By Jacob Lederman, Associate Professor of Sociology, University of Michigan Flint
The next time you call an Uber ride or order food delivery with an app, there’s a good chance that the worker on the other end is relying on public assistance to get by. In 2025, companies such as DoorDash, Lyft and Uber had among the most workers of any major employers receiving Supplemental Nutrition Assistance Program benefits, according to a Government Accountability Office report, a sharp jump from an earlier GAO survey.
That finding may appear surprising to most Americans, who usually see platform-based work as a side hustle rather than a primary livelihood. As a scholar of urban politics, I consider this finding an important part of the broader picture revealed in a survey of more than 1,500 people conducted by my institute as part of the Michigan Metro Area Communities Study.
Roughly 22% of total respondents had engaged in gig work, and about half of those said gig work was a necessary source of income rather than a supplement. At the same time, safety net programs, paid for by taxpayers, are filling the gap when platform companies don’t provide adequate pay or benefits.
Flexibility as a double-edged sword
Major gig-work platforms, including Uber and Lyft, often describe their jobs as an opportunity for workers to earn income on their own schedule. In this respect, they’re right. In our survey, 9 in 10 workers said they valued the flexibility, and many said it was the primary reason they took on gig work in the first place.
But gig workers also named pressing concerns, especially about transparency, pay and benefits. The issue, then, isn’t whether workers want flexibility, but whether flexibility allows them to get by. In fact, gig work may be supplemental, but it isn’t always optional. With nearly half of all Americans reporting they struggle to make ends meet, gig income has become a necessity for many households, not a luxury.
At the same time, these platforms aren’t substituting for traditional employment. We found that relatively few workers had left full-time jobs in favor of gig work alone. And when gig work becomes a necessary source of income, the lack of benefits, from health insurance to paid leave, leaves workers exposed. In other words, taxpayers are helping foot the bill to compensate gig workers for what platforms don’t provide.
Medicaid enrollment surge
The Government Accountability Office report also showed that gig platforms are collectively now among the largest sources of workers on Medicaid. What’s more, recent changes to Medicaid are likely to exacerbate conditions for gig workers. President Trump’s sweeping tax and immigration bill included new and tougher Medicaid work requirements. Gig work counts toward the requirement, but gig workers who work for multiple platforms may have trouble documenting their hours, since they lack a traditional employer contact or supervisor who could verify their work status.
As is the case for Medicaid recipients more generally, the complexity and paperwork of the new work requirement may knock eligible people off the rolls. This loss of coverage may also lead to even more dire consequences, such as increased hospitalizations, that can result when uninsured people delay care.
Is portability the answer?
In some states, lawmakers are starting to address the growing trend of gig platforms using government benefits to outsource labor costs. Under this model, platform companies or users of gig apps contribute to worker-owned benefit accounts that travel with workers between jobs and platforms.
Two states already provide some important lessons from existing models. In New York state, the Black Car Fund, initially established for taxi and limo drivers, has covered gig drivers since a $328 million settlement with Uber and Lyft. Enrollment in that program is automatic for all gig workers and taxi drivers, with benefits paid for through small per-ride surcharges. This model has effectively shifted some of the burdens of lower-wage gig work from taxpayers to users of the platforms, allowing it to offer more comprehensive benefits. Platform companies don’t contribute money at present, but if they did, they could make these benefits even more robust.
A different approach in California
As a contrasting example, California shows how much policy design matters. The state opted to work with tech companies when it crafted Proposition 22, which sought to provide delivery and rideshare drivers with a healthcare stipend while keeping them classified as independent contractors rather than employees.
The California model also has more barriers toward getting benefits. For example, tech companies only provide the stipend to drivers who log a minimum number of hours on the platform. One study found that only 10% of California drivers are receiving the healthcare stipend that the law established. The central role of tech platforms in determining who’s eligible has become a flash point, with unions and worker advocates documenting widespread problems in the program.
While these states have taken different approaches, I believe policymakers should remember that they have real choices about how to structure benefits for a workforce that is only growing more central to the American economy — and more reliant on the public safety net to survive.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
