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INSIGHT: Gig Economy Workers Deserve Better Protections

Aug. 21, 2020, 8:00 AM

Finally, against the wishes of the corporate executives and their armies of lawyers, lobbyists, and political insiders, the exploitation of workers in the gig economy—disproportionately workers of color—is being brought to reckoning.

Uber and Lyft were ordered Aug. 10 to treat their California drivers as employees rather than contractors. The San Francisco Superior Court found that the companies are likely violating California’s Assembly Bill 5, a landmark law that clarifies and expands worker protections in the state.

The companies have since threatened to suspend their California operations and asked an appeals court to delay the order becoming effective. The court did so Aug. 20. Meanwhile, on the other side of the country, the attorney general of Massachusetts announced it is suing Uber and Lyft for depriving their drivers of their rights under state law.

The tides are turning. It is increasingly difficult to ignore the millions of workers in the app-based economy deprived of basic labor protections that many of us take for granted—such as minimum wage, overtime pay, workers’ compensation, unemployment and state disability insurance—because their employers insist on illegally misclassifying them as “independent contractors.”

Without these bedrock protections, app-based workers, 72% of whom work full time, struggle to cobble together a stable living while dealing with often unsafe working conditions in underpaid jobs.

These are unfair conditions to expect of any person, yet it is disproportionately workers of color, facing racist barriers to quality jobs, who must accept the dangerous, exploitative, and insecure terms of app-based work. Combined, Black and Latino workers make up less than 29% of the total workforce, but almost 42% of workers on apps like Uber, Lyft, Instacart, and Doordash.

A Deceptive Business Model

Deceptive companies have used every trick in the book to set up this business model: pressuring workers with take-it-or-leave-it contracts, lobbying legislators to rewrite the laws, funding PACs to unseat politicians who advocate for labor rights, and deliberately misinforming their own workers.

In 2018, Uber’s chief political strategist Bradley Tusk said the quiet part loud: “What is ultimately a better business decision? To try to change the law in a way that you think works for your platform, or to make sure your platform fits into the existing law?”

Now, desperate to defend against overdue accountability, they’re trying a new trick: permitting some protections for their workers, while denying them their full rights as employees.

On the same day that his company was ordered to reclassify its drivers in California, Uber’s Chief Executive Dara Khosrowshahi wrote in the New York Times, calling for a “third way” solution: Rather than treat their workers as employees, gig companies should pay into a “benefits fund” from which workers can withdraw cash for benefits like health insurance and paid time off.

The proposal is similar, though not identical, to California Proposition 22, a ballot initiative funded by Uber and other corporations that would foreclose the benefits of employee rights for app-based workers.

The suggestion is obvious: Uber intends to push for state laws that cut off app-based workers’ access to our labor and employment laws in exchange for whatever scraps of protection their employers agree to dole out to them.

A “third way” for app-based workers is misleading because the companies have for so long denied their workers the legal rights to which they already are entitled as employees. This proposal would be a boon for billionaire CEOs and investors, and yet another attempt to suppress misclassified workers’ demands to be treated fairly.

By unilaterally providing substandard protections, these corporations seek to escape, once and for all, the legal responsibilities they’ve avoided all along.

Worker ‘Flexibility’ Is Carefully Managed

What’s the upside for the workers? Khosrowshahi cites that app-based workers get to keep the “flexibility” and “total freedom” they enjoy as independent contractors. But that so-called “flexibility” vanishes upon further inspection.

Companies like Uber use a host of behavioral tricks to shape and carefully manage their workers’ schedules, availability, and activities. Uber has hired teams of social and data scientists with one objective: controlling driver behavior. The company has used “video game techniques, graphics and noncash rewards of little value that can prod drivers into working longer and harder.”

It uses earnings reminders to keep drivers on the road and an algorithm to pre-load drivers’ next fare, not dissimilar to Netflix’s auto-play feature that induces binge-watching. Whatever flexibility app-based workers may have on paper, that flexibility is monitored, supervised, and carefully managed by behavioral nudges that allow the companies to control their workforce.

“Flexibility,” as a legal matter, has nothing to do with the benefits of employee status. The specter of removing workers’ flexibility is yet another threat by powerful companies that, if they are held accountable to the public, they will take it out on their workers. That’s a serious risk—one that workers can challenge by building their own collective power, not relying on the empty promises of their employer.

Work should provide people with a fair living wage, economic stability, and security from unsafe workplaces. But app-based companies have tried to rewrite the social contract, engaging in illegal practices familiar to bad employers everywhere and ducking under the cover of “flexible work.”

Half measures like a “third way” will only further destabilize workers whose insecurity has been magnified by Covid-19. The app-based companies created the precarity and financial instability of their workers; now they pretend they’re acting for the benefit of these same workers. That’s not innovation. It’s desperation.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Brian Chen is a staff attorney with the National Employment Law Project.

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