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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.

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