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U.S. gig workers seeking coronavirus jobless benefits hit bureaucratic wall

By Tina Bellon

By Tina Bellon

(Reuters) - Uber and Lyft drivers are hitting a wall in their efforts to apply for the coronavirus jobless benefits promised by Congress as state agencies say they are not ready to handle a class of workers who are totally new to the U.S. unemployment system.

Gig workers classified as independent contractors by platforms such as Uber Technologies Inc, Lyft Inc, Doordash or Instacart were included in the federal government's coronavirus stimulus bill to receive unemployment benefits generally reserved for full-time employees.

But a week after the bill was signed into law by President Donald Trump, it is still unclear what documentation gig workers, who do not receive wage and tax forms, need to submit to prove their income. This at a time when Uber and Lyft drivers are suffering from a near-total collapse in ride-hailing demand as large parts of the United States shut down to combat the spread of the highly infectious virus.

Gail Nappier, a 63-year-old Lyft driver from Boston, said her income has dropped to around $20 per day, from roughly $180 before the crisis, with only one or two rides per day. She has to worry about her own safety, too.

"I feel like going out and driving is a dangerous game of roulette," Nappier said. "But there really is no other option right now."

Nappier is now waiting for Massachusetts to accept gig workers' unemployment claims.

Drivers voiced frustration over an intransparent and confusing process, saying they spend hours on the phone with state unemployment offices, hoping to find someone to explain their options.

More than a dozen U.S. states contacted by Reuters said they could not provide answers until federal guidelines were published.

State agencies are being overwhelmed by applications for unemployment pay, with a record number of 10 million Americans filing for assistance in the past two weeks.

Several states said that it would take them weeks to process claims even after the federal government provides more clarity. The U.S. Department of Labor did not respond to a request for comment but senior officials on Wednesday said the agency would likely publish unemployment guidelines next week.

The situation highlights the lack of a safety net for people who work for gig economy platforms such as Uber and Lyft. These companies never offered benefits including sick pay, unemployment and workers compensation.

Uber Chief Executive Officer Dara Khosrowshahi had urged Trump to include contract workers for unemployment benefits in the historic $2.3 trillion package.

Uber on Wednesday said it has been talking to the Labor Department and will work with states as they establish unemployment application procedures.

"We are committed to helping drivers with any info they need to secure this support," the company said in a statement.

Lyft said it was working to make it easy for its drivers to get the information they need to receive benefits, including through conference calls, text messages and blog posts. Lyft said it would continue to provide information as it becomes available from the government.

The federal coronavirus program offers up to 39 weeks of unemployment benefits calculated on the basis of the most recent tax return, with payout levels varying state to state. Workers receive an additional $600 per week for up to four months.

Uber and Lyft for years rejected requests by states to provide wage information that would allow them to determine benefits, according to legal experts and state officials in California, which has passed a law to limit the use of contractors and which is where the two companies are based.

The companies have argued that the majority of drivers did not want to be traditional employees, cherishing the flexibility that came with on-demand work, and the companies themselves never paid into unemployment insurance funds.

Some legal experts said Uber's current involvement has strengthened arguments in court cases that it is indeed an employer, however.

"That Uber and Lyft are now asking all of us (taxpayers) to pay for what they should have been doing all along is an absolute farce," said Ronald Zambrano, a California lawyer who represents drivers in lawsuits against the companies.

(Reporting by Tina Bellon in New York; Editing by Sonya Hepinstall)