The nature of work has significantly evolved in recent decades, yet the way that laws governing how people make ends meet has remained largely unchanged. The trade-offs between flexibility — the freedom to decide where and when someone chooses to work — and benefits that have historically come with employment remain stark, despite this shifting landscape. Thankfully, a promising new approach is emerging in Pennsylvania and states across the country. Policymakers at all levels of government should take notice.
Perhaps the most prominent example worthy of consideration is app-based workers, like those making deliveries for DoorDash. These workers are considered independent contractors under existing laws, often spending relatively little time on these platforms and using it mainly for supplemental income. But for those who do more full-time work on these platforms, they may lack these important benefits. Unfortunately, rigid employment classification prevents workers from being able to receive them without sacrificing their independence. Even as policymakers have worked to close these gaps in recent years, a solution has remained out of reach.
This might finally be changing, thanks to an innovative program that DoorDash launched for workers in Pennsylvania last year. Under this program, DoorDash offered “portable benefits” that are additional deposits on top of participating Dashers’ earnings, allowing them to be put towards benefits like retirement, health insurance, or paid time off.
In a new report, we found that Pennsylvania’s pilot is providing a viable solution for these workers who want to maintain their freedom and flexibility. It’s a proof of concept that policymakers can use to inform their own proposals to better support independent workers.
One of the biggest wins from DoorDash’s pilot program in Pennsylvania was giving more app-based workers access to interest-bearing savings accounts. Before the program, more than 60 percent of participants didn’t have a savings account — and some didn’t have any bank account at all. Through the pilot, participants had contributions deposited into an interest-bearing account that helps build financial stability and reinforce long-term financial habits.
The program showed that even modest contributions can add up to meaningful savings, especially for the most active Dashers. The top 10 percent of participants in the Pennsylvania pilot received over $580 in deposits towards their account — roughly enough to cover an annual dental plan for someone who may not have access to coverage.
For these participants, this is a significant change in their lives, and it shows in how they are feeling about their financial future. Two-thirds of Dashers who lacked access to benefits gained new access through the pilot. Among those without prior access, nearly 90 percent said the program made them feel more financially secure, and 97 percent would feel even more secure if the program became permanent.
What we’re seeing in Pennsylvania could soon become a model across the United States. A DoorDash poll found that nearly 90 percent of Dashers nationwide say they want to remain independent — and the Pennsylvania data bear this out. Even though those in the pilot program are more active than the average Dasher — and therefore more likely to lack benefits that could come with employment — the vast majority said that they still prefer to remain independent contractors. This speaks volumes to the value Dashers place on this flexibility.
At its very best, government at all levels can work alongside stakeholders from the private sector to find innovative solutions for the challenges we face. In this regard, DoorDash’s portable benefits pilot is a major step forward, demonstrating how workers can receive benefits and still maintain the freedom and independence that comes with app-based work.
Policymakers – not just in Pennsylvania, but across the country – should look to this pilot for inspiration. And for new laws and regulations to truly serve workers, this portable benefits program provides a valuable framework that should be embraced.
