Last month, New York City Mayor Zohran Mamdani backed the “Delivery Protection Act,” which would require companies such as Amazon to directly employ workers who do deliveries for them through outside companies that hire gig workers. It would also subject local fulfillment facilities, such as Amazon warehouses, to a new licensing regime, meaning that they could operate only if they comply with certain employment standards, among other things. While this may sound beneficial to workers on paper, the truth is that the bill would deprive self-employed individuals of opportunities and violate the spirit of entrepreneurship.
In a free market, transactions are voluntary and based on mutual benefit. The only reason someone would choose to work as an independent contractor or for a third-party provider is that they deem it beneficial. Many workers actually prefer to be self-employed, whether it be for greater flexibility, more time with family, or potentially better pay. When governments force specific terms of employment on businesses, they prevent individuals and businesses from negotiating the terms that best suit their circumstances.
Rather than expanding workers’ economic freedom, overly strict regulations can make work less accessible, especially if regulations are costly to companies or encourage automation. When labor costs are artificially inflated, the government is incentivizing automation, because companies will save significant amounts of money in the long run. When the market is allowed to determine wages, on the other hand, the return-on-investment math of automation doesn’t always make sense.
Amazon has warned that this law could cost New York City households $664 per year. Ultimately, higher prices may reduce demand for Amazon’s goods, putting pressure on the company to reduce costs through any means. In other words, if there was not an organic incentive to automate labor before, there certainly will be if this bill is enacted.
Furthermore, states with the most stringent labor regulations often have the highest unemployment rates. California, for example, not only has one of the highest minimum wages in the country but also requires that many gig workers be classified as employees. It should not come as a surprise that the Golden State also has among the worst unemployment rates in the nation.
The true way to empower workers is to give more economic freedom, not less.
In 2023, Utah led the nation on this issue by becoming the first state to enact portable benefits legislation. Instead of requiring that 1099 workers be classified as full-time workers to receive health benefits, the law allows employers to voluntarily contribute to independent contractors’ portable benefit accounts, which can be used to purchase health insurance. Since then, other states have followed suit, such as Wyoming and West Virginia.
As of 2026, 38% of all workers in the United States earn money from gig work. In order to deal with the current labor market, legislation should enable people to freely leverage their marketable skills as they see fit.
For a progressive like Mamdani, the forward-looking policy solution is to embrace the changing nature of work, rather than cling to an outdated model in which the only way to make a living is through W-2 employment.
Kristian Fors is the Technology and Innovation Policy Analyst at Libertas Institute, Utah’s free-market think tank.