Uber Mulls Making Social Security Contributions in Mexico
(Bloomberg) -- Uber Technologies Inc. is in talks with the Mexican government on ways to contribute to the social security system on behalf of its contractors without designating them as full employees.
“These conversations should be grounded in trying to preserve the flexibility of independent work, while also recognizing that this type of work needs to get better,” said Andrew Macdonald, Uber’s senior vice president for mobility.
The comments came after Labor Minister Luisa Maria Alcalde said Mexico is evaluating how to regulate worker conditions in the fast-growing gig economy. The country is working with the Social Security Institute and Mexico City authorities on a plan, she said Aug. 19.
Gig economy drivers, messengers and the like typically are deployed through their smartphone and considered contractors by the app companies, not entitled to all the benefits and protections available to full-time employees. Companies say the arrangement means workers can be their own bosses and take jobs at their own convenience.
“The discussion we want to have with the government is, what benefits can we have? How can we help support the social security system while also preserving a model that works for earners and customers?” Macdonald said in an interview Monday.
The company is considering various ways to do that, he said, such as through contributions to social security for each worker or per trip. “There’s a lot of ways to make this work,” he said.
App contractors worldwide have pushed for more protections, leading Uber in the U.K. to recognize drivers as workers, an intermediate category entitling them to a minimum wage and a limited number of other benefits. In Spain, the Labor Ministry pledged to give gig workers access to the social security system.
In the U.S., a California state judge on Aug. 20 struck down a voter-approved measure bankrolled by Uber, Lyft Inc. and others that declared drivers were independent contractors. Uber vowed to appeal. The companies are also part of a coalition seeking similar measures in Massachusetts. In New York, a bill that would have offered workers union representation was scrapped in June.
Uber also wants to expand its business in Mexico’s southeast, Macdonald said. It recently launched Uber Taxi in the state of Oaxaca and plans to start operations soon in neighboring Chiapas.
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