President Barack Obama signed the Affordable Care Act into law in late March of 2010, about three months before Uber launched, and six months before a best-selling business book popularized the concept of the “sharing economy.” Lyft wasn’t yet a glint in its founders’ eyes. Nobody was talking about disrupting grocery stores and laundromats.
But with no fanfare, and no public debate, two of America’s most divisive topics — Obamacare and the sharing economy — have become deeply linked. HealthCare.gov is the de facto HR site for booming app companies like Uber. Some of the legislation’s architects told BuzzFeed News they see it as a foundation of the new sharing economy in which decent lives depend on a functioning individual market for health care. And executives at sharing-economy startups see Obamacare as a central plank of their ability to build huge but also sustainable businesses on the labor of people who aren’t their employees.
And whether you view the handshake between Obamacare and the sharing economy as a much needed transformation to a modern economy, as a stealth taxpayer subsidy to Silicon Valley, or as a the latest corporate scam, its outlines are emerging more clearly every day.
“Obamacare is really coming at the best time, and is making it a lot better for the workers,” said Brooke Moreland, a spokeswoman for the taxi hailing company Gett.
“The growth of the collaborative economy has made Obamacare probably a stronger option,” said Aaron Hall, founder of San Francisco-based boat rental company Boatbound. “It’s a great add-on to the life they’re now empowered to have.”
Whether Obamacare’s tilt toward the sharing economy is a feature, a bug, or a happy accident, the companies driving this trend have noticed. TaskRabbit, for example, created a portal in partnership with FreelancerHealthcare.com that makes it easy for their contractors to navigate affordable health insurance and even offers special discounts and rates. Lyft, on the other hand, has partnered with Freelancers Union — which now works exclusively with Empire BlueCross BlueShield — to help their drivers either access Empire’s health care plans or navigate state health care sites. Indeed, for some other sharing economy firms, HealthCare.gov is standing in as the health care HR site.
“We’re legally prevented from providing our contracted cleaning professionals with health care so instead we provide them resources to help them access their own health care,” a spokesperson for Homejoy, which connects people to home cleaners, said. “Homejoy supports the Affordable Care Act and, for that matter, any law that helps people have a great quality of life and be able to work on their own terms.”
Obamacare, venture capitalist Marc Andreessen — whose firm has invested in Lyft and Homejoy (as well as BuzzFeed) — tweeted Tuesday, is “perhaps the single biggest key enabler for the sharing/gig/1099 economy.”
It came at the right time, certainly, for Victor M., who splits his time between driving for UberTaxi in Chicago and tweeting complaints about Uber’s treatment of drivers. When Victor (who declined to give his last name) began driving last year, he wasn’t making enough to afford private health insurance. This year, Uber’s policies pushed his earnings down a bit — to $1,500 a month, he said. But now, for the first time in his 20 years as a cabbie, Victor has health insurance, free Medicaid coverage under the Affordable Care Act, of which is he an enthusiastic fan: “It’s provided much needed coverage for the working poor,” he told BuzzFeed News.
There aren’t reliable public figures on how many Americans have worked as independent contractors through the years, though by some definitions, the figure is extremely high: A recent study commissioned by the Freelancers Union and Elance-oDesk (and which includes both independent contractors and more traditional “freelancers”) put the present number at 53 million, or 34% of America’s workforce.
Those workers aren’t entitled to the health care that most Americans get through their jobs. People trying to buy health care on their own have long faced either bad options — catastrophic coverage that won’t pay for a doctor’s visit — or unaffordable ones. Both parties have for years proposed an array of solutions — tax-funded single-payer on the left, inexpensive if threadbare private plans on the right. And while Obamacare’s 2010 passage was aimed at solving an existing crisis, it arrived just as a new group of workers was entering that pool: workers for companies like Uber, Lyft, Gett, Homejoy, and Etsy, among others, which rely heavily if not entirely on independent contractors and freelancers.
Freeing Americans to freelance was an original goal of Obamacare, but one that sounded like hippie self-actualization, and a hard political sell. (Nancy Pelosi’s pitch that it would allow Americans to become working artists fell flat.) The technical term for the ill it meant to combat was “job-lock” — the way employer-funded health care could discourage people from starting out on their own, chasing their dreams, or simply doing what they love.
Freeing up workers “is one of the major motivations for health care reform, if not the biggest,” Jonathan Gruber, the MIT economist who helped design the Affordable Care Act and its direct predecessor, Romneycare in Massachusetts, told BuzzFeed News. “This may be the biggest effect of the ACA and no one talks about it. We really have a hard time getting a conversation on it.”
And though there hasn’t been research on the relationship between the Affordable Care Act and the rise of the sharing economy, top economists don’t think a link is far-fetched.
“There may be something to the idea that passing the ACA has facilitated an increase in share economy entrepreneurs,” said Austan Goolsbee, a former top economic adviser in the Obama administration. “When people start as entrepreneurs, they often begin as a sidelight or doing it part-time (because it’s risky and the risk of failure is highest at the beginning). Share-economy services like Uber have made that much easier to do. And one of the biggest impediments to entrepreneurship has been the fear that you couldn’t get health insurance if you did. The ACA has, potentially, lessened that a great deal.”
This is a difficult proposition for many of the progressives who support the Affordable Care Act, but who view the sharing economy — with its frank anti-unionism and ethos of individual over community — with deep suspicion.
“I have a lot of concerns about whether Uber is creating good jobs. But you don’t want access to health insurance to be reason that anybody doesn’t start their own business if they have an idea that they want to pursue,” said Heather Boushey, chief economist at the Washington Center for Equitable Growth, an independent economic think tank supported by the Center for American Progress. “By definition, that’s not good for the kind of economy we want.”
And indeed, sharing-economy companies have hired a former top Obama campaign official, Natalie Foster, as spokeswoman for the trade association, Peers.org, that makes their case.
The Affordable Care Act begins a new examination of the government’s relationship with workers that’s key to the growth of the sharing economy, said Natalie Foster, a former top official on the Obama re-election campaign and past executive director of Peers.org, the trade association for the sharing economy.
“The Affordable Care Act is an important first step toward tapping into the flexibility and freedom of new forms of self-employment income, while also accessing important things like health insurance,” she said.
There is no comprehensive data on sharing-economy workers who use the Affordable Care Act, though drivers and other workers reached on company message boards and social media said it was common. And in their circles — as in other Americans’ — frustrations with the health care system haven’t been overcome by its new affordibility.
One Uber driver, a 47-year-old woman based in Los Angeles who makes an average of $1,000 a month driving for Uber and has a part-time job on the side, in fact complained about the difficulty of getting a doctor’s appointment under Medi-Cal, California’s Medicaid welfare program — and said she thought a flood of sharing-economy workers might be making that worse.
“It’s better than having nothing, I guess,” she told BuzzFeed News. “I don’t know if I’m better off because I’m not able to use it, all these bazillion people are covered under this terrific new act.”
“There’s a greater flood of workers who are reliant upon this,” she said.
(Disclosure: Andreessen Horowitz is an investor in BuzzFeed. Andreessen did not, however, inspire or contribute to this story, whose reporting was largely complete before his tweet kind of scooped us.)
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