Uber, Lyft Shares Fall on Possible Changes to How Gig Workers Are Classified

Uber Technologies Inc. and Lyft Inc. tumbled after the Biden administration issued a proposal that could change the way it approaches workers’ employment status, a move that could upend the ride-hailing companies’ business models that rely on millions of gig workers.

The proposal, released Tuesday by the US Labor Department, aims to clarify when restaurant workers, delivery couriers, ride-hailing drivers and other gig workers should be classified as employees, or independent contractors in business for themselves. Categorization as an employee would require that businesses provide benefits and protections such as a minimum wage, paid overtime and contributions to unemployment insurance, which companies say would lead to prohibitive operational costs and reduce the amount of flexibility workers have over their jobs.