▶ 0:19:10Okay, before we begin with the hearing, I have a few announcements I'd like to make. Uh, first I'd like to welcome, uh, and he is in a meeting right now, Representative Clay Fuller from the great state of Georgia to our committee. He previously pre- previously served as District Attorney for the Lookout Mountain Judicial Circuit and was appointed by President Trump to serve as a White House Fellow from 2018 to 2019.
▶ 0:19:33I'm excited to hear the insight and perspective he'll contribute to this committee on behalf of his constituents and Main Street in the 14th Congressional District of the great state of Georgia. Next, for all of our members, there will be two committee roundtables in May for your information. The first is on May 4th in, uh, my hometown of Fort Worth, Texas. Uh, Representative Van Duyne and I are excited to host uh, all of you in the great state of Texas for that.
▶ 0:19:58And the second round table is on May 22nd in Baltimore, Maryland home of the Big O as they say. Representative Owchowski and you want a 30 second advertisement on that and ask everybody to come? Thank you Mr. Chairman. Please everyone come. We'll try to replicate the amazing Fort Worth experience in Baltimore. We'd love to have you all. There you go.
▶ 0:20:21Well, we're looking forward to both those and so contact your committee staff for logistics and more information about those round tables as it date gets I now call the Committee on Small Business to order. Without objection the chair is authorized to declaring recess of the committee at any time. I now recognize myself for my opening Welcome to today's hearing independent real opportunity, the gig economy and the future of the entrepreneurship.
▶ 0:20:50The gig economy is broadly defined as an economy in which people earn income by providing on-demand work, services or goods. Regardless of one's views on gig entrepreneurship, the truth is that it's become an increasingly large part of each of our everyday lives especially for younger generations. Today gig entrepreneurship takes as many forms as commonly facilitated through digital platforms like apps and websites.
▶ 0:21:16Of course ride-sharing and delivery are major parts of the ecosystem, but there are so many other industries that are part of the gig economy. Some gig platforms are tailored towards housework, handyman projects, running errands or cleaning. At the same time other platforms cover the professional services such as IT, graphic design and other freelance work. One reason people turn to the gig work is to gain flexibility and control in their work schedules.
▶ 0:21:43Whether they are student, grandmother, or aspiring entrepreneur, they can mold their gig work schedule to match their availability. The gig economy supports American entrepreneurship by providing the flexibility and the income needed to launch small businesses. It also allows entrepreneurs to get started quickly by leveraging a built-in customer base to kickstart their The motivations that lead people to gig work such as flexibility and self-ownership also drive self-employment and entrepreneurship.
▶ 0:22:11And in 2025 as much as 36% of the US workforce or 70 million Americans engaged in a gig or freelance work which generated roughly 1.5 trillion dollars in annual earnings. Which is why it was so surprising that the Biden-Harris administration launched an all-out attack on the gig economy. Under the Biden-Harris administration gig entrepreneurs were threatened with IRS audits if they did not report Venmo or PayPal payments over $600.
▶ 0:22:38And the Biden-Harris development Department of Labor issued rules that issued a regulatory complexity threatening to upend the gig economy altogether. Thankfully, President Trump has reversed this decision and changed the reporting threshold in the Work Families Tax Cuts Act. And President Trump also boosted the gig economy and American workers through no tax on tips.
▶ 0:23:01When small businesses and entrepreneurs have the economy to shape their own work, they are better positioned to learn or to earn, build and succeed on on their terms on their own terms leading to a more resilient American economy. I want to thank our witnesses today for joining us. Look forward to the conversation ahead. And I now recognize the distinguished member and my friend representative Velázquez for her opening remarks. Good morning. Thank you Mr. Chairman and welcome to all the witnesses.
▶ 0:23:30Last week The Wall Street Journal told the story of a small business owner who previously drove with a ride-share app and now runs his own car service. Stories like his show how digital platforms can reduce barriers to entry for entrepreneurship by lowering upfront costs and providing an avenue for connecting with clients.
▶ 0:23:56If it weren't for the difficult business environment this administration has created, this story would have been a great demonstration of how digital platforms help build independent businesses. Joe Biden is not in the White House. Donald Trump is. This is his economy. He owns it.
▶ 0:24:20Unfortunately, his business is now among the many American small businesses that are being hurt by skyrocketing gas prices. The Bureau of Labor Statistic reported a 21% increase in gas prices in March, the largest one-month increase since 1967.
▶ 0:24:43High energy costs caused entirely by the president's illegal war in Iran are the main reason that inflation tripled last month. Now, that car service owner is making about 40% less on each ride to the airport. To make up for the lost income, he took on more trips. To get better gas mileage, he bought a newer car.
▶ 0:25:09He will likely have to increase his He may even have to cut his services for the elderly people he drives to doctor appointments and grocery stores. This damage to a successful entrepreneurial venture did not happen did not have to happen.
▶ 0:25:28As the committee has heard time and again, this administration's bad policies have damaged American small businesses With their income being eaten up by the rapidly increasing cost of living, gig workers and small business owners are cutting back spending on things like restaurant meals along with many other Americans who have reported increased concern over high prices.
▶ 0:25:55In fact, this month American consumer sentiment plummeted to its lowest level level ever since the survey started 74 years ago. The measures the measures sank across all groups regardless of age, income and political party. Consumers tightening their belts increases the financial pressures faced by local businesses especially restaurants.
▶ 0:26:25As we will hear today, restaurants already operate on thin margins. Those margins are even thinner now because the president's unconstitutional tariffs raised the cost of everything from food to takeout containers. Now, the impacts of the president's war in Iran are rippling through our supply chains.
▶ 0:26:48Higher fuel prices raised the cost of transporting all goods including food and the impact is already being felt in the broader economy. That means everyday Americans are paying the price for this administration's reckless decisions whether they get their next meal through an app, at a local restaurant, or from a grocery store.
▶ 0:27:12For restaurant owners and their employees, rising prices mean fewer orders and unsustainable financial institutions. For communities, fewer restaurants mean less of the vibrant public spaces those businesses provide.
▶ 0:27:32And for all of us, it means fewer opportunities to thrive, take risks, create new careers and businesses, and support others in their entrepreneurial ventures. I yield back. The gentle lady yields back. I now will now introduce our witnesses. Our first witness is Ms. Kristen Sharp. Ms.
▶ 0:27:54Sharp is the chief executive officer of Flex Association advancing policies that support a modern flexible Before joining Flex, she was CEO of Jobs for the Future's Education Quality Outcome Standards Board and co-founded Shift the Commission on Work, Workers and Technology, a project that examines the impact of AI on work. Earlier in her career, Ms. Sharp worked on technology innovation and national security policy in the US Senate.
▶ 0:28:22She earned a bachelor's degree in political science from the University of Michigan and master's degree in political science from Duke University. Our next witness is Ms. Lisa Alvarez She is the president and owner of Joyce Flowers of Dallas, a locally owned small business serving customers across the Dallas, Texas area. Her daughter also went to TCU. And Ms.
▶ 0:28:45Alvarez Acevedo along with her mother Gloria bought Joyce Flowers in Today Joyce Flowers of Dallas employs around 10 full-time and part-time staff members and produces high-quality floral arrangements and gifts all while providing friendly, reliable service to their community. Thank you for being here and also you studied at Texas Woman's University. Our next witness is Ms. Elaine Buxton. Ms.
▶ 0:29:12Buxton serves as president and chief executive officer of Confero Inc., a national customer experience research and measurement firm. Ms. Buxton co-founded Confero in 1986. Confero Inc. helps business improve customer service and performance through data-driven insights and analytics. Ms. Buxton serves on the Board of Directors for the Better Business Bureau of East North Carolina and the US Chamber's Small Business Council.
▶ 0:29:38She earned a bachelor's of science degree in business administration from the University of North Carolina at Chapel Hill and a master of business administration from Meredith College. I now recognize the ranking member from New York, Ms. Velázquez, to briefly introduce our last witness appearing before us today. Thank you, Mr. Chairman. Rosa Fernandez is an Atlanta-based entrepreneur, mother, and owner of El Ponce Antojitos, and partner in Bar Anna.
▶ 0:30:06Her career spans over two decades of building community-focused hospitality concepts rooted in culture and connection. A graduate of the James Beard Foundation Women's Entrepreneurial Leadership Program and board member of the Independent Restaurant Coalition, she's a passionate advocate for the hospitality community.
▶ 0:30:28Rosa began her hospitality journey with El Bar, and today that same space is home to Bar Anna, where she is a partner supporting the next generation of entrepreneurs by creating space and opportunity. Rosa's dedication extends beyond her business ventures. She's deeply committed to empowering women and the Latino community and fighting for environmental sustainability and human rights.
▶ 0:30:56Her goals center around building a more sustainable and equitable future for generations to come. Welcome, Ms. Turner. Thank you for being here. Okay, thank you again to all of our witnesses. And before recognizing the I would like to remind them that their oral testimony is restricted to 5 minutes in length. That's an important number around here. Don't It's not six, it's not four, it's five.
▶ 0:31:26And if you see the light turn red in front of you, it means your 5 minutes have concluded, and you should wrap up your testimony. And if you keep going, you'll hear this. That means it's over with, okay? But you'll do fine. I now recognize Ms. Kristen Sharp for her 5-minute opening Uh Chairman Williams, Ranking Member Velázquez, and distinguished members of the committee, thank you for the opportunity to appear here today.
▶ 0:31:54My name is Kristen Sharp, and I'm the CEO of the Flex Association. Flex represents America's leading rideshare and delivery platforms and the people who count on Across dozens of platforms, from mobility to freelance to creative marketplaces, millions of Americans are earning, shopping, and building businesses through technologies that simply didn't exist a generation ago. In 2024, the app-based industry contributed more than $212 billion to the US economy.
▶ 0:32:23For consumers, the platform industry has delivered savings, access, and convenience. For workers, it's a powerful opportunity to be your own boss with real control over your time and money. And for the restaurants and local businesses deliveries come from, it expands markets and reaches new Small businesses are the backbone of the American economy, and app-based platforms have been one of the most powerful tools they have.
▶ 0:32:48The marketplaces connect small businesses to digital customers and help them compete with bigger firms by providing critical support, on-demand workers, logistics, digital payments, targeted marketing tools. And as a result, millions of American businesses have modernized how they operate and found new pathways to scale. Nearly two-thirds of of customers have used an app-based platform for grocery delivery, 60% for package delivery, and the average American now takes rideshare 16 times per year.
▶ 0:33:17These aren't abstract statistics. They represent real customers walking through digital doors of businesses that they might not otherwise have reached. The scale of the app-based industry has provided millions of Americans with an essential lifeline to navigate financial Digital platforms offer immediate, flexible income, no lengthy hiring process, no restrictions on the number of platforms one uses, just a smartphone, an idea, and the ability to start earning immediately.
▶ 0:33:45For parents, students, workers between jobs, this flexibility fills gaps that traditional employment can't. Nearly nine in 10 workers with children say app-based work makes it easier to balance family and work, and 69% say that it's helped them earn money in an emergency. In an unpredictable labor market, on-demand earning provides real-time stability. But here's something that rarely gets mentioned.
▶ 0:34:08App-based work is quietly one of the most powerful engines of entrepreneurship in the American economy It helps workers practice skills like multitasking and evaluating new opportunities. It helps them accrue startup capital to launch an idea or business. And it creates the confidence to take risks by being a ready supply of temporary income while getting a business up and running or riding out a slow period.
▶ 0:34:32That's why a recent study of US tax records found that app-based workers start new companies at more than three times the rate of the general working age population, and why those businesses generate 39% higher gross profits in the first year than those started by the general population.
▶ 0:34:48It's opening doors for people who've historically been locked out of entrepreneurship, younger workers, low-income workers, veterans, and those taking care of children or elderly So when someone drives through Uber or delivers through DoorDash or shops with Instacart, they may not be making ends meet. They may be help They may be the developing the skills that they need to start succeeding in business. So what do we ask of policymakers? Reflect reality. There's encouraging progress on this front.
▶ 0:35:15Last year, Congress passed the No Tax on Tips initiative, ensuring that tipped app-based workers pay lower taxes. The Flex Association also applauds the Department of Labor's decision to propose common-sense, pro-worker classification rules. This rule helps preserve the flexible, independent work model that underpins the app-based economy that millions of Americans rely on today. The modern labor market is defined by constant change. Workers, especially younger ones, get this.
▶ 0:35:44Last year, more than half of millennial and Gen Z Americans earned money outside a primary job, often as a solo entrepreneur with many income streams. So protect that flexibility. Don't shoehorn shoehorn independent workers into conventional employment against their wishes and strip away the flexibility they've chosen.
▶ 0:36:03We support the Small Business Administration's efforts to track and streamline regulatory requirements for independent workers, and we would be pleased to work with the SBA to strengthen education around tax filings, digital business formation, and income growth for solo The nature of work is changing, but it brings so much opportunity. If we want an economy that works for today's small businesses, we should support the systems that people are already relying on to build them. App-based work is a key piece of that puzzle. Thank you, Mr.
▶ 0:36:35Lady Osback, I now recognize Ms. Lisa Alvarez Acevedo for her 5-minute opening Chairman, Ranking Member, and distinguished members of the committee, thank you for the opportunity to testify today. My name is Lisa Alvarez Acevedo, and I'm the owner of Joyce Flowers of Dallas, a Dallas-based company.
▶ 0:37:00When I purchased Joyce Flowers 28 years ago, I had a dream of creating a family business that would allow me to support my family and spend time with them. That dream is now a reality. I can proudly say that Joyce Flowers is a four-generation family business, which started with my mother and I working alongside one another. When my mother retired, my daughter, Alyssa, stepped in to work with me.
▶ 0:37:27Even my grandchildren pitch in and carrying the family legacy forward. I'm proud to say that today Joyce Flowers employs 10 full-time and part-time staff members and remains deeply connected to our local community in Dallas. Starting a business is hard enough.
▶ 0:37:45Between permits, paperwork, and all the costs that come with operating a business, platforms like DoorDash make that path a little easier by giving entrepreneurs tools to reach a broad base of customers. Entrepreneurship gave me the freedom to build something on my own terms, and platforms like DoorDash are making that path more accessible for the next generation of small business owners.
▶ 0:38:14For years, Joyce Flowers relied on traditional wire services to handle but they did not meet our business's real needs. Two years ago, we partnered with DoorDash, and the experience has been remarkable. While [snorts] Joyce Flowers has long been a neighborhood institution, DoorDash is helping the business evolve and grow in meaningful ways. DoorDash helped our small business reach more customers and keep local dollars moving through our community.
▶ 0:38:44Staff no longer have to coordinate deliveries. This eliminates complexity and saves thousands of dollars in Our partnership with DoorDash lets my team focus on what we do best, creating beautiful arrangements and serving our During peak periods like Valentine's Day or Mother's Day, this efficiency is especially valuable.
▶ 0:39:08We can relocate team members in store, customers and and order fulfillment during the rush, rather than trying to trying to have them all deliver and and and work with DoorDash also introduced us to an entirely new customer base. Even after decades in business, people are still discovering Joyce Flowers for the first time through the platform.
▶ 0:39:33In 2025, Joyce Flowers made over 60,000 in sales on the DoorDash marketplace. My experience is not unique. According to the DoorDash According to DoorDash, 88% of merchants say the platform has helped them reach new customers they otherwise would not have been able to access. And US-based merchants collectively made over 40 billion in sales on DoorDash marketplace in 2024.
▶ 0:40:02Dashers themselves have played a role in that growth. Many have told us they discovered our shop and event center through deliveries and later returned as We have built strong relationships with Dashers, welcoming them and even offering treats for their children when they bring them in. Platforms like DoorDash are strengthening mainstream. They give small business like mine the tools to compete, to grow, and to stay rooted in the communities we serve.
▶ 0:40:33Joyce Florist thrives by blending tradition, initiative, and DoorDash is the latest chapter in that I want my grandchildren to inherit a business and an economy where entrepreneurs have every tool to to Small business owners like me already face enough cost and regulatory complexities to keep our doors open.
▶ 0:41:00The tools that help us save time and serve customers better should not be made harder to use. Instead, they should be encouraged. I thank the committee for encouraging policies that allow small business and platform partners to continue working for the benefit of our communities. Thank you for your time. I'm happy to answer any questions. Gentlelady yields back. I now recognize Ms. Elaine Buxton for her 5-minute opening remarks.
▶ 0:41:30Mr. Chairman, ranking member, and members of the committee, thank you so much for the opportunity to tell my story here today. My name is Elaine Buxton and I'm president and CEO of Concentra Ferro, which is a customer experience research company. We're based in Cary, North My company has been in business since 1986 helping clients improve customer experience, compliance, and their own I'm here to share a simple small business perspective.
▶ 0:41:56App-based platforms and digital tools have made it much easier for companies like mine to find the right support, expand when needed, and serve clients without taking on fixed cost before the business is Long [snorts] before people used the phrase gig economy, my company was already coordinating projects across many markets. Back then, that meant telephone, landline, paper forms, mailed reports, and a lot of manual work.
▶ 0:42:24Our projects [snorts] vary by client, location, timing, urgency, and complexity, so that was very hard to Today, digital platforms help us manage that work more efficiently. Over nearly four decades, my company has stayed competitive by adapting to new technology, changing client needs, and new ways of doing research.
▶ 0:42:47These tools also help level the playing field by giving small businesses access to reach and capabilities that used to require a much larger organization. In my company, these platforms serve more than one kind of need. They help us find project-based support in different markets, connect with research participants when appropriate, and access specialized help like graphic design, digital marketing, research editing, data analysis, and fractional finance support.
▶ 0:43:17And for companies like mine, this really matters. If small businesses lose access to lawful, flexible arrangements, we will face higher costs, less agility, less reach, and fewer chances to grow.
▶ 0:43:30In some kinds of research, flexibility is not just about cost. It's about what makes the work even possible. For example, imagine a restaurant chain rolling out a new menu item, and they want to know quickly whether customers in different places are getting it prepared and served the same way all across their units. That may mean a brief one-time visit in many locations.
▶ 0:43:53It would not make sense for a small business to hire employees all over the country for a task that may take only a few minutes and may only happen once. In my experience, these platforms do five practical things for my business. They help us find talent and research participants. They help us move faster when opportunities come up. They help us control costs by bringing in support only when we need it.
▶ 0:44:18They help us compete with larger companies, and they support entrepreneurship more broadly. I also [snorts] want to be clear that flexibility works best when it comes with responsibility. People should know what the opportunity is, what it pays, what is expected, and when it will be paid. Companies using these tools should be transparent and should protect against fraud and abuse.
▶ 0:44:41I support clear, practical rules that small businesses can understand and follow without gray areas, without pages of legal interpretation, and without needing a lawyer just to know what the rules mean. From my perspective as a small business owner, the real question is not whether every person should fit into one single model.
▶ 0:45:00The real question is whether policy will leave room for lawful, flexible arrangements that work for both small businesses and the people who choose to engage with them while still keeping the rules clear and I also want to say how grateful I am to the SBA. I'd like to take a moment to thank you for helping get my uh company through COVID.
▶ 0:45:23Uh as you can imagine, most of our clients have uh customer-facing locations, and as they were closing up, we got a lot of emails saying, "We have to stop doing research. We don't have any customers right now. We have to stop doing research." I lost 80% of my revenue in 10 days, and I can't tell you how helpful it was to have COVID relief, idle loans, PPP, all the things that the SBA helped to usher in uh
▶ 0:45:53to keep us uh going and to encourage us to try to stay in business. And [snorts] now that we have come out of COVID and we are growing again, and our clients are growing again, the SBA enabled a competitive working capital loan for us while we're growing again. So, I just like to to especially thank the SBA for that. For small businesses, app-based platforms are not a luxury. They're practical tools that help us grow, compete, and adapt.
▶ 0:46:22Preserving room for lawful, flexible arrangements while promoting clear rules and responsible practices will help more small businesses succeed. Thank you so Gentlelady yields back. I now recognize Ms. Rosa Thurnher for her 5-minute opening remarks. Thank you. Uh Chairman Williams, ranking member Velázquez, and members of the committee, thank you for the opportunity to testify. My name is Rosa Thurnher.
▶ 0:46:47I own El Ponce Mexican Restaurant in Atlanta, Georgia, and I'm a proud board member of the Independent Restaurant Coalition representing more than 500,000 independent restaurants and bars across the country. Um I'm here to talk about the delivery marketplace as that's what pertains to my business strongly. Um there's three core problems for independent restaurants. Um first, the costs are very high, too high and unpredictable. Second, we have lost control of our customer relationships.
▶ 0:47:14And third, the system is not transparent or competitive, and the data that drives it is not shared with the businesses that depend on it. Uh those three things together are putting independent restaurants in a very fragile position. Restaurants like mine operate on margins of 4 to 6% in the best of times. Today, every major cost is up: food, fuel, labor, rent, insurance, and credit card fees. And on top of that, delivery platform fees can reach as high as 30%. That's not a small pressure. It fundamentally changes whether a restaurant can survive.
▶ 0:47:45So, we are forced into impossible decisions: raise prices and risk losing customers, or absorb the costs and erode our businesses. Across the country, operators are shrinking portions, changing menus, and stretching staff. Not because we want to, but because we're trying to stay open. At the same time, we've lost control over one of the most important parts of our business, our customers. When someone orders through a delivery app, I don't know who they are. I can't contact them if something goes wrong.
▶ 0:48:10I can't invite them back, and I can't build The platform owns that relationship, not the restaurant. In today's economy, data is currency, and that data is being withheld from the very businesses creating the value. Without access to our own customer data, we can't build relationships, make informed decisions, or compete on a level playing field. And then there's visibility. Whether a customer sees my restaurant often depends on whether I'm paying for promotions, offering discounts, or meeting performance metrics that I don't fully control.
▶ 0:48:41When I stopped paying for advertising, my sales dropped. Not because demand disappeared, but because I was no longer being shown to customers. That is not a level playing field. It is a system where access to your own customers is conditional. There are also real operational consequences. Drivers are often working across multiple apps at once, which leads to delays and poor customer experiences. When food arrives late or in poor condition, the customer blames the restaurant, even though we don't control the delivery.
▶ 0:49:07And many of us are dealing with unauthor- unauthorized listings, menu scraping, and misuse of our brands online. These are issues we didn't agree to and cannot easily fix. Meanwhile, this is a rapidly growing market worth tens of billions of dollars, but independent restaurants are not sharing fairly in that growth. Instead, we are absorbing more cost while a small number of platforms gain more control. That is why transparency matters. Recently, the FTC announced it is exploring a potential rulemaking on delivery fee transparency.
▶ 0:49:37From where sit, that is long overdue. Right now, we're navigating complex and constantly shifting fees without clear disclosure disclosure or real leverage. It makes it extremely difficult to plan, to price, or to understand what we're actually The Independent Restaurant Coalition strongly supports this effort and will be submitting comments. Delivery can and should be a part of a healthy restaurant ecosystem, but only if the marketplace is fair, transparent, and competitive.
▶ 0:50:05Independent restaurants are one of the largest employers in the country, but more than that, we are deeply rooted in our communities. When you spend money in an independent restaurant, that money stays local. It supports workers, farmers, and small businesses nearby. That is very different from a system where more and more value is extracted out of communities and consolidated into a handful of large technology platforms. Restaurants are also more than places to eat. We are gathering spaces. We are part of the cultural fabric of our neighborhoods.
▶ 0:50:32And in moments of crisis, whether it's a pandemic, a natural disaster, or a community need, restaurants are often among the first to step up and serve. But those contri- contributions depend on businesses that can actually sustain themselves. Right now, too many cannot. Thank you for having me, and I look forward to your questions. Gentlelady yields back. Now, we move to the member questions under the 5-minute Ms. Sharp.
▶ 0:50:58Uh in this committee, we've had uh time and time again we've heard time and time again about how overly burdensome regulations constrain small businesses. These same regulations created red tape that limits individuals opportunities to earn flexible income, particularly for gig and uh uh uh platform and entrepreneurs.
▶ 0:51:18Uh the Trump administration has prioritized removing these barriers uh in in including charge changes to the independent contractor definition, no better support gig and platform-based entrepreneurs. Further, President Trump's working families tax cut are bringing more money back into Americans' pockets. So, my question uh from your point of view uh how have the policy changes like this directly benefited gig entrepreneurs and the platforms that support them? Thank you, Mr. Chairman.
▶ 0:51:48Uh the changes to the Department of Labor rule is welcome news for independent workers. And Flex supported this common-sense change largely because it streamlined the um complicated and multi-factor test of the previous administration into one that was clear and simple for both businesses and workers to understand. Um there's been quite a bit of research uh independent research about uh the changes that California had uh which were some of the most stringent in the nation about worker classification.
▶ 0:52:18And um the research showed that after California uh required more people to be classified as uh employees, total uh total income for independent workers dropped by 10% without a corresponding increase in in traditional employment. And so, there's very clear evidence that um it hinders the ability to work flexibly in the way that is so crucial and important to this population of workers.
▶ 0:52:47Um we do see through survey data that that independent workers um prefer to be independent contractors by overwhelming margins, somewhere between 77 and 85% at various times, and 90% of app-based workers choose the work specifically because of the flexibility. So, we're very grateful to um the Department of Labor for its new rule and thinking through what will be um what will help workers feel like they are supported and not have the rug pulled out from under them.
▶ 0:53:19Ms. Alvarado Acevedo. Small businesses often face challenges when it comes to hiring, managing managing costs, and scaling up operations. Many of you have touched on that in the gig economy and the use of app-based platforms over an alternative providing flexible demands access to talent. Now, based on your experience, how has using the gig economy through DoorDash helped Joyce Flowers uh adapt to the changing needs of the business?
▶ 0:53:49Well, for us Thank you, Mr. Chairman. For us in particular, it has really helped us. It has really helped grow us. Um it helps us get our deliveries out in a quicker time frame. Um and we also have the opportunity to continue to bring in um a new customer base because we have new people using the app that didn't know us before.
▶ 0:54:13And so, it really is important uh to have our Dashers because they're able to come in, pick up those arrangements, and get them there within the hour. Usually within about 30 minutes, opposed routing those deliveries and getting them out, which takes half a day because we have several going out at the same time. And so, using DoorDash, we're able to get those out immediately. Okay. Thank you. Thank you.
▶ 0:54:38Uh Ms. Buxton, throughout our nation's history, small businesses have grown by adapting to change and finding new ways to compete. And today, the gig economy continues transform how small businesses and entrepreneurs operate as a whole. So, my question is as someone who's who's successfully adapting to this shift, can you uh describe how your business has embraced gig entrepreneurs and the impact that it's had on your operations and your growth? Um yes, thank you. Thank you, Mr.
▶ 0:55:07Chairman, for the Um the gig economy has helped our growth because we are a small business, but we serve large companies. A lot of large companies want to work with small business because we're nimble, we have new ideas, we innovate. But a lot of times, we don't have access to all of the people that are needed. Uh so, we've been able to grow by uh using um various consultants, uh fractional CFO.
▶ 0:55:34Um we can bring on a project manager for a project uh that we only need for a couple of weeks. So now, for example, instead of having to do work for a client all year round, we can do work for them for 2 weeks for a quick in and out type of project, which is really very helpful to our clients, and it's helped us grow our business. We would not have been able to make those investments in uh employees in advance without having the the uh projects coming in.
▶ 0:56:01So, the gig economy has really helped us get access to Thank you, and my time is up, and I now recognize Mr. McGarvey from the great state of Kentucky for 5 minutes. Thank you, Mr. Chairman. Appreciate that. And Ms. Sharp, I'm going to I'm going to start with you. Uh you know, obviously in in my home state of Kentucky, there's a lot of people who use the gig economy and use it to have meaningful employment, careers, opportunities that they enjoy.
▶ 0:56:24Um I was looking at your uh some of your information for your company, and I'm my question is, I'm curious what percentage of the gig workers are full-time? Not necessarily like 40 hours a week for Uber, DoorDash, or whatever app is their their main uh source of income, but what is what is that what does that full-time worker look Yep. Thank you. Uh thank you, Congressman. That's a great question.
▶ 0:56:52We see um through extensive survey data and conversations with workers that about 80% of workers work fewer than 20 hours per week. 65% work fewer than 10 hours per week. The average tends to be between 8 hours per week, and we see it that people are often combining multiple different income streams and using this income to sort of reinvest in other businesses or think about um the developing the entrepreneurial skills that they'll need in other contexts.
▶ 0:57:23Um we often see people who have a traditional full-time job and also are augmenting their income. Yes. That's what I've seen. So, it's about 20%. Uh 20% work more work 20 or more hours per week. Right. Um but even that is not Of that 20%, it isn't all full-time. Yeah. So, we're we're about 20%, and do you know what percentage of those full-time gig workers have health insurance?
▶ 0:57:48Do you keep that kind of information about your yes, to some extent. It's a variable workforce. By definition, this is a workforce that is often transitional and jumping in and out of of doing independent work.
▶ 0:58:02Ballpark figure? Ballpark is a little over 50% um though again, that fluctuates with the with the thing, but we but we often see people who are working in this industry that have spouses that have a traditional job, that also have other sources of income besides their gig income. Um and so, it does it does differ. And that's that's what I'm getting at is right, if you've got about 50% who have health insurance, they they might be on Medicare, they might have a spouse who has health
▶ 0:58:30That's veterans benefits, etc. Yep. Um so, totally understand that. Uh but then, for anybody else, not a veteran, not having a spouse, not having a there's basically only two options. Right? They can go and they can apply for Medicaid, or they can go to the ACA marketplace. And I think this is one of my big fears, especially what we see in my home state of Kentucky right now. In the one big beautiful bill that cut a trillion dollars from Medicaid, largest cut to Medicaid in our country's history, uh the Kentucky Hospital Association has already predicted the impact's going to be massive.
▶ 0:59:0035 rural hospitals are going to close. It's going to impact every community, urban and rural. Uh and it's not just that though, there's kind of there's a double hit here. There's the cut to Medicaid directly, and then there's letting the ACA tax credits expire. I've talked to so many people, and we've been on the phone with people who are in tears telling us their stories. Uh one of the people I talked to, a woman named Ann, uh she and her husband, both independent contractors. All right?
▶ 0:59:27Uh they had the ACA to keep herself and her family, her 19-year-old disabled son, afloat. Um but when I spoke with her, she said that if the ACA expired, that her tax her her premiums are going to go from $350 a month to $1,275.69 per month. I talked to another couple, again in the gig economy, they're paying $625 per month before the tax credits expired. Now those premiums are going to per month.
▶ 0:59:55And this is the kind of thing, if we want to have a gig economy, if we want to let people actually go out and have these sources of work where they can make income, but we are cutting their ability to have medical care and health insurance, then we are making it not we, the President, President Trump is making it harder to get by. And the problem is he doesn't seem to care. Just the other day he said, and this is a quote, "It's not possible for us to take care of daycare, Medicaid, Medicare, and all those individual things at the federal level because, quote, we're fighting wars." That is a choice he is making.
▶ 1:00:24When he comes to us and asks for $500 billion to appear out of thin air, but people don't have healthcare and people don't have childcare, and people don't have the supports they need in their jobs, that is the problem and it's going to affect people in the very gig economy that you're talking about today. Um Ms. Buxton, in the little time I have left, I've seen reports that the hours worked on gig platforms increased in 2025 as the job market cooled off. Have you seen any increase in registrations for work on your platform?
▶ 1:00:53Well, we use multiple We use multiple platforms to find people to do research because it's very specialized. We may need people that have participated that use a particular brand or like to go to a particular store or or any of those sorts of things. So we have to use multiple platforms. We have seen an increase in interest since the pandemic because people went home, worked from home, and they had a lot of flexibility, and now they're searching for that.
▶ 1:01:17And my time is expired. Appreciate that. We didn't get to talk about tariffs, which I know were also impacting all of your drivers. If people can't afford If businesses can't afford food and people can't afford that food, then they're not going to go pick it up. Appreciate it, and you'll back. I now recognize Mr. Alford from Missouri for 5 minutes. Thank you, Madam Chair, and thank you, Chairman Williams and Ranking Member Velázquez. Uh This committee exists to champion Main Street. We say it over and over again. I hope it's going to sink through because this is this is why we're here.
▶ 1:01:47Today we're discussing one of the fastest-growing drivers of entrepreneurship in our economy, the gig It's often misunderstood. It's not just ride-sharing or delivery services. It includes freelancers, online sellers, independent contractors, and small business owners across nearly every spectrum and sector of our economy.
▶ 1:02:08And at its core, the gig economy is about It allows Americans to earn income, build skills, start businesses without the traditional barriers of high startup costs or rigid work schedules. For many, it's a first step towards entrepreneurship, and gig work gives individuals the ability to test ideas, build up customer base, generate income while they develop their own businesses.
▶ 1:02:33And that kind of flexibility is especially important for young entrepreneurs, parents, and those transitioning between careers. I have three grown children, and two of them are heavily involved in the gig economy. They are supporting I might add, which is great as a parent to see them thrive in the gig economy. We're seeing the impact. Millions of Americans are now participating. This is not replacing the traditional workforce. It is transforming it.
▶ 1:03:03It is creating a system by which individuals have more control over their time, their income, their future. And I'm encouraged that policies under the Trump administration have supported this growth by reducing regulatory burdens, by clarifying independent contractor status, and by ensuring that gig workers can keep more of what they But we need to make sure that this momentum continues.
▶ 1:03:29Congress should be focused on preserving flexibility, reducing unnecessary red tape, and making sure that digital platforms remain a pathway to opportunity rather than presenting barriers. At the end of the day, the gig economy is not just how people work. It's about how people build something of their own. Ms.
▶ 1:03:53Buxton, I'm a former realtor, and I'm well aware that many of our friends on the left somehow consider independent contractors, such as realtors, my wife's a realtor, my oldest son's a realtor, but some see that as exploitative, that they want to throw up roadblocks to make everyone a W-2 employee. For one thing, it would be easier to unionize those employees.
▶ 1:04:20Can you talk about any issues that you have had with restrictive laws around independent contractors? My company conducts research all over the US, and so there's the federal law, and then 50 other different labor laws in each state, and they're not consistent with each other.
▶ 1:04:40Um particularly, there's there's one called the ABC test, where uh the B portion of determining if someone is an independent contractor has to do with uh is the contractor providing something that's integral to your business? Well, research is integral to my business, and I need to engage research respondents to be part of the research, but or you know, if they're integral, am I not operating correctly?
▶ 1:05:07I I think what happens is the policies are intended for larger, different kinds of organizations in the gig economy, and not for companies like mine or um I mean I I engaged a pet sitter through Rover to take care of my pet while I'm here. Um I don't think those kinds of rules were were built for smaller-type platforms. I think everything's directed at the larger ones. Thank you for that answer. Uh Ms.
▶ 1:05:38uh when Joyce Flores started, you did not have access to the DoorDash or other delivery apps. How has access to these new apps contributed to the growth of your Thank you for your question. Um our very first year with DoorDash, we grew 10%. Our sales grew 10%, and they're growing over and over every year as we continue to work with them.
▶ 1:06:06Um it has definitely been a wonderful opportunity for us um even in commissions. It's a lower cost that we pay opposed to wire services that we've used in the past. And our deliveries get there much quicker. Thank you very much. I'm out of time. Appreciate you coming here on your own time, your own dime to make America great again through small businesses, the fabric of America. And with that, Madam Chair, I yield back.
▶ 1:06:34Thank you. Thank you. I now recognize Ms. McIver from New Jersey for 5 minutes. Thank you so much, Madam Chair, and thank you to our ranking member for holding this hearing today. I want to thank each of our witnesses for traveling here today and being with us today, especially on a cold um day. Um many people say the gig economy gives workers flexibility and a chance to be their own boss. But for a lot of modern workers and small businesses, things look really different right now.
▶ 1:07:03Right now, just a handful of large food delivery platforms control who gets work, customers, and income. As a result, small restaurant owners are being squeezed, and workers have few protections and not much power to negotiate. My district, New Jersey's 10th congressional district, is home to more than 1,000 restaurants and thousands of gig workers.
▶ 1:07:26They depend on food delivery platforms to continue to have a thriving business, find customers, and put food on their own tables. If we want to support entrepreneurship and economic mobility, we must make sure the gig economy works for everyone, not just a few. That includes not just the platforms, but also the workers and small businesses who keep it going. With that, Ms. Turner, I would love to turn to you. Thank you so much for your testimony.
▶ 1:07:54Just want to give you a few a little bit of opportunity to expand on some of the things you talked about in your opening statement. One, you mentioned in your testimony that delivery drivers often work for several food delivery apps just to get by. What does this suggest about whether gig workers can earn a steady, livable wage in this system? Um thank you for the question.
▶ 1:08:18Um I can't necessarily speak for drivers, but I can say as my experience as an operator, when I see um a driver come in and pick up two different orders from two different platforms, um often they will be flagged to wait for another order that is um going to delay the quality of the first order. Um it lets me know that they're they're juggling this because they have to. Um that's an assumption on my part, um but I see it over and over again.
▶ 1:08:45Um that they have the two signs in their in their car window that they're driving for both. They're juggling orders, and um and I I think that a lot of the drivers that we encounter have very different levels of experience. Um I can say that from a restaurant point of view, I think that there should be a little bit more screening, a lot more training. Um you're dealing with food.
▶ 1:09:11Uh we have a lot of regulation on restaurants because we can it it can be dangerous to feed people. You have to know what you're doing. Um and I think that that should also go for the apps. Yeah, thank you for that. We've heard um concerns about the concentration of market power among a few dominant delivery apps, obviously. Based on your experience, um how does having only a few major platforms affect your ability to run your business?
▶ 1:09:40Um it's a huge um obstacle for us, mainly because we're competing against them for our own delivery. Um we during COVID, obviously, everything went to outside of our doors, and we signed up with platforms that we would never have signed up with. Um so at one point we were on four apps. Um we still are. Um but those are integrated into our point of sale, which makes it easier. But four iPads, four printers, um and then those those apps are getting consolidated.
▶ 1:10:08So for instance, I've never signed up with Postmates, but my restaurant is listed on Postmates because Uber has bought them. Um I think that there's just not the transparency. The customers don't know um that I'm not dealing directly with some people. Um so I think it it the transparency is not there. Um I don't I don't I don't have the ability to contact my customers. I don't have the ability to mitigate when things go wrong. And for us, joining the apps originally, pre-COVID, was was for marketing.
▶ 1:10:38Was to reach new people. And at that point it was about 5% of my business. And currently it is now 20% of my revenue. And if I cut those ties, then um I lose a large share of my my revenue every month. Yeah. As these platforms have become more powerful over the time, have you seen any way different that they treat small businesses? Um I think they know that we are um stuck in a pattern with them.
▶ 1:11:05I think that um they have huge marketing budgets, which um we all pay for. Um so, you know, when I see the Super Bowl ad with the celebrity, um it actually hurts me because um I think small businesses are hurting. Um as far as I know, restaurants are in a worse shape than during COVID. Yeah. And so right now we could really use um platforms that call us partners to act like partners. That's true. Yes. Thank you so much for that. With that, I yield back my time, Chairman. Gentle lady yields back. I now recognize Ms.
▶ 1:11:34King Hon, from the northern from the great Northern Mariana Islands, for 5 So I'm from the Commonwealth of the Northern Mariana Islands, and it's sometimes these conversations with regards to policy and opportunities are very interesting to me. I come from a place where there's very very limited opportunities. And people right now are struggling to even have any types of income. We don't have much of a gig economy to speak of.
▶ 1:12:01And, you know, one of the challenges is that we we still live in a place where direction we don't have physical addresses. And so having online platforms like this is a challenge. Uh most people give directions like, "Hey, go down two two streets, make a right at the coconut tree. You see that yellow house?" You know, and so it's it's hard to have these types of platforms, right? And um we do have young entrepreneurs. One, his name is Cameron Atalig, who is trying to develop an app.
▶ 1:12:30And I, you know, want this to be an opportunity to encourage somebody like him to focus on figuring it out how how we break into uh this new industry. And so this question is for you, Ms. Sharp. Um how how do you how do digital platforms help reduce barriers to entry, such as capital requirements, access to or other administrative burdens for aspiring entrepreneurs?
▶ 1:12:55And in what ways do they support small businesses beyond just providing delivery or logistics for services? I want him to hear this so that he can be encouraged to focus and and hopefully uh create this type of industry back home. Uh thank you for that question, Congresswoman. I think that you've hit on a couple different really important things. The first and foremost is that generationally, we are seeing younger people embrace digital platforms and digital work to learn entrepreneurship skills so enthusiastically.
▶ 1:13:25So the fact that um you have constituents who are doing that doesn't surprise me. Um there are three basic ways that that digital platforms support entrepreneurship. The first is experimentation. Uh you can through a platform, you are able to um try out multiple different kinds of work. You can jump on and off to at at your leisure and work whenever and wherever you want to, often around other kinds of work. Um so that's one.
▶ 1:13:53Secondly, it provides sort of ready, easy on-ramp to uh to earn money immediately. There's no there's no waiting, there's no application, there's no 2 weeks before you hear back from a potential boss. Like you are the boss. And so you learn how to operate in that sense. It used to be, many years ago in this country, that that people's first jobs, often in the service industry, were things where you learned about the chain of command.
▶ 1:14:20And now we see people learning how to be their own bosses and how to, you know, do things like multitasking and and and evaluating the cost-benefit of working with or through different platforms. And those skills of entrepreneurship are so critically important. Um and then finally, there's there's this concept of it it decreases risk um in starting a business if you have ready fallback income.
▶ 1:14:45And that has been crucially important for people as So I hear you uh and Ms. Bu- Buxt- Buxton um give us statistics and just being industry subject matter experts.
▶ 1:14:58And so given that the CNMI is heavily dependent on the tourism industry, I wanted to hear um what your thoughts are or what any uh data that you have or experience so with regards to areas that rely on tourism uh that that are tourism dependent, right? And how um I want to hear about how the gig economy platforms adapt to seasonal or or tourism diff- uh industry different demand patterns.
▶ 1:15:31For me? Either. Um well, an example for my business right now is that we work for a very large uh amusement park organization that's only open in the summer. So we can only conduct research and only need to conduct research over a few weeks period of time. Uh so on our end of things, uh we need to find people who are interested in going uh and who would enjoy going.
▶ 1:15:59Uh from the point of view of the uh the person who um took on this project, um they would get a free day in the park. They could take their kids. They could enjoy it. And it's something they do because they want to, not because they had to. And it gets us access to consumers. They're actually engaging with a product or a place uh that really value being able to go there.
▶ 1:16:22Uh so the ability to scale projects like that or to uh conduct projects in a short period of time uh is only possible because of the apps. Yeah, and I think the same that in my 8 seconds left, um the ability to scale up and down quickly and meet demand as demand changes is really important. Thank you. I yield back, Mr. Chair. Gentle lady yields back. I now recognize Mr. Cisneros from the great state of Thank you, Mr. Chairman. I thank all our witnesses for being here today.
▶ 1:16:52look, my Republican colleagues in this administration continue to talk about how great everything is. How great they're doing. But I disagree. Things aren't that great. The economic economic decisions from this administration are increasing costs and making life harder for working There is widespread uncertainty among small businesses. Last month, the consumer price index spiked at 3.3% year-over-year. Consumer sentiment is at a record low.
▶ 1:17:22Small business bankruptcies are up 67%. The Fed's Beige Book from last week saw shrinking margins and energy and fuel costs sharply rising. Prices are going up due to tariffs, and insurance premiums and health care costs are skyrocketing. The White House staged a photo op with the DoorDash grandma to tout the so-called wins. But she is hard at work and is a GoFundMe now to cover her husband's medical expenses for cancer treatment.
▶ 1:17:50She shouldn't have to make over 14,000 deliveries for a family to afford health But this administration made historic cuts to health care, and they're about to double down in the next reconciliation package to cut health care even further. They are looking for ways to pay for an unpopular war and for immigration enforcement that also hurts our labor market and small businesses. And even more jarring is the president's budget hurts cancer research funding.
▶ 1:18:17When you look at the gig economy, half of the participants joined to earn extra Involuntary part-time work or workers who want full-time work, but are not given full-time hours, are the highest participants in the gig economy. 20% of those who took a pay cut, reduced hours, or lost their jobs have turned to gig work. So a large portion of folks are not turning to gig work out of choice, but out of necessity.
▶ 1:18:44Only to make roughly 50 to 65% of what they would make in traditional roles. And on top of that, they're being squeezed by tariffs, gas and energy prices, inflation, and increasing health care costs. The gig economy can be great for some, but in the current economic reality, people are hurting. So with that, uh Ms. Acevedo, over 80% of all cut flowers sold in the United States are imported.
▶ 1:19:14In 2025, that is that was $2.26 billion in imports. What impact did the tariffs have on the floral industry and on your business? Like thank you for your question. Like all companies, we are navigating the tariff landscape and we have seen the value in our partnership with DoorDash because we are able to reach more customers. So focusing on designing beautiful flowers is staying our focus. But have your costs risen?
▶ 1:19:46Has it Has the cost of flowers risen?
▶ 1:19:48Yes, they have. Thank you. Ms. Thurner, what was the impact of tariffs on restaurant industry and on your business? Um thank you for the question. Um as an owner of a Mexican restaurant pretty much across the board, um tomatoes, avocados, chilies, all masa from corn that's heirloom from Mexico, tequila, mezcal, limes, pretty much everything I sell has increased.
▶ 1:20:13Um I would say our bottom line costs are 30% 35% higher than they than they were 3 years ago. And so you've had to raise your your prices as well.
▶ 1:20:21We've had to raise prices. We've had to cut items from our menu. Um we have bi-weekly meetings to look at what's selling and what's not. So we reduce offerings. Um we try to trim where we can. We cut down on waste. Um restaurants are very nimble. Um but we we're being stretched very very thin. I introduced the Cut the Burden Keep the Benefits Act which would allow small businesses to express their concerns directly to the SBA's Office of Advocacy regarding all government actions including tariffs.
▶ 1:20:51They could then assess the impact of these policies on small business and advocate within the federal government against these negative impacts. Is this something this committee should be considering to support a small business? So Ms. Thurner, would you like to be able to call the SBA and say, "Hey, these tariffs are having an impact on my business?" Yes, I would welcome any opportunity to give feedback to the SBA on how they can support small businesses. Ms. Esposito, the same to you.
▶ 1:21:19Would you like to be able to contact the SBA and say, "Hey, your policy This is how your policies are affecting my business?" Absolutely. Our costs just rose by 5%. Thank you very much. Ms. Ms. Thurner, uh it is my understanding that independent restaurants need stability to operate. What is the impact of inconsistent and drastic immigration enforcement actions that damage property or disrupt day-to-day operations? Um thank you for your question.
▶ 1:21:47I know that our workforce heavily relies on immigrants from farm to table um in all aspects of food. So I know that it has been heavily disruptive to supply chains um as well a community of fear. Thank you very much. With that, Mr. Chairman, I yield back. Gentleman yields back. I now recognize Mr. Petrone from the great state of Florida for 5 minutes. Thank you, Mr. Chairman. And uh thank you all for being here. Um I was in the restaurant business for 30 years. Family still there.
▶ 1:22:17Um COVID taught us a lesson. Thank God we opened up in Florida. But we had uh a a feeling we didn't know where our business was going to be because of COVID. So when we opened back up, man, we signed up for every single delivery service that was available just to try to scramble to try to keep the business open. And it was um it was it was definitely a a culture change for us. We're an independent restaurant.
▶ 1:22:45Um initially the the delivery services were taking a a piece of the action which was not attractive to us. So we'd soon just let people just order and come pick up. Um now the things have changed. So um one, thank you for what I think you have done to the convenience for the industry. Um and that was just more of a statement, not really asking for a response. But um I guess when I'm it's probably more towards Ms. Sharp.
▶ 1:23:13Um take my mother for example, 90 years old. Um still incredibly independent. Where do you see the ease for seniors with independence to be able to leverage these services? I mean, my mom loves Facebook. She loves texting. But you try to get her to engage in app, it's probably not going to happen. But I'm sure that's a potential market. Uh thank you, Congressman. I I think that's a really interesting question to raise.
▶ 1:23:42Um I and I think I'd answer it in two ways. Uh first, there there are sort of many user interface things that that platforms have tried to institute to make it as easy um for consumers as possible. So uh you might go back with your mother and sort of work with her to see.
▶ 1:24:02Um secondly, I would say that um within rideshare and delivery, there are uh there are increasingly options where you can uh order for a family member or
▶ 1:24:13Oh, yeah. um you know, sort of have deliveries in that sense. And and part of the benefit of this industry is that it has truly um increased accessibility for those um elderly or with disabilities. It has truly um sort of uh lessened the the problem of food deserts and access in rural areas. So there's there's all kinds of things that you raised there.
▶ 1:24:38Where do you see um evolution of delivery through automation, say with drones? Oh, that's a great question. Um we see that there is um opportunity for interaction between uh automated vehicles and the human populations of deliveries and drivers.
▶ 1:25:01Um and largely that's because um the the automated vehicles can take over some of the things that are less attractive for humans to do. Um so the sort of short, routine, lower-paid um tasks can be taken over by drones or or, you know, automated vehicles while saving the the longer, more complicated, um higher-paying rides for human drivers. And we do see that happening.
▶ 1:25:28I also will note that um while there's such experimentation and innovation going on in the AV industry right now, there we're nowhere near being able to use those things at scale. Uh and so there will, for the the immediate and um even longer-term future, there will be real combinations. And we think of it as multimodal and and um the ability to extend the delivery radius extends the opportunities for workers. And then this probably is just more or less a comment.
▶ 1:26:00as a parent who has children that definitely are more technologically savvy than I am, um I think
▶ 1:26:09it is what it is. You can't give the kid a credit card on his app because of the abuse they will go through. It's just too easy to order DoorDash and they abuse the hell out of it, Mr. Chairman. And next thing you know, you've got $200 worth of charges on your credit card and you're thinking your credit card's been stolen. No, it's your child just got a hold of it. So I know this is not uncommon in the industry.
▶ 1:26:31I know you're laughing, but this is this is obviously something that I feel like um you know, when it's time to call to try to change some of these settings or circumstances, um you know, a little more consumer-friendly because the parents called been out of shape and uh a lot of times it's like um I don't know. It's it's it's frustrating. I feel like sometimes I know it's capitalism, but it's also uh you know, a need to kind of work with parents, too.
▶ 1:26:58Um I guess I'm probably just more venting than than anything else. Well, as a parent of a middle and high schooler, I sympathize with you, Congressman. But um as an advocate of all of the opportunities that platforms uh offer for partner restaurants and shops, workers, um and consumers, I can't say that I'm going to want to stop consumer demand. Well, I understand. Just think I should point it out. Thank you, Mr. Chairman. Gentleman yields back.
▶ 1:27:24I now recognize the ranking member, Velázquez, from the great state of New York for 5 minutes. Thank you, Mr. Chairman. Um Ms. Thurner, I heard your restaurant has gone from getting 5% of your business from apps to now 20%. So my question to you is is it feasible for you to provide customers with an option to place delivery orders directly through your restaurant's website?
▶ 1:27:54Thank you for the question. Yes, uh we did build our own website during COVID. Um and we compete against the apps. So if you search for uh Mexican delivery, you'll you see apps no matter what. If you search for El Pato's, you see you see the apps first. What more can app companies do [snorts] to pro to promote a diverse range of options such as directing more traffic to newer independent restaurants to help them compete?
▶ 1:28:24Well, I think um part of the problem is the algorithm that is used within the apps. We have a lot of metrics that um are a little bit uh unfair, in my opinion, to small operators. Um if we don't have pictures on all of our items, if we don't um have the app on all of the time, there are things that push us down and we don't receive the most love status, which would push us at the top. If we don't spend marketing ads uh within the app, we are not at the top. So um we continually get pushed down.
▶ 1:28:52I think what they could do is make it more fair, um cater to people's choices. You know what your customers are looking for. Um you could just give them clear options that don't rank based on pay to And do the apps' marketing efforts sometimes conflict with yours? Uh yes, definitely. We uh are trying to do Google ads now.
▶ 1:29:15Um I feel that we are paying to be on a platform that is using our funds that we make them to advertise against us and that feels unfair. Can you talk to us about a methods have you that you've seen third-party delivery app companies using to grow their share of the food delivery market? Well, I think um, it's very similar to ride-sharing and I'm a victim of this. You put your card into a platform and you feel kind of like that's the option.
▶ 1:29:43You open up your phone and you automatically default to whoever you have given your information to. I know not everyone wants to put their card in a million apps. So, I understand that. But, they do have subscription models and passes where people get free delivery, discounts. Um, and so, I feel that the subscription model is locking people into a platform that we can't compete against the budget of the marketing that they have. Thank you. Um, Ms.
▶ 1:30:12Sharp, with DoorDash and Uber Eats commanding almost entire third-party food delivery market, less visibility on these apps can be financially devastating. How do app companies work to ensure restaurants have opportunities to rectify any issues before their listing drops down in search results or their storefront is deactivated?
▶ 1:30:43Thank you, Congresswoman. Um, I appreciate the opportunity
▶ 1:30:47to to provide a different perspective on some of these things because I do think it's important to have both perspectives um, as you're considering an issue. I in some of the issues that have been raised so far, it's there's been a focus on um, particular um, im- impressions or um, reactions that a that a particular restaurant has had.
▶ 1:31:14And, I do want to point out that these are marketplaces and marketplaces um, need to appeal to the worker, the restaurant partner, and the consumer at the same time. And, so they are they are constantly working to ensure that restaurant partners are happy. And, we do
▶ 1:31:30me ask you a question. How do you rectify for a restaurant that might not be at fault because the delivery guy was not able to deliver it on time or maybe deliver at all, didn't find uh, the the the address. And, then you're going to punish uh, the restaurant because uh, the person who made the order uh, was not satisfied. There are a couple different ways.
▶ 1:31:57There are hotlines where available to both workers and to restaurants to be able to communicate and there are in-app community communication tools. There's also extensive transparency up front about what the tiers and pricing are for different tools within the marketplace. So, every restaurant is free to pick and choose the things that work best for their restaurant.
▶ 1:32:22And, and if a restaurant hasn't hit on the particular combination of things that will make them most successful, we're happy to work with them to to improve that. So, that's a real issue right now. I hope that you are looking at it and and and seeking solutions that benefit It is it is absolutely to everyone's benefit that these marketplaces appeal to all of the participants.
▶ 1:32:55The gentlewoman's time is up. I now recognize Mr. Meuser from the great state of Pennsylvania for 5 minutes. Thank you, Chairman. Thank you to our witnesses very much for being here with us. The Trump administration has taken taken many meaningful steps to protect the gig and its workers by eliminating tax on tips for instance and rolling back the Biden era $600 on gig transactions.
▶ 1:33:19Uh, American businesses and employees of yours can keep more of what they earn while contributing meaningfully to the US economy. So, I'll just start with you, Ms. Sharp, if I can. Can you describe any federal policies or regulations that you believe are hindering or would help the growth of the gig economy and and gig entrepreneurs? I keep doing that.
▶ 1:33:43Um, uh, two that you hit on, Congressman, are are critically important and and that aren't our industry is enthusiastically supportive of. And, one is no tax on tips, which allows uh, tipped-based workers to deduct up to $25,000 um, in taxable income resulting in uh, app-based workers paying lower taxes.
▶ 1:34:03We did around tax day um, a quick poll of app-based workers and found that of those who knew about the policy, 69% saw savings and 47% saw substantial tax savings as a result of that policy. Um, so so that's one that has been incredibly helpful.
▶ 1:34:21Secondly, the the second thing you raised is the um, uh, the Department of Labor's new proposed rule regarding independent contracting, which dramatically streamlines the complexity of um, worker classification rules and ensures that that app-based workers and other kinds of independent workers are free to pursue the flexibility that is so important to them. That's great. You think that's motivated them to work more as well?
▶ 1:34:48I I I mean, I think that there is a trend and a sort of general trend in our society right now to have more than one source of income and sort of multi-earning and it is encouraging that kind of entrepreneurship. We see particularly with um, younger millennials and Gen Z that there's real enthusiasm for having more than one source of income and building that ability to be their own boss. That's great. That's great. Um, I want to ask you this as well.
▶ 1:35:18Um, the um, all right, you you you really just hit upon it how well the the raising of the threshold uh, for the gig economy. Uh, Ms. Acevedo, let me ask you. The Department of Labor under the Trump administration advanced a rule to provide a greater clarity around independent contractor status. Can you explain why clear and flexible worker, excuse me, classification is so important for gig entrepreneurs who value independence and control over their schedules?
▶ 1:35:49Well, I think the the flexibility alone makes a big difference. Um, for us personally, we're able to even with our own customers, when they call in and they want something to go out quickly and our drivers are already on a different run, uh, we send them through DoorDash to be able to pick that up and get it out quickly. So, we're really excited to have the platform and and to use it to our advantage. Excellent. Um, as well. Ms. Buxton, let me ask you if I can.
▶ 1:36:18Um, the um, what more could the SBA be doing in your view to help traditional small businesses owners become aware and adopt the digital tools that that are can be used so effectively? Well, the SBA That's right. The SBA already does a number of things. Uh, for example, next month they're having a virtual summit around Small Business Day. There's a lot of training that goes on during that.
▶ 1:36:42I think a lot of companies are really seriously focus right now on AI, but they really also need to focus on how they can use these platforms to grow their business. So, I think that there's an educational component either through SBA or SCORE or something like that. That's wonderful. And in my last minute, it's um, interesting how many of your employees or the or the those who work as contractors in the gig economy become entrepreneurs, start their own businesses.
▶ 1:37:11And and in a way, you know, I hate to not not for everyone, but that's what America's all about. We're an entrepreneurial nation and spirit. Um, maybe Ms. Sharp and then Ms. Acevedo, either one of you just explain what how that affects you. Do you lose people? Do you do you gain new new businesses right if the the employees want want to do the things on their own? Uh, actually no.
▶ 1:37:34We see we see app-based sort of digital platform work as a launchpad into entrepreneurship and find it exciting when somebody um, learns those skills through a platform and then applies them in as you say a traditional brick-and-mortar business. I mean, I think that's exactly the essence of the the American dream really to to learn a skill and then be able to um, advance your career and make more money because of it. Great. They're baking pies, not cutting them up. So, I appreciate that. I yield back, Mr. Chairman.
▶ 1:38:04The gentleman yields back. I now recognize Mr. Tran from the great state of California for 5 minutes. Thank you so much, Mr. Chairman and Ranking Member for holding this hearing. Thank you to our witnesses for being here today. The gig economy is a major economic pillar of how millions of Americans work, earn income, and even launch small businesses. In Southern California, I see this every day from rideshare drivers navigating LA traffic to delivery workers in Orange County to freelancers building their own client base.
▶ 1:38:34This model has opened new doors for flexibili- flexibility and small business growth. For many people, especially those shut out by traditional employment, gig work can be a lifeline. However, we cannot talk about opportunities without talking about accountability. Before I came to Congress, I was a lawyer defending workers who had been harmed by their workplace. So, I know what it looks like when a company prioritizes growth over safety and profits over people.
▶ 1:39:04I've seen it and fought against it. And unfortunately, I'm seeing this problem when it comes to the gig economy. Over the past decade, we have seen deeply troubling reports about sexual assault and harassment connected to ride-share companies and on-demand delivery services. According to a New York Times investigation, Uber receives a report of sexual assault or sexual misconduct in the United States every 8 minutes.
▶ 1:39:29California alone has been the site of some of the most high-profile case cases in this litigation. In its most recent safety report, Uber acknowledged more than 2,700 cases of sexual assault from 2021 to 2022 alone. Independent follow-up investigations found that many drivers accused of misconduct remained active on the platform even after complaints.
▶ 1:39:53And just this past February, a federal jury ordered Uber to pay 8.5 million to a woman who was sexually assaulted by her This isn't This isn't just a consumer safety issue. Gig workers also face assault, discrimination, and harassment on the job. And they also deserve protection, but many operate without the basic safeguard that exists in traditional workplaces. I'm all for supporting innovation, flexibility, and entrepreneurship that work that gig workers create.
▶ 1:40:24But a business model built on flexibility cannot double as a shield from accountability. The persons who show up at your door should be who they say they are. Their background should be properly And And if some something goes wrong on either side of the equation, the company that profited from that transaction needs to answer for it. That is not anti-innovation. This is basic consumer protection.
▶ 1:40:50And if these companies can't do both, then Congress needs to make sure they do. Ms. Sharp, millions of Americans use gig platforms every day for ride-shares, food delivery, and furniture assembly. But we've seen serious safety failures, including sexual assault cases. What standard background checks do your member companies require? And also, are those checks continuous or just a one-time screening? Uh thank you, Congressman.
▶ 1:41:16I appreciate you raising the issue, and I think that we can all agree that even one sexual assault is too many. our industry prioritizes very much the safety of all participants. As a marketplace that needs to maintain and attract the the business, really, of everyone involved, um we we find that um we're constantly looking at ways to improve the safety and accountability of the platforms.
▶ 1:41:45Um in everything from driver driver and rider matching interactions, where you you have to ask the person's name when you get into a car, to um uh like a emergency button that connects through GPS directly to emergency services in the case that something goes it we are as digital platforms and technology platforms, we're constantly iterating and constantly looking at those things.
▶ 1:42:12In terms of background checks, um we we want to ensure that all drivers are uh verified and authenticated as as much as possible, and everyone uh has to have a driver's license and a background check in advance of uh of going on to a a platform. And then we work continuously to spot-check as necessary and and um continue taking feedback from consumers, feedback from drivers, feedback from riders in order to improve those systems. Thank you, Ms. Sharp.
▶ 1:42:41And as as a uh follow-up to that, we've seen cases where individuals uh credibly accused of misconduct were able to continue working or simply join a different platform. Uh that's really troubling to me. What systems are in place across all of your member companies to flag and remove bad actors and to prevent them from simply moving to another platform?
▶ 1:43:03Um every platform has extensive verification and um authentication processes, and we we very carefully um try to ensure fairness in deactivation for for um both riders and and drivers. Mr. Chairman, I yield back. Gentleman yields back. I now recognize for the second time, when we talked about you before you got here, Congressman, uh Congressman Fuller, our new member from Georgia, for 5 minutes.
▶ 1:43:34Mr. Chairman, it's an honor to be part of this uh committee. Uh look forward to working with all of my colleagues here, my Democratic colleagues as well. I'm a husband to a small business owner. Um so this is these issues are are near and dear to my heart. So I want to turn my first question to you, Ms. Acevedo. Your business might have saved me when I was a law student in Dallas and got my then fiance some Valentine's flowers when I probably forgot about that holiday. So thank you very much.
▶ 1:44:02Um so your family has been in the floral business for decades there in Dallas. And in the past, the only way for local florists to expand their reach was to rely on traditional wire services, a system that made few people at the top very wealthy, including a a current governor and former member of this body, but often squeezed small small businesses like yourself and uh who were actually doing the work.
▶ 1:44:24So I wanted to ask you, and I know you may have talked a little bit about this before, but how has the emergence of the gig economy uh platforms disrupted that old model and provided a more competitive, viable alternative for your family's business? Thank you for the question. Um and thank you for ordering.
▶ 1:44:42I think it is it's a wonderful way uh to DoorDash has brought in just a really good way of partnering with them and expanding our business as well as saving um on those traditional fees. Um those fees are really high, and then we have all the other things that come with it, like membership fees and those types of things. And with DoorDash, it is one small fee, and it covers everything.
▶ 1:45:11Not only does it cover everything, we truly believe that they are our partner. We had a situation um just recently with one of the wire services, where my uh made a delivery on her way home, and that delivery was we were told the person didn't get it, which they did. Um and immediately, we received a message saying you're not getting paid for this order.
▶ 1:45:36Uh in the 2 and 1/2 years we've been with DoorDash, we had one incident where we had a Dasher come in, pick up the flowers, walk out, and then cancel the order. It was our first time. It was super quick to go to the to the iPad and call them and say, "Hey, we have this situation we've never had before." And they said immediately, "We're going to pay you for the order. Make another one. We'll send another Dasher. No problem." That is a partnership to me and to our small business.
▶ 1:46:02And it makes a huge difference when we really do feel like a partner and not like an outsider opposed to some of the wire services that we work with. And on top of that, we're actually exiting some of those wire services as we speak, because our partnership with DoorDash has been such an incredible change. Well said, Ms. Beautifully said.
▶ 1:46:25Um And let me ask you this, if if Congress were to step in and regulate those platforms that you were just describing, as some want to do, are you concerned that small businesses like yours would be forced right back into the arms of those companies that you were talking about? It definitely definitely would be. If they were to stop these platforms, we would have to go back into that harsh situation with wire services that really don't partner with us. They are there to make their money.
▶ 1:46:53They are there to if I could show you just one of the invoices, it would be horrendous. Um so it would really take away from our business. Uh like I said previous, we our very first year, we grew by 10% just using DoorDash, and we continue to grow every quarter just using DoorDash. And on top [clears throat] of that, our deliveries get there super quick. Always important, especially when a husband forgets or something like that.
▶ 1:47:19[laughter] So And it sounds like from your testimony, the the partnership that you're describing is a free enterprise, voluntary, strategic decision that you're making to reallocate your workforce to serve in-store customers um during rush rushes. Would you agree with that? Absolutely.
▶ 1:47:34Um it also helps us employ even more people um during during last year, when we first start or 2 years ago, when we first started with them, we had to actually turn the machine off because we could not keep Uh and we were super excited, but we couldn't keep up, and then we were able to plan better, have more people come in just to handle the DoorDash part of our business, which again grew us by 10% in just 1 year. Amazing. Mr. Chairman, I yield back yield back my time. Thank you.
▶ 1:48:04Gentleman yields back. I now recognize Mr. Reschenthaler from the great state of Maryland for 5 minutes. Thank you, uh Mr. Chairman. Thank you to our ranking member, and I want to thank all of our witnesses for joining us today. Uh as we all know, the rising cost of living and a sluggish job market is pushing more and more Americans to jump into this gig economy that we're talking about today. We know it's also challenging business owners, like those we heard from today, who are grappling with the higher cost of fuel, labor, rent, and insurance.
▶ 1:48:34Of course, we can't have a complete conversation on the impact of rising costs on businesses without mentioning the expiration of the Affordable Care Act's tax credits, which we know is exacerbating the affordability crisis and pushing so many Americans to pursue second and even third jobs just to pay the bills. More than 5 million small business owners are um and self-employed Americans are covered by the ACA.
▶ 1:49:02More than 4.4 million of those received tax credits worth an average of $1,500. It's also worth mentioning that gig and self-employed workers, including the more than 527,000 of those in Maryland, are often paid sub-minimum wage uh wages while taking on the primary risks and cost of doing business under the name of their highly profitable parent companies. At the same time, we need to consider the impact the gig economy has on small employers.
▶ 1:49:33Nowhere is this more evident than the restaurant industry working in partnership with food delivery drivers like Uber Eats and DoorDash. I say partnership because I think it's in the interest of all of us and this country and workers to make sure that that's exactly what it is, partnership between the parent companies and their drivers, and also these companies with their relationship with other small businesses across the country. Uh Ms. Turner, you raised some interesting points about the impact of delivery apps on already razor-thin margins.
▶ 1:50:01We know that restaurants aren't just job generators, they are community gathering places, they sponsor local sports teams, they support local ag and so much more. We want to make sure that we are having a fair, transparent, and competitive framework that exists for both industries. And so, I I'll start by asking you you mentioned a few policies through your testimony, screening, training, transparency, the ability to connect with customers.
▶ 1:50:26Um can you go a little deeper about what federal policies you think would help create that more sustainable collaboration or what those policies might look like um to help facilitate that environment?
▶ 1:50:35Yes, thank you for the question. Um at a minimum, I would ask that we uh focus on three things. Um first would be fee transparency. Restaurants and consumers should know exactly what fees are being charged and why and from whom. No hidden markups, no opaque algorithms. Um secondly, I would say data access is important for small businesses to know who their customers are and to be able to market to them. Um if a customer orders my food, I should have the right to know who they are so I can serve them, correct problems, and build a relationship.
▶ 1:51:05The platforms have no legitimate business reason to to deny me that. And third, a fee fairness. Commission rates should be capped at a level that allows a business operating on 4 to 6% margins to participate without losing money on every order. Several cities, including San Francisco, have already done this Um I'm asking Congress to extend that protect protection nationally. And I'm not asking to turn back the clock. Uh we appreciate these apps, they're integral to our business.
▶ 1:51:30I'm just asking for a floor of fairness that lets independent restaurants compete on the merits of their food and not the depths of their wallets. And while we have an opportunity with the FC FTC asking for Congress to make these rules, I think it's urgent and imperative that we do so I appreciate that. And I also appreciate it as the ranking member mentioned, yeah, the the revenue growth from 5 to 20%. So, obviously a big portion of your business.
▶ 1:51:53But you mentioned sort of the fee schedule generally, with these fees accounting for more and more of your bottom line, I imagine, what's the long-term business outlook if the existing regulatory framework remains completely unchanged for your business? Well, I can see a decline a decline in our to-go orders. We had to make a decision to um Previously, when we first signed up with apps, we did not have the ability to change menu prices. We were contractually bound to offer the same prices as in the store. Now we are allowed to increase, which we have had to do.
▶ 1:52:22So, if you order directly from me, you are paying uh quite a bit less for each dish. Um so, we are twisting the value perception. Someone could be very upset that they receive a $7 taco that uh they can see on my menu is $4. Those types of things I think erode trust and erode customer loyalty, which is the bread and butter of restaurants.
▶ 1:52:44So, customers ordering online may be paying both more for the product plus the service delivery fees. Interesting. Um [snorts] Ms. Sharp, with my remaining time, uh I know DoorDash began a pilot program in Maryland to help with health, dental, vision, retirement, um and paid time off through portable benefits. Um can you just give us a quick update on that and what your response is to what many say about the program about it not sufficiently meeting the needs of healthcare costs and potentially being a way to permanently enshrine contractor contractor status for gig workers?
▶ 1:53:14Uh well, thank you, Congressman. Appreciate the question. Um you're right that portable benefits uh have been an exciting new experiment and innovation in your state. So, um we very much appreciate the partnership there. Um as you I think identify, portable benefits are a set of benefits that follow the worker Gentleman's time is up. rather We'll follow up. I yield back my time. Thank you, Mr. Chairman. Chairman yields his time back. I now recognize Mr. Weed from Wisconsin for the uh for 5 minutes. Thank you, Mr. Chairman.
▶ 1:53:43Thank you to our witnesses for being here today as we discuss the future of which is what makes our country so great. You know, from uh delivery drivers to website developers, freelance workers provide invaluable services for small businesses across our nation. Many entrepreneurs are drawn to these jobs due to the flexibility they offer in determining how and when they work. This flexibility is especially appealing to younger generations with over half of Gen Z participating in freelance work.
▶ 1:54:14Since the beginning of the Trump administration, freelancers have seen both regulatory and tax relief. These reforms, many of which were included in the working families tax cuts, were designed to allow hardworking Americans to keep more of their hard-earned money. Provisions like no tax on tips, no tax on overtime are particularly beneficial for freelance workers who rely on this additional income. And hardworking Americans are taking advantage of that.
▶ 1:54:43The numbers speak for themselves. More than 6 million filers have claimed no tax on tips with an average of over uh in refunds. More than 25 million filers have claimed no tax on overtime, saving an average of over $3,100. These are real, these are tangible, and they're wins that workers across our country can take to the bank. So, I'll start my first question, Ms.
▶ 1:55:10Um what benefits um are independent seeing from provisions from the the working um families tax cuts uh in regards to the no tax on tips? Can you just uh expand on that? Uh Congressman, they are seeing lower taxes. Um we see 69% of people um in the app-based industry have uh reported paying lower taxes as a result of no tax on tips. 47% paying substantially lower.
▶ 1:55:37Oftentimes we think of uh freelancers in, you know, that work in major cities um like here. But could you just tell us about, you know, your experience with those in rural areas throughout our country? Yes, thank you. That's a great question because there is often an assumption that the digital world operates mostly in cities. And what we've seen is that it's a pretty even distribution between rural, suburban, and urban locations.
▶ 1:56:02Um platforms serve rural Americans um with providing income for somewhere between 20 and 30% of all adults that live in rural areas. Um and these are sort of meaningful supplemental income supports um when options are for full-time work are sometimes limited.
▶ 1:56:17So, we also see six in 10 rural adults are consumers of uh of app-based platform products and services, um increasing mobility, increasing access to food access and goods, and and, you know, sort of saving time by having the goods and services come to you. Thanks. Uh Ms. Buxton, so gig entrepreneurial entrepreneurship uh is increasingly popular, of course, among Gen Z and millennials.
▶ 1:56:48Can you discuss how digital platforms like yours lower the barrier to entry to become an entrepreneur? Well, um learning how to as as uh Ms. Sharp was explaining, learning how to
▶ 1:57:04operate yourself as a business, how to be responsible, how to uh be part of an ecosystem that requires you to accept what you want to do and then go do it or cancel it if you're not going to do it. So, it it it creates an opportunity for people to learn um the ups and downs of being their own business, if you will.
▶ 1:57:24Um it also gives people um an opportunity to be exposed to different industries that they may not have ever been exposed to or different types of work uh as they're researching what they may want to do. And they may actually find that there's a way for them to make something better, and then they go out and make it better from Very good. Well, thank you all for this great discussion. Uh Mr. Chairman, I yield back. Gentleman yields back. I now recognize Ms.
▶ 1:57:52Gulton from the great state of Michigan for 5 minutes. Thank you, Mr. Chairman. Thank you so much to our witnesses uh here today. Um Ms. Turner, your testimony highlights several challenges of participating in the gig economy as a restaurant owner. You note that having your business on multiple food delivery platforms is a defensive business strategy. more a matter of survival than choice.
▶ 1:58:19I know you've you've gone over this uh you know, in in the question in the testimony today. So, thanks thanks for bearing with me. But if you were to advise a new restaurant owner on navigating food delivery apps today, what would you tell them based on what you've learned? What would your advice be to them? Um thank you for that question. I do give people advice. Um there are, outside of just delivery, um there are ghost kitchens, um there is catering.
▶ 1:58:46Um the apps want us to allow people to order from their table in the restaurant through the app. I'm not sure why. Um but there is just this encroachment on data. And I advise people like, whatever you can do to set up your own plat- platforms so that you can target and market to your customers to do that. The reality is we do need to participate with these apps. They own the market share. It's 99% of delivery orders are ordered through these parties. So I advise them to look at what they can afford to do. What are your highest margin items?
▶ 1:59:15Don't put it your full menu on the on the apps. Make sure that your accounting for the containers that everything has to go in because that's another expense that we don't have in the dining room. And to just make sure that you have to test things that they could sit for 45 minutes before someone eats them and not be unsafe or ruin the quality. Right. Right. Great great advice.
▶ 1:59:39There's also a lack of transparency with these platforms that make it difficult to plan for the long term and grow your business. Many platforms have unforgiving algorithms resulting in deactivations of businesses or delivery workers if their ratings fall below a certain threshold which again are not clear, right?
▶ 2:00:03Given the nature of these algorithms, how would having access to information including this customer data benefit your business and the ability to navigate these services? I [snorts] think that customer data is We do our own delivery and pick up which actually DoorDash and Uber fulfill through our point of sale for a flat fee. So I feel like that's a much fairer system. I can call my customer. I don't know there's a problem unless they call the store. Yeah.
▶ 2:00:31So I I find out maybe two or three days later that something was missing from an order. Two or three days later is too late. So when a customer is upset and hungry and they don't get what they expected, we try to mitigate that immediately or we lose that customer. Mhm. We know the cost of goods for families and small businesses continue to rise due to tariffs and inflation. Ms.
▶ 2:00:58Thurner, again, do you typically have to raise your menu on the app to cover their fees and if so, do you worry about reducing the number of orders you receive or suppressing your listings on the app if you have to raise your you know, due due to this? Yes, I mean that is very clear within the metrics of the categories that push you up to the highest visibility. If your pricing is not the same as your menu, then you are pushed down. And that's a pretty clear policy.
▶ 2:01:26However, we would be out of business if we didn't add prices to our menu items. I don't I don't see how we could sustain. We have 4 to 6% profit margin if we're giving those fees directly to them and absorbing that with the volume that we do. There's absolutely no way we would survive. Yeah. Thank you. I yield back. The gentlelady yields back and I recognize Mr. Jackson from the great state of Georgia for 5 minutes. Well, thank you very much, Mr. Chairman.
▶ 2:01:54And before we begin, I also want to thank I should say our witnesses for your testimony today. Before we begin, I want to recognize from my district. We're talking about apps today in the app-based economy. We should know sitting behind you are students from Carrollton High School who won the Congressional App Challenge for Georgia's third Congressional District. So to Omar Wade, Elena Juliet just over your right shoulders, they are the winners of the app challenge from my district and we're very excited for them as they take this next step to develop new applications.
▶ 2:02:23So congratulations to Carrollton High School. Eight years in a row they've won. But if I could start with with Ms. Thurner, I deeply appreciate your testimony and I love learning about the history of of industries and I'm curious what you would cite as kind of the dawn of the app-based industry and I'm incredibly impressed with its its its rapid rapid growth and the future it holds. But I'm curious what you would start or what you suspect is the the dawn of it. When when did it begin?
▶ 2:02:53Thank you for that question, As we discussed a little bit in this hearing, this is an industry that is sort of on the cusp of entrepreneurship and has been leading the way and is not even a generation old.
▶ 2:03:07The first the app platforms in the delivery industry was Grubhub and things related to that about 20 years ago and in ride share Uber maybe 15 or 17 years ago and it's taken off exponentially largely because the industry and platforms deliver a win-win-win for all of the participants. So riders you know get easy access to mobility and getting where they need to go.
▶ 2:03:38Drivers get flexible income that they can work whenever, wherever and however they want to. And restaurant partners are able to extend their delivery radiuses, grow to new customers, appeal to people that they wouldn't otherwise have been able to appeal to as a result. And so the industry really is a marketplace that that draws together all of those different stakeholders in a way that increases the growth for everybody.
▶ 2:04:08Last year we passed the One Big Beautiful Bill Act and within it we and as you've spoken today included no tax on tips specially for app-based earners. Could you share with this committee how that's perhaps helped the the industry grow and recruit more people into it knowing that they can receive no tax on tips?
▶ 2:04:26We've seen immediate pick up and the no tax on tips initiative with about 69% of of participants in the industry reporting that they've seen lower taxes as a result of the policy and 47% seeing substantial substantially lower taxes. Thank you. Ms. Alvarez, I really appreciated your testimony and frankly very inspired about the growth of your business over the last some multi-generations.
▶ 2:04:54But you think about the growth you've experienced the last few years because of DoorDash and what it's offered to you. Twice in your testimony you referenced the challenges small businesses face with permitting and paperwork and just burdensome regulations. Could you share with committee any personal experiences with which you've dealt with with burdensome regulations and how best this committee could focus on alleviating those burdens for you? Thank you for your question. We actually rebuilt Joyce Florist 5 years ago.
▶ 2:05:22So we have a new building and there were a lot of permitting issues. There were a lot of issues in general with this building the the building and because we had more than one person we were working with. We worked with several different people within our city. And so it would be wonderful to have just one person that we dealt with that would know everything about the entire process.
▶ 2:05:52At one point we waited 6 weeks for one meeting just to have our building moved forward closer to the street which it was not before. And so just meeting after meeting and just different barriers that we had. So if it would be great to have one point of contact person that we could kind of work with throughout to have the same information instead of different people with different information. Thank you very much.
▶ 2:06:22Thank you. And if I can just ask you to with respect to DoorDash, what led you to DoorDash? Was it just the business model they offered or were there other you know, applications you were interested in? Well, when we were first approached about it, we were surprised that they were going to allow us to sell flowers.
▶ 2:06:40We were super excited to have a different avenue. And then we were also excited that the fees were minimal compared to wire services. And so we decided to take the chance and we absolutely love it. Taking a risk it pays off. That's what's the that's what's so inspiring about small business and entrepreneurship. So applaud each and every one of you for your testimony and thanks to the Carrollton students for winning our app challenge. I'll introduce you to you all after this hearing and I yield back to our Mr. Chairman yields back.
▶ 2:07:10I now recognize Ms. Goodlander from the great state of New Hampshire for 5 minutes. Thank you, Mr. Chairman and thank you to our witnesses for being here today for this really important hearing. Before I got to Congress, I worked in the Antitrust Division at the Justice Department. So I spent my days thinking corporate monopolies and the impact of monopolies across our economy on hardworking people and on small businesses. Ms.
▶ 2:07:37Thurner, I wanted to to pick up on your very powerful written testimony. Where you really point out what we're dealing with here when we think about the market for just the role that these big corporations are playing in in your lived experience and in the important work you're doing to maintain a small business. The three dominant American delivery platforms or US-based I should say.
▶ 2:08:07DoorDash just the profits are pretty eye-popping. In the last 5 years you point out we've seen a fivefold increase in corporate profits from DoorDash, Uber Eats and Grubhub.
▶ 2:08:20Um Meanwhile, as you point out, independent restaurants have seen First of all, we've lost almost more than 9,500 small independent restaurants in this country and we're seeing razor-thin and often negative margins. Ms.
▶ 2:08:41Thurner, I wanted to ask you if you could speak to the impact of in this market on the work that you're trying to do and and your small Yes, thank you for the opportunity to share. Um This is a common problem happening across industry. So, um it's really affecting us in our power to negotiate. Um a free market is a free market when you have multiple players.
▶ 2:09:08Um this feels like a duopoly, uh similar to what's happening with the Cisco and um US Foods of the world. We have less and less choices of who can provide us services, which um they tend to give deals to larger chains, to people who have more buying power. And while I understand that behooves them, um we are the soul of America's cities.
▶ 2:09:31Entrepreneurship is the heartbeat of America, and if we only want to be less left with corporations, then we can just choose to turn their our head the other way. Otherwise, I think that we need some regulation because this is um not a fair market, in my opinion. So, less choice, higher prices.
▶ 2:09:52Um you point out in your testimony that all three of these massive platforms operate without any federal cap on commission fees, with no requirement to share customer data with restaurant partners like you, and no mandate for pricing transparency either to the restaurants or to the consumers.
▶ 2:10:14Um can you just speak to the impact that commission fees and uncapped commission fees have had on your ability to keep the lights on at your restaurants? Um it's definitely changed many things since um as I stated previously, pre-COVID, it was a very small percentage of our business, and we viewed it as marketing. And so, um as long as it wasn't a a total loss, um we were gaining um exposure to to customers, which I think is a benefit of this market.
▶ 2:10:43They do have um the customer attention. I do think the issue now is that we our costs on everything are much higher. Um and if we don't increase our prices to absorb the percentage, then we will not be able to either offer that service, which would we would lose a lot of market share. Um a lot of new people who move to our area find us on apps because that's their first uh exposure when they're moving in and unpacking. They don't want to cook or they can't their kitchen isn't ready, so they're ordering delivery.
▶ 2:11:14Um COVID really put us in a position where that was all of our business, and then it really got out all of the customers into this pattern. I think that you can see in that delivery growth that we just talked about. Their their sales are growing, while our margins are shrinking and our businesses are closing. Mr.
▶ 2:11:33By, I wanted to to pick up on just the sky-high and rising costs of gas right now, and how um your member companies are thinking about um the basic question of whether you're going to a- adjust your pricing algorithms to account for rising gas prices um into the compensation that you offer for for ride-share and delivery drivers.
▶ 2:12:01Uh thank you, Congressman Congressman. Um this is an emerging issue, and it has um it's a little early to have full statistical analysis on on sort of Oh, I'm not asking for that. Just as a general matter, do you commit to do your member companies commit to actually adjusting pricing algorithms to account for sky-high gas prices?
▶ 2:12:23Our member companies already um have relief programs that work with drivers to partner with gas companies in order to provide deals and discounts and things like that. Well, I see my time is up. Thank you um to our witnesses. I I'll be following up with questions for the record and hope we can get your commitment to ensure that your drivers are paid fairly. Thank you, Mr. Chair.
▶ 2:12:44And the lady yields back. I would now like to thank our witnesses for their testimony and for appearing before us today. Without objection, members have five legislative days to submit additional materials and written questions for the witnesses to the chair, which will be forwarded to the witnesses. I ask the witnesses to uh please respond promptly. There's no further business. Without objection, the committee is now Thank you.