HKUST Business Review

hen she was in her 20s, Ingrid Archie was convicted of drug possession. Years later, despite having worked for her company for three years, she was laid off when a policy change barred anyone with a criminal record. Suddenly jobless and supporting a young child, she turned to theft, stealing clothes for her baby—and was promptly rearrested. Ingrid’s story is far from uncommon. In America, one in three adults has a criminal record, and the vast majority of employers require background checks. As a result, millions of people find themselves stuck in a cycle of poverty and recidivism. Fortunately, Ingrid’s story had a happy ending: While her criminal record limited her access to traditional employment after her release from prison, she was able to get a job driving for Uber. This helped her launch a new life, enabling her to break the cycle and achieve lasting stability for herself and her family. Because of their low barriers to entry and flexible work models, ride-share platforms like Uber and Lyft often end up being a lifeline for people like Ingrid, who might otherwise struggle to get a job due to their criminal pasts. However, new laws mandating background checks even for gig workers threaten to erode this vital benefit of the gig economy without necessarily even benefiting the communities these laws are meant to protect. Background Check Laws Often End Up Backfiring To be sure, background check laws, or BCLs, serve an important purpose. After all, the same accessibility that makes rideshare work attractive to people with criminal records increases the likelihood that passengers will be exposed to crime. However, our recent research suggests that many BCLs end up backfiring, unnecessarily keeping low-risk people from accessing one of the few avenues for legal work available to them. With no other options, these people end up falling back into criminal activity, ultimately increasing overall crime rates. Specifically, to explore the true impact of BCLs, we analyzed thousands of criminal reports and docket cases (formal court filings) involving rideshare drivers. We excluded cases related to vehicle accidents and labor disputes, but captured allegations ranging from theft and robbery to physical and sexual assault, unlawful restraint, and other criminal incidents directly tied to rideshare trips. We then leveraged the variation in BCLs passed in different states at different times to determine the impact of these laws on both rideshare- related incidents and crime rates more broadly. Figure 1B. The Distribution of BCLs Discussion Duration (From Introduction to Passage) Figure 1. BCL Introduction and Passage Across U.S. States Figure 1A. The Number of States That Passed New BCLs for Ride-Share Drivers Per Year 45 HKUST Business Review