Sen. Mark Warner Wants Washington to Catch Up With the Sharing Economy

The Virginia senator wants to ensure your Uber driver can have access to full employment benefits.

The sharing economy is posing new challenges for lawmakers struggling to figure out how drivers for Uber, people who put rooms on Airbnb, and others could receive benefits like health care, unemployment, and workers' compensation.

In a speech Thursday at the New America Foundation, Sen. Mark Warner said that because many workers in the sharing economy are considered independent contractors rather than employees, many are not eligible for those benefits that other workers would be able to receive.

"Many of those programs which were administered and funded by both contributions from the employer and the employee—this is changing that whole relationship in extraordinarily fundamental ways," Warner said, adding that often workers operate without a safety net when something goes wrong.

"It's fairly stunning to me that this much transformation has already taken place but virtually nobody in Washington is starting to ask the policy questions," Warner said.

The Virginia Democrat listed a series of proposals that he thought could assist workers in the sharing economy, such as creating exchanges for unemployment benefits or workers' compensation in the model of Obamacare.

In the speech and in an interview with USA Today earlier in the week, Warner also suggested creating an "hour bank" that would serve as a third-party trusted entity to track workers' hours to administer benefits, not unlike ones used by trades.

An aide to Warner told National Journal that the senator "is looking at legislative solutions but isn't looking to immediately introduce legislation."

Warner worked in the technology sector before getting involved in politics, and he has been a big beneficiary of tech donors. He's generally considered a centrist, but questions around the contract work are being raised most prominently by progressive favorite Elizabeth Warren.

"I think there is evidence that increasingly employers use independent contractors not in ways that were originally intended," the Democratic senator from Massachusetts said last month at Re/Code's Code Conference.

Richard Reibstein, a lawyer and partner at Pepper Hamilton LLP's labor and employment practice group, told National Journal that in some ways, Obamacare exchanges have already helped contract workers by making health insurance accessible.

"Prior to Obamacare, it was very difficult," Reibstein said. "You didn't have much choice."

But Reibstein"“who represents management at National Labor Relations Board proceedings"“said that benefits such as unemployment insurance and workers' compensation would more likely be decided in state legislatures, since they are largely managed on the state level.

The sharing economy is also getting caught up in court. California has seen two court cases in which Uber and former Lyft drivers sued to be compensated as employees rather than independent contractors, which would make them eligible for benefits. In March, the judges in the two cases ruled that they will go before a jury trial.

In the Lyft case, Judge Vince Chhabria wrote that the jury would be "handed a square peg and asked to choose between two round holes," likely referring to the classification between employers and contractors. Classifying workers in the sharing economy as employees could have wide-ranging consequences, and could change the calculus for Warner and others in Congress looking for a major shift.