In this article

Marty Walsh, testifies on his nomination to be Secretary of Labor before the Senate Committee on Health, Education, Labor and Pensions on February 4, 2021, in Washington, DC.
Graeme Jennings | AFP | Getty Images

Shares of Lyft, Uber and DoorDash dropped sharply Thursday after Secretary of Labor Marty Walsh told Reuters in an interview that gig workers should be classified as company employees.

Uber shares lost more than 6%, while both Lyft and DoorDash dropped more than 10% in mid-day trading.

“We are looking at it but in a lot of cases gig workers should be classified as employees… in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” Walsh told Reuters. He said the department will be reaching out to companies that employ gig workers to make sure the workers have access to consistent wages, sick time and healthcare.

“These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America,” he added, “but we also want to make sure that success trickles down to the worker,” he added.

Walsh’s views could set the tone for how the administration plans to tackle the gig economy. Stark policy changes could upend the core business models of ride-hailing and food delivery apps, making it harder for them to reach consistent profitability. Classifying drivers as contractors allows them to avoid the costly benefits associated with employment, like unemployment insurance.

The companies are already facing a patchwork of state and national regulations on the matter. Last year, Uber and Lyft successfully funded a voter proposition in California that overturned that state’s law classifying gig workers as full-time employees, but lost a similar battle in the U.K.

Subscribe to CNBC on YouTube.

You May Also Like

Microsoft and Sony sign deal to keep Activision’s Call of Duty on PlayStation

In this article MSFT 6758.T-JP Follow your favorite stocksCREATE FREE ACCOUNT Game…

Tax reporting proposal creates a defining moment for the crypto industry

Bitcoin resting on United States dollar banknotes. Nicolas Economou | NurPhoto |…

Microsoft confirms job cuts after calling for growth to slow

Satya Nadella, chairman and chief executive officer of Microsoft Corp., speaks during…
iQOO 13 Price, Key Features Leaked Ahead of October 30 Launch

iQOO 13 Price, Key Features Leaked Ahead of October 30 Launch

iQOO 13 is set to launch in China on October 30. So…