This Is How Bad the Sharing Economy Is for Workers

Silicon Valley entrepreneurs keep telling us their way of doing business will “change the world.” And in many ways it already has, but it’s changed your world differently than it’s changed theirs.

The “sharing” or “gig” economy—think Airbnb, Uber, and Taskrabbit—has made massive fortunes reducing labor to disassembled microtasks; unfortunately, it’s shrunk workers’ rights too. But as our jobs are redefined by labor-brokering platforms, some advocates are trying to redefine labor rights for a digital economy.

Currently, the gig economy trades labor fluidly across online platforms, digital hiring halls where workers typically farm out their short-term gofer services: a ride offered through your private car, fishing someone’s keys out of a gutter, hand-delivering a package across town. For these nominally independent contractors, labor protections under the Fair Labor Standards Act generally don’t apply. Yet these contract jobs are at least as hierarchical as an assembly line; “independence” means you get assigned where to drive but pay your own traffic tickets, you fund your own social insurance, and if you’re sexually harassed or hurt on the job, may be left completely on your own.

That’s why the National Employment Law Project (NELP) has come up with a new policy blueprint, focused on regulating the so-called “on-demand economy” of tech-driven gig employment, to put forward concrete policy models that can help restructure the “1099” contractor relationship to offer workers greater protection. One potential model is the statutory employee framework, under which contractors are for certain regulatory purposes considered workers, generally for tax laws. NELP notes that local and state policymakers can expand this structure to provide “portable” benefits by “directly requir[ing] that companies that use IRS-Form-1099 workers abide by labor standards such as the minimum wage and others, and pay into Social Security and state workers’ compensation and unemployment insurance funds.”

Many gig workers aren’t really thinking about retirement yet; they’re struggling to get paid today.

At the media conference announcing NELP’s report, Takele Gobena of Seattle said he used to make $9.40 at the SeaTac airport complex, but sought more entrepreneurial pastures driving for Uber and Lyft while studying and raising a young family. Then came the car expenses and other requisite investments needed for ride-sharing, plus the 15-hour shifts his “flexible” job platform demanded—which left him earning the equivalent of less than $3 an hour.

“We are not earning a living wage, we don’t have job security even though we bought a car to work for them,” Gobena said. The pressure intensified after he spoke out publicly about his labor conditions to the media, he claims. Although Uber has denied any misconduct, Gobena argued, “When drivers speak about their driving experience [and] working conditions for Uber and Lyft, they automatically investigate” drivers to try to penalize them. “I want that to be changed so that drivers like me and many others can have fair treatment.”

What if these “on demand” workers could make demands of their parent companies? In addition to policy changes, NELP says establishing an avenue for contractors to organize and collectively bargain on labor conditions might empower workers to respond directly to ever-changing market and labor conditions. This provides a platform for labor action that doesn’t rely on bureaucracy to catch up with Uber and Lyft, and it may hit the industry in its Achilles’ heel: publicity. These companies have managed to wrangle local governments into bending regulatory rules to fit the gig business model, but face a rougher challenge shielding their brand image from public criticism from disillusioned drivers like Gobena.

One potential model is Seattle’s plan to just provide rideshare workers the legal right to collectively bargain. This complements the ongoing Teamsters-led campaign to organize drivers under the App-based Drivers Association.

Organizing could in fact be an ideal countervailing force against gigification, if a collective-bargaining unit were able to—like their parent company—expand freely across states and sectors. For example, the home-office analogue to ridesharing, the so-called crowdwork industry, has created a vast global network of telecommuting clerical jobbers; the leading companies, Crowdflower, Crowdsource, and Amazon’s Mechanical Turk, collectively manage the services of more than 13 million workers worldwide. Although no full-fledged labor organization has crystallized from this workforce yet, some recent labor litigation has sought to bring claims on behalf of a broad class of workers.

Regulatory reforms could provide immediate relief for exploited workers while the legal system works through numerous labor cases charging on-demand service companies with abusing independent contractors. According to NELP Deputy Director Rebecca Smith, in those cases, “Courts may well deem them employers, but in the interim, we can adopt policies that bind them in these contexts.”

New legislation in Maryland will give the state’s Public Service Commission authority to regulate so-called “Transportation Network Services,” with a governing body representing drivers, the riding public, and business, to develop regulatory standards and negotiate corporate obligations like taxes, insurance, and fair business practices. The commission would also run a dispute mediation system for drivers, and even authorize the creation of a taxi-worker co-operative.

The two forces pushing back against gigification, labor action from below and regulation from above, might collide in the next great Uber turf war in New York. Across this city—both a union town and a financial capital—an Uber traffic flood has run into a mass opposition campaign led by militant taxi drivers and community groups. Uber has deftly resisted regulatory pressures from local officials and the Taxi and Limousine Commission over taxes and other car-service industry standards. But rising street-level activism against Uber’s corporate heavy-handedness and tax dodging might help curb its breakneck expansion.

Rocio Valerio of New York Communities for Change, a grassroots group campaigning for drivers and the riding public, says via email that NELP’s analysis helps activists break down “how the ‘sharing economy’ is wiping away baseline labor standards that took workers decades to win. From misclassification of workers to meager wages below the minimum wage, the ‘gig economy’ is getting away with murder, and it needs to stop.”

So far, traditional regulations haven’t effectively checked the rise of gigdom. But if the wave of tech-fueled disruption can’t be stopped, the public can erect enough speed bumps to ensure that the kings of the sharing economy must share the consequences of their disruption, too.

NetJets Pilots Ask for Better Pay for Flying Millionaires

Despite the inch of rain dumped on the city, last Thursday was a busy day in private aviation for New York. Vice President Joe Biden touched down in Air Force Two a stone’s throw away from Donald Trump’s jet, and just across the river, at Teterboro Airport in New Jersey, 85 NetJets pilots walked in circles for three hours as part of a nationwide picket.

At six other airports—Columbus, Dallas, Scottsdale, Seattle-Tacoma, Van Nuys, and Palm Beach International—700 of their colleagues did the same. The pilots, who all work for the fractional jet-ownership company, picketed as part of a more than two-year-long labor dispute. The roughly 3,000 pilots who fly for the company have been working without a contract since 2013. Their union, the NetJets Association of Shared Aircraft Pilots, and NetJets blew past their self-imposed September 3 deadline for a tentative agreement.

The bristle, of course, has been over pay and benefits. The pilots’ union said salaries are not high enough and the company’s proposed changes to benefits would put them on the hook for more health-care costs. NetJets said in a statement that on economic issues, the two sides are still a long way apart.

”Much of this difference is due to the parties’ views about the economics of this business­ . . . as well as different expectations concerning the demand for the services we provide,” the statement read. The company then noted that the pilots’ interests have to be balanced with the commitments to other staff members and stakeholders. NetJets is a subsidiary of Warren Buffett’s Berkshire Hathaway.

Captain Brian Ward, who’s been a NetJets pilot since 2002, joined the group picketing in Seattle. He’s based out of Denver, flying the eight-seat, midsize Cessna Citation X jet, working the same 14-hour days every other pilot is capped at. Like most NetJets pilots, he works seven days on, seven days off, maxing out at 98 hours on the job during the “on” weeks.

Unlike most commercial-airline pilots, Ward said, NetJets pilots have a whole other set of jobs to worry about, since the smaller private planes typically don’t have a crew. They also land in small, private-use airports that don’t always have ground support. That means NetJets pilots are not only in charge of flying passengers safely to and from a destination, but they’re also loading luggage, working with catering, making sure the plane is fueled and serviced once they land, and complying with client requests for pets to be taken care of and blankets arranged in a certain way. Add to that the fact that since NetJets customers often fly to small or private-use airports in small towns for businesses or remote resorts and vacation homes, pilots are constantly flying routes and landing at airports they’ve never flown to or landed at before. And since customers can book and change flights at the last minutes, Ward said pilots rarely know where they’re going, when they’re going, and how many places they’ll be going until right before they’re actually taking off.

“It’s a very high level of service and we’re trying to provide that experience, and because we don’t have support personnel, that work comes from the pilot. That’s stuff normal pilots wouldn’t be doing,” he said.

Yet Ward, who’s been involved with the union for years, and other union members feel like they’re not being fairly compensated for all of the extra responsibilities, which has been a huge sticking point in the contract negotiations. Ward said he makes a base salary of $132,000, though on average, makes an additional 10 percent of that in overtime and holiday pay.

Ward has been at the company for 13 years, and falls into the captain salary band. Those starting at the company, in the first-officer level, take home $57,000 in their first year, according to the union. NetJets did not respond to requests for information on pay.

The union said NetJets pilots are paid 60 percent of what commercial pilots are paid, though the company told The Wall Street Journal its pilots are some of the “best paid in the industry,” in January. At Berkshire Hathaway’s annual meeting in May, Buffett said NetJets pilots make an average of $145,000 per year, according to The New York Times.

The negotiation comes down to more than just pay. A major hold-up has been proposed changes to health-care coverage. NetJets told the Journal that its proposal called for a “few reasonable changes,” including “a modified health-care plan that will require union employees to contribute to premiums that they currently don’t pay.”

But those changes, however reasonable, are putting pressure on pilots like Captain Coley George, who drove five hours from Providence, Rhode Island, with a few other pilots on his week off to picket in Teterboro last week. He has been a captain with NetJets for 14 years and is also the union’s vice president of Industry Affairs. For the last two, the worry about whether his health-care costs will change, and by how much, has seeped into the home he shares with his wife and two children.

“Not knowing what my costs are going to be, you bring uncertainty into the household,” he said. “You start to think about whether [you’ll] be cutting back on your kids’ activities, putting away for college or retirement. That’s why I picketed.”

Last week’s show at airports weren’t the first. In fact, hundreds of members turned up at Berkshire Hathaway’s annual meeting earlier this year. Before that, they picketed at the Masters Golf Tournament, the Super Bowl, and the NetJets Poker Invitational in Las Vegas, which was hosted by Buffett.

This is not a showing NetJets customers, who are typically wealthy clients looking to avoid the hassles and security headaches that go along with commercial air travel, would want to keep seeing out of their private-plane window for the unforeseeable future. One NetJets client, who did not want his name printed, said that the last thing he wants to know is that his pilot is unhappy.

Perhaps that is why NetJets continues to state its eagerness to come to a resolution. Its statement said they will again meet with the union once their mediator directs them to, and reiterated that the pilots are the “best at what [they] do” and they’re “proud to call them colleagues.”

Captain Ward doesn’t always feel that appreciation. “We’re not going to accept a contract that is subpar, that doesn’t adequately reflect our work and experience,” he said. He understands that seeing a picket line full of pilots may be disconcerting, but he hopes that will knead NetJets closer to a deal. No need to worry, however, since he said pilots are very good at compartmentalizing and trained to put emotions aside, and NetJets pilots are deeply committed to operating safely even in the midst of negotiations.

So sit back, kick your feet up on those specially arranged blankets, and enjoy the view of a hundred soaking-wet pilots earning all year what you paid in landscaping for the summer. You’ll arrive safely at your destination in just a few short hours.

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