Lyft may have found a better way in its ongoing competition with Uber.
The ride-share company that seems to be the Avis to Uber’s Hertz may have one-upped the competition by becoming the first company in the gig economy to offer its drivers education benefits.
Lyft is being hailed as the first company in the gig economy to offer its drivers an education benefit through its partnership with startup Guild Education. Guild is trailblazing a new business model that provides workers online access to education courses to obtain a GED, take course to learn English or work towards a college degree. Other companies using Guild are Chipotle, Taco Bell, and Discover.
Through the program, Lyft’s drivers will have access to a free education mentor and can access online classes from a variety of universities and schools at a discount.
Lyft asserts that its attorneys made sure that offering driver’s education benefits would not jeopardize their ability to classify them as independent contractors.
In announcing the new program on Lyft’s blog, Lyft co-founder and president John Zimmer said, “We know that many Lyft drivers are working to achieve personal or professional goals, which often include continued education and learning. We’re happy to offer this resource to help drivers succeed both on and off the platform.”
Another reason behind the move is retention. By offering the educational benefits, Lyft hopes to develop a greater connection with its drivers, many of whom also operate with Uber. Gabe Cohen, general manager for Lyft in Denver, told NPR that Lyft’s internal surveys showed that drivers wanted to earn degrees. “It is important that drivers feel loyalty to Lyft,” Cohen told NPR.
While it’s a feel-good story, Lyft’s offer of education doesn’t resolve the ongoing legal issues surrounding driver classifications. Both Uber and Lyft have been able to settle legal challenges to their classification of drivers as independent contractors. Outside of the U.S., Uber has had less success. Lyft may find out soon as it recently announced its expansion into Canada, its first foray outside of the U.S.
In the meantime, GrubHub, a leading online and mobile food ordering company, awaits a ruling in its worker misclassification trial in federal court in the Northern District of California. It’s the first such case to go to trial over whether drivers in the gig economy should be considered workers or independent contractors.