State and local regulatory battles continue to plague sharing economy companies like Uber and Airbnb. However, their business models faced an existential—though underappreciated—threat from President Obama’s Department of Labor. In a positive step for independent workers and the consumers that they serve, U.S. Secretary of Labor Alexander Acosta rescinded the problematic Obama-era regulatory guidance on independent contractor status this month . Sharing-economy users and workers should celebrate this long-overdue change.
The problems started in summer 2015 when the then Labor Department’s Wage and Hour Commissioner David Weil issued an administrator’s interpretation that, if taken seriously by courts, would have made it more difficult for workers to be independent contractors. This so-called “guidance” could be more accurately deemed “lawmaking through blog post” because did not have to go before the public for comment and it was never voted on by Congress—even though it could have destroyed the work arrangements that have driven the sharing economy’s growth.