‘Portable benefits’ for gig workers deserve study, support
Millions of American workers are surviving, or supplementing their income, in the gig economy. But this means forgoing the benefits attached to full-time employment.
To address this reality, some states, including Pennsylvania, have been exploring the idea of portable benefits — specifically employer-funded savings accounts that follow workers, not their jobs. This is a valuable first step to explore alternative ways to protect workers.
Pennsylvania’s first portable benefits model has been a six-month pilot program in association with the delivery company DoorDash, which will come to an end next month. The company is matching 4% of participating delivery workers’ pre-tip earnings, putting the savings into a benefits account that can be used for retirement, paid time off, or health, dental or vision insurance. Drivers can also add money to the account themselves.
The initial results of the program, which involved 4,400 drivers, look promising, at least according to the company — and its main cheerleader, Gov. Josh Shapiro. If successful, state legislation could ensure these benefits reach all gig workers — including freelancers, temp workers and domestic laborers.
DoorDash is aware that many of its drivers utilize the app as an occasional financial crutch, with the majority delivering for less than four hours a week and many holding other jobs. As a result, the bar to qualify for the program was earning $1,000 (pre-tip) over several months.
But the most important aspect of the savings account is its flexibility. DoorDash drivers can still add to their savings while doing other gig work, like fulfilling Grubhub or Deliveroo orders, or while driving for Uber or pet-sitting for Rover. And they can take the account with them if they cut ties with DoorDash entirely.
It’s a small start: The 4% match only applies to base delivery earnings, not tips — ultimately making up a small fraction of what drivers actually bring home. Advocates have derided the effort as offering merely “pennies” to workers, reports the Philadelphia Inquirer.
But that’s the nature of a pilot program: If it proves too small to be worthwhile, the company and the state can consider more generous plans, or abandon the idea altogether. Final reports on the pilot will likely be released in September.
This shouldn’t distract politicians considering broader measures to protect gig workers. Just this month, Massachusetts implemented a wage floor of over $30 an hour for Uber and Lyft drivers. Pennsylvania should monitor closely consequences of this change — its impact on quality of life for drivers as well as the cost to consumers — and consider following suit if the evidence suggests it.
In the meantime, the Pennsylvania savings account pilot program is an example of modest experimentation — the states are, after all, said to be the “laboratories of democracy” — that could ultimately make a big difference for gig workers here and everywhere. Kudos to DoorDash and to Shapiro for making it happen.
