| Hey, it's Josh. The gig economy is facing two major crises at once. The first, and most obvious, is the coronavirus. On Tuesday, Airbnb Inc. said it was cutting a quarter of its staff because of the standstill in recreational travel; the sudden drop in all automobile trips has led Lyft to cut its staff by 17%; and similar dismissals could follow at Uber Technologies Inc. The extent of the wreckage should become clearer when Uber and Lyft report earnings this week. The second reckoning has been looming for much longer. On Tuesday, officials in California sued Uber and Lyft for denying employee benefits to their drivers by classifying them as independent contractors. California's suit, which relies on a law that went into effect this year, is the latest and most significant salvo in a battle that's been ongoing for years. Losing the suit could force the companies to reclassify many of their workers, potentially upending their business models (the companies are currently appealing to voters for a reprieve). And while a court ruling in California would not have a direct impact in other states, the ripple effects could be profound. The pandemic has hardened the resolve of everyone with an opinion about the employment status of gig workers. The industry's critics look at the last two months and see a stark illustration of how the gig economy offloads costs and risk. "Uber and Lyft drivers who contract the coronavirus or lose their job quickly realize what they're missing" in terms of employment benefits, said California Attorney General Xavier Becerra in a statement Tuesday. "But it's not just these workers who lose. American taxpayers end up having to help carry the load that Uber and Lyft don't want to accept." Uber, for its part, has argued for years that there should be a new type of "third way" classification for workers who are not really employees or independent contractors, but a hybrid of the two. In a letter to federal officials in March, Uber Chief Executive Officer Dara Khosrowshahi argued the coronavirus pandemic made it even more urgent to find a resolution that let people maintain flexibility while adding some protections. The "economic challenges ahead of us mean America's workers will need more opportunities to earn additional income, not fewer," he wrote. The stakes are high. Not just for Uber and Lyft, but for workers too. In an atmosphere of mass unemployment, there will be increased need for good jobs and stronger safety nets. And as the economy slowly comes back to life, many people will be tempted to accept even the least attractive working conditions. It was dire economic straits that gave birth to the gig economy in the first place. Uber and Lyft sprang from the 2008 financial crisis—a time when many people were willing to accept that any work was better than none at all. Americans rallied around the concept of a "side hustle," and governments effectively endorsed the practice by declining to get involved in the smartphone-based labor markets taking shape. Now, in even more perilous times, "a very similar political permissiveness could emerge," said Alex Rosenblat, author of the book Uberland. It's possible that sweeping layoffs will again send out-of-work Americans hunting for temporary gig jobs, and that politicians will again acquiesce. However, the pandemic is not an average economic bust. As California's lawsuit looms and social distancing rules persist, gig economy darlings may find that this crisis is much worse than the last. —Joshua Brustein | 
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