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Uber CEO calls for 'benefits funds' for gig workers

Dara Khosrowshahi says drivers want both flexibility and benefits.

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- 01:38
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Uber may back out of merger talks with Grubhub due to antitrust concern, reports say.

Angela Lang/CNET

Uber CEO Dara Khosrowshahi on Monday said its drivers should get the "best of both worlds" -- benefits and work flexibility. In an op-ed published in The New York Times, Khosrowshahi proposed that lawmakers require gig economy companies to create "benefits funds" that would "give workers cash that they can use for the benefits they want, like health insurance or paid time off." 

"Our current employment system is outdated and unfair. It forces every worker to choose between being an employee with more benefits but less flexibility, or an independent contractor with more flexibility but almost no safety net," wrote Khosrowshahi. "It's time to move beyond this false choice." 

The op-ed comes as Uber and rival ride-hailing company Lyft face a possible injunction in California that would force them to reclassify their drivers as employees. Currently, drivers are classified as independent contractors, which means they pay for their own expenses, such as gas, car maintenance and insurance. Drivers also don't have benefits like health insurance and sick leave. 

In a lawsuit brought against the companies in May, California Attorney General Xavier Becerra alleged that Uber and Lyft have "exploited hundreds of thousands of California workers" by classifying their drivers as independent contractors rather than employees -- thus violating California law AB 5.  

Uber also laid out its proposal in a blog post and document aimed at policy makers and other gig economy companies. In addition to creating benefits funds, Khosrowshahi said lawmakers should require gig companies to provide medical coverage for injuries that happen on the job. The Uber CEO said the company will also take some steps on its own, including being more transparent about the money that drivers can earn and surveying all its drivers about "what's working and what's not."