative designed to support its drivers in Utah. Beginning January 1, Lyft will contribute 7% of eligible drivers’ quarterly earnings into dedicated savings accounts to help them cover benefits or paid time off.
This “first-of-its-kind” pilot program is being facilitated in partnership with portable benefits provider Stride.
Balancing Gig Work and Benefits
The debate over gig worker classifications has long created a divide between flexibility and access to benefits. Lyft’s executive vice president of driver experience, Jeremy Bird, explains the company’s motivation behind this new initiative.
“We’ve been fighting against the status quo for a long time. The dichotomy between you have to be an employee or an independent contractor,” Bird states.
“If you’re an independent contractor, you can’t have benefits. If you’re an employee, you can’t have the kind of flexibility as a contractor. We think that that shouldn’t be the reality in the future. And so, hopefully, this helps prove that you can do both.”
A New Opportunity in Utah
Lyft chose Utah for this pilot after Governor Spencer Cox signed SB-233 into law in March 2023. The law allows companies that employ gig workers to contribute to flexible benefits programs, without requiring these workers to be classified as employees.
The bill itself takes a neutral stance on the employment status of gig workers. It aims to give companies the option to provide financial access to workers as debates over classification continue to unfold at state and federal levels.
Interestingly, Stride notes that gig work is becoming increasingly common in Utah, with 36% of the state’s residents using app-based platforms as a source of income.
How the Program Works
To qualify, Lyft drivers must meet the following criteria:
- Attain “Elite” status in Lyft Rewards for the full quarter.
- Open a Stride Save account.
Once eligible, Lyft will deposit 7% of a driver’s quarterly earnings (excluding tips) into the Stride Save account. These deposits will be made at the end of each quarter for the duration of the one-year pilot program.
Stride CEO Noah Lang emphasizes the program’s flexibility and driver-centric design.
“One of the really nice things is we’re not just making it possible to get contributions, it’s that we’re making it possible to give these drivers total flexibility within a defined set of financial security driven benefits and guide them on how to set these up,” Lang shares.
Supporting Drivers to Boost Platform Engagement
This savings initiative is part of a broader strategy by Lyft to invest in initiatives that appeal to both drivers and riders. By enhancing driver benefits and ensuring quality service, the company aims to increase on-platform participation and loyalty.
Jeremy Bird expresses confidence in this balanced approach, stating, “I’m going in with a lot of optimism and belief that if we show up in this way, then we can really see a financial benefit for the overall platform and also really benefit for drivers and riders.”
Source: Fast Company
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