The Black Car Fund There's lots of talk about the problems of the gig economy. On today's show, we talk about a solution.
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The Black Car Fund

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The Black Car Fund

The Black Car Fund

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I'm Stacey Vanek Smith, and this is THE INDICATOR, Planet Money's quick take on the news. If you have a full-time job and you get hurt at work, you are covered by workers' compensation insurance. You can get medical care, and you can get paid some of your salary while you recover from your injury.

But if you're a contractor, if you're a freelancer working in the gig economy, and you get hurt on the job, you are out of luck. Workers' comp doesn't apply to you. A lot of the societal safety net in this country works this way. It is built around full-time employees. But more and more people are working not as full-time employees but as contractors. In fact, NPR just commissioned this survey that found that 1 in 5 American workers are now contractors.


VANEK SMITH: This is a problem people are talking about a lot. Today on the show, we talk about a solution.


VANEK SMITH: In New York City, there are, of course, a lot of taxicabs, but there are also car services. And even before the era of Uber and Lyft, if you lived somewhere where there weren't taxicabs driving by, you could call a car service, and five minutes later, a guy driving a black Lincoln Town Car would show up and take you where you wanted to go. These drivers were typically contract workers. They were in the gig economy before the gig economy was a thing. And about 20 years ago, the state of New York created a fund to provide a sort of basic safety net for those workers. It was called the Black Car Fund.

Over time, the fund's gotten bigger and bigger, covered more and more drivers. Uber and Lyft drivers are covered too. And now in the state of New York, about 125,000 drivers are covered by the Black Car Fund. That's today's indicator - 125,000. And now people all over the country are looking at the Black Car Fund as a possible model for all kinds of contract workers. Yuki Noguchi is a correspondent on NPR's business desk, and she's been doing some reporting on this fund, so I called her up to talk about it. And to start, I asked her, just how does this fund work?

YUKI NOGUCHI, BYLINE: What it is is essentially a 2.5 percent surcharge on any kind of ride that you might take - so any ride-hailing service or taxis or limousines. And it was set up to be a workers' compensation fund for drivers that are all contractors, essentially.

VANEK SMITH: So whenever I have taken a car in New York, I have paid this fee.

NOGUCHI: You have paid this fee, and that fee gets collected by, let's say, Uber or Lyft or whichever service you happen to use. They collect it, and then they submit it to the Black Car Fund, yes.

VANEK SMITH: What exactly does this cover?

NOGUCHI: If you're injured on the job, it covers your medical bills - things like physical therapy, potentially. And it covers about two-thirds of the worker's salary during the time the - the worker's pay - they're not salaried - but, you know, the - what a worker might have made during the time that they're injured and not able to work. And it's interesting because I'd rode with one driver who was a beneficiary of this program. His name was Houchang Golzari. He goes by Howard.


HOUCHANG GOLZARI: OK, we're going to go to 31 Street (ph).

NOGUCHI: That's right. That's right.

GOLZARI: And the meanwhile, you would like to...

NOGUCHI: Interview you.

GOLZARI: ...Interview me. OK. Yeah.

NOGUCHI: Is that OK?


NOGUCHI: I don't want you to get into an accident or anything, but...

GOLZARI: No, no, no. That's pretty OK.

NOGUCHI: Mr. Golzari had been in an accident in February of last year, and he hurt his back, and he hurt his neck, and he had to take some physical therapy. And, you know, these are all costs that have probably run in the thousands of dollars. In addition, because the person who hit him was uninsured, he didn't get any sort of other insurance coverage from the other driver who was at fault.

GOLZARI: They got all the bills from the doctors and work and PT, which I had to go. And they said, OK, we are going to look at it, and we are going to reimburse you for loss of time and also any other thing, which - they supposed to give it to me.

NOGUCHI: For him, it was an essential amount of money because it will cover his medical expenses and because it'll pay for some of the time that he wasn't able to drive. He'll also be able to cover the costs of repairing his car. You know, so I think it's been - you know, he talks - he talked about it like it's something that everyone should have; every contractor, every freelancer should have access to this all over the country. That was his view of it.

VANEK SMITH: Right. I mean, I think what's so interesting about this is that we've been hearing a lot about the gig economy and how problematic it can be for people who are trying to make a living because, you know, benefits have traditionally been tied to your employer.

NOGUCHI: Full-time employment.

VANEK SMITH: Right. And so, I mean, how does this kind of a model work? I mean, is this something that could go - could apply to other industries?

NOGUCHI: Well, that's the idea. I mean, as you point out, I mean, the Black Car Fund really has to do with this one industry, this one profession. And in fact, gig workers, you know, have many different jobs with many different employees - employers - we know - which is fairly common. And so then the question becomes, how do you collect? How do you apply this model to other industries across many jobs? And there are states that are really interested in doing just that.

So New Jersey and Washington state - those legislatures have introduced bills that kind of use a similar model but would apply to all freelancers, you know, across a bunch of different industries. And I think that's still unproven. I mean, how you actually administer that is, I think, an open question and one that, you know, states are starting to sort of grapple with - how can we do this?

VANEK SMITH: Yuki Noguchi is a correspondent on NPR's business desk. Thank you so much.



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