In a recent interview, billionaire short-seller Jim Chanos stated that gig economy companies such as Uber will be “harmed, not enhanced” by the Wuhan coronavirus pandemic.
CNBC reports that billionaire short-seller Jim Chanos told CNBC in an interview that he believes that the coronavirus pandemic may have a negative effect on gig economy companies such as Uber and Lyft, taking an opposing view to many analysts who believe that these companies may actually benefit from the pandemic.
“I think the gig economy companies are going to come out of this harmed, not enhanced,” said Chanos, founder of Kynikos Associates. “I know there’s a body of thought that oh, well everybody will just do food delivery and we’ll all take Ubers and no one is going to buy a car again, and I think the flip side of it is that the labor pool issue for the gig economy companies is going to loom very very large coming out of this crisis.”
Chanos said that unemployment benefits being paid to gig economy workers could highlight certain issues with the models of companies such as Uber, Lyft, and GrubHub as these companies classify drivers as independent contractors rather than employees meaning that the companies have avoided paying into unemployment programs as a traditional employer would. This means that the payments are made by taxpayers.
“I think both political parties are going to be looking at that pretty hard coming out of the crisis to enhance corporate responsibility in lots of different ways whether it’s keeping employees as independent contractors, whether its restricting buybacks,” Chanos said.
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