Uber and DoorDash are pressing GOP lawmakers to include independent contractors who drive rideshare vehicles and deliver food in Trump's no-tax-on-tips proposal
Richard Rubin / Wall Street Journal : Bluesky: @kevinkleinpdx . LinkedIn: Max Rettig Bluesky: Kevin Klein / @kevinkleinpdx : This is incredibly stupid policy, but I am torn. This will have the effect of destroying tip culture. Nobody will want to tip “lucky duckies” who don't have to pay income tax like the rest of us rubes. So businesses will be forced to pay them wages. [embedded post] LinkedIn: Max Rettig : Today, I was quoted in the Wall Street Journal about the work we're doing to make sure Dashers benefit from the “No Tax on Tips” policy proposed by the President and under consideration in Congress. …
Context & Ripple Effects
Uber has previously sought a worker category between contractor and employee, while labor groups pushed back on that approach in related coverage. This lobbying effort shifts the policy focus from classification to tax treatment, potentially seeking contractor-specific benefits without changing employment status.
The proposal was later reflected in coverage of a passed no-tax-on-tips policy that covered rideshare drivers, making this push an early example of platforms organizing around the tax treatment of app-based work.
First-order effects
- Uber and DoorDash are asking Republican lawmakers to explicitly extend the proposed tip-tax exclusion to the independent contractors who provide rides and deliveries on their platforms.
- The companies can frame inclusion as a way to raise drivers’ after-tax earnings while preserving the contractor model they have long defended, including Uber’s earlier call for a “third way” worker classification.
Second-order effects
- Explicit eligibility would make tip reporting and the distinction between tips and other forms of platform pay more consequential for drivers, platforms, and tax administration.
- Labor advocates are likely to scrutinize whether a tax preference for contractors substitutes for broader worker protections, echoing earlier opposition to Uber’s proposed new worker category in labor groups’ rejection of the classification plan.
Third-order effects
- If tax policy increasingly targets particular forms of gig income, worker-status debates may expand beyond wages and benefits to include which platform earnings receive preferential treatment.
- The broader effect would depend on implementation: narrowly defined tip rules could preserve existing platform pay structures, while broader treatment could encourage more compensation to be routed through tips.
The trend: Gig platforms are increasingly pursuing policy advantages tailored to independent work rather than seeking a wholesale reclassification of their labor force.