As Uber drivers go, Noah Lang fits the basic profile. He’s male, over 30, college-educated, and drives to earn a little extra income. There’s one crucial factor that makes him different, though: His startup has $15 million in funding to help Uber drivers and other gig economy workers find an affordable health plan.
Lang is the 31-year-old cofounder and CEO of Stride Health, a San Francisco-based insurance broker service that makes health care recommendations tailored to specific needs such as gender, medications, income, and preferred doctors. Those who sign up for a plan via Stride’s website or mobile app receive year-round support, including access to customer service reps who will sit on hold for hours with an insurance provider.
Some of the largest gig economy companies, including Uber, Postmates, and TaskRabbit, have partnered with Stride Health. It operates in 39 states, including California, New York, and New Jersey, with plans to roll out nationwide on November 1.
The company is also at the center of a debate surrounding the gig economy: Are workers independent contractors or employees? Critics say Stride Health’s service is a bandage that effectively lets companies like Uber avoid paying for health insurance, while supporters argue that policymakers need to rethink antiquated notions of what modern work looks like.
About 50% of Americans receive coverage through an employer. But Uber drivers, for example, are classified as independent contractors no matter how many hours they work. As a result, they do not receive benefits like health insurance, which are extended to full-time employees.
As billions of dollars in funding flowed to gig economy startups in the last five years, it’s resulted in a series of high-profile lawsuits about how workers should be classified. And that’s brought to light the financial hardships of many gig economy workers.
Some executives want to do more to protect workers, Lang says, and that’s why they’re chosen to partner with Stride Health. But they are also under pressure to protect their bottom line, and avoid a sweeping action that would reclassify workers in a way that sets legal precedent.
“Many people think that Uber doesn’t care about its workers,” said Lang. “But the company has invested heavily in the supply side and that’s an asset they want to protect.”
Back in 2013, Stride marketed itself to adventure junkies looking for an alternative to the federal health insurance exchange Healthcare.gov. That’s because Lang, a blond-haired native Floridian, is an adventure sports fan himself and an avid runner who has participated in 11 marathons. He pitched the idea to cofounder Matt Butner during a hike up Mount Whitney that was so grueling Lang suffered a severe bout of altitude sickness. Butner helped him descend safely, and the pair decided to start a company.
Butner had spent the past decade in the agency world developing personalized advertising and search products for companies like Netflix, Priceline and Mini Cooper. He was a perfect match for Lang, a Stanford University-trained product designer, who’d spent five years at Reputation.com.
Butner and Lang set out to create a Netflix-style recommendation engine to help self-employed Americans find health insurance. It had to be simple and jargon-free, so they set a challenge from the get-go by restricting themselves to using the 10,000 most commonly used words in the English language in describing the plans.
Stride’s team opted to focus its efforts on the fast-demand gig economy in December of 2013. Lang set about interviewing 1,000 Uber drivers and other independent contractors across the country, and traveled to Washington, D.C. to meet with policymakers as a representative of the gig economy.
“I didn’t want to come across as a cheerleader,” said Lang. “I know that we need to raise the bar to support workers.” The strategy seems to be working. In the spring of 2014, just 72 hours after the public launch, Stride secured a partnership with TaskRabbit. Uber came on board in the fall of that year, followed by Postmates three months later.
“These companies don’t want the turnover,” said Bob Kocher, a partner with Venrock, a venture firm that invested in Stride Health. “It’s totally in their interest to make available new tools that benefit their contract workforce.”
An Uber spokesperson said the company decided to partner with Stride because it “makes finding–and using–a health plan that meets each person’s needs and lifestyle even easier.” A TaskRabbit spokesperson said the company opted to market Stride to its workers after evaluating alternatives including Healthcare.gov, Oscar Health, and NerdWallet. “We chose Stride because they had the most thoughtful approach for independent contractors.”
Postmates declined to comment about its partnership with Stride Health.
Lang said the company is continuing its outreach to gig economy companies. He doesn’t see much downside to the strategy, with the possible exception of being embroiled in some bad press. Uber has attracted its fair share of controversy, including a damning report claiming that its senior executive had threatened to hire a team of researchers to dig up dirt on a female journalist.
But others believe it is a risky strategy to take on the gig economy, given all the talk of reclassification. Rick Yang, a partner at VC firm New Enterprise Associates who invested in Stride, said he has evaluated the risks but stands behind Lang’s decision. “If the reclassification does need to happen, is the business sustainable? Or is the risk a small one? These are all things we considered, but we still believe that Stride has a big opportunity.”
It remains to be seen whether Stride’s success with gig economy workers will be enough. “This is an unknown population,” said Lang, who added that data on the size and scope of the gig economy is still limited. But in 2014, his team surveyed its users and found that freelance workers are three times more likely to go without health insurance than the national average.
That kind of statistic is also used by critics to prove why these companies should be doing far more to protect their workers, including paying for their health coverage.
“Gig economy companies are not paying their fair share into that system to help keep it running,” said Ken Jacobs, chair of the UC Berkeley Labor Center. “For other firms, if their employees don’t have health coverage, they pay the free rider penalty. Why isn’t that same standard for the on demand companies?”
Jacobs and other critics also pointed out some flaws with Stride Health’s tool. The company doesn’t include every available health plan and there’s no Spanish-language option. The percentage of Spanish-speaking Uber drivers is not known. Other critics have expressed concerns about the way that Stride makes its money by charging insurers a commission when plans are purchased, as it may introduce some level of bias to the selection process.
Lang says that Stride does offer multilingual phone, email, and chat support, although the site isn’t available in Spanish. He stressed that Stride is currently partnered with 149 insurers, and he said the search engine doesn’t factor in commissions.
According to Lang, Stride Health has an edge over Covered California as the company’s customer service team actively supports users once they’ve purchased a health plan. In future, Stride’s partners will provide income data for gig economy workers.
“This will help us determine what kind of [government] subsidy our users should get,” said Lang. “We will track this data over time to mitigate the risk of a surprise tax bill.”
This summer, Uber appealed the California Labor Commission’s decision that a driver should have been treated as an employee, which would require Uber to pay her expenses. In response, Lang wrote a manifesto “for the modern worker class,” published on LinkedIn. Rather than advocating for the status quo, he argued that policymakers should consider an entirely new classification for gig economy workers.
Lang sees the pros in driving for Uber, particularly the flexibility it affords, but is also painfully aware that many drivers lack a social safety net. Even if an independent contractor is insured, a low-quality health plan can land her in a precarious position.
Senator Mark Warner (D-VA), one of the most outspoken policymakers on the topic, recently traveled to San Francisco for a forum that Stride Health hosted. Lang declined to provide specifics on the guest list or agenda, but said “the leader of every major sharing economy vertical” was in attendance.
Lang and Warner have both suggested a potential third-category for workers: “dependent contractors.” In Canada, dependent contractors receive some protections, but they have more flexibility than employees. In an interview, Senator Warner said these forward-thinking approaches would go a long way to protecting workers without crippling innovation.
“We need to ask ourselves, what’s the social contract for the 21st century?”
Update: An earlier version of this story incorrectly put Stride’s funding at $30 million, it is $15 million.