Protect gig workers
The changing economy has yet to devise a fair system to treat its workers and ensure rights
Why haven’t we created a fairer system as our economy changes?
I am, as is often the case, sitting writing this column in my apartment. I could, however, be writing it anywhere: in a park, on a patio, even in the back of an Uber. That’s not a brag. It’s just the freedom the digital-enabled gig economy has helped create. People cannot only work in a variety of places, but also in a myriad of ways.
That freedom has come with serious costs, however. Gig economy workers like Uber drivers, delivery people and freelancers like me lack the protections of traditional workers: benefits, the strength of collective organizations like unions and legal recourse, just to name a few. Yes, we are “free” — but often, only in the way that a ship unmoored from a dock might be.
There are signs that troubling situation is beginning to be acknowledged. In California this week, a Superior Court judge granted an injunction to reclassify Uber and Lyft drivers as employees of the company rather than merely independent contractors. It follows a ruling by the Supreme Court of Canada in late June that cleared the way for a class-action lawsuit that asserts that Uber drivers are entitled to protections under the Ontario Employments Standards Act.
Yet all the legal details can sometimes obscure an important fact: for all its freedom, the gig economy is predicated on the exploitation of its workers.
Few things make this more clear than the fact that the day after the California ruling, Uber suggested that it would have to shut down its operations, claiming that it would need time to transition to a company with a full-time workforce.
But what is more likely is that Uber is simply not a financially viable entity if it has to give its drivers the basic protections and pay to which most employees are entitled.
Consider Uber’s finances. In its second quarter as a public company in 2019, it lost a staggering $5.2 billion. This most recent results in 2020 dropped to a mere loss of $1.8 billion. Even during the COVID-19 pandemic, where use of food delivery services has skyrocketed, Uber Eats lost $232 million.
In that sense, Uber often appears to be function more like an operation to simply absorb vast amounts of wealth from backers like Softbank and Saudi Arabia’s Public Investment Fund and less like a viable business.
Yet this money losing streak isn’t unique to Uber. Earlier this year, food delivery service Foodora quit the Canadian market, citing intense competition. But the move also followed a ruling the Ontario Labour Relations Board that allowed Foodora couriers to join unions and other labour groups. Again, when faced with the ordinary demands of giving employees basic rights, the gig economy seems to just crumble. Even the CEO of Uber appears to agree, if inadvertently. In an op-ed in the New York Times arguing that gig workers need new classifications, he stated that “our current employment system is outdated and unfair.”
What it suggests is that there is a sort of unconscious to the gig economy. Yes, it is undeniably convenient to catch a ride for less than ten bucks, have dinner show up at your door, or be able to have a side hustle like selling trinkets on Etsy. But it seems that the dark, often unseen underside of that convenience is an army of underpaid labourers who lack basic protections. Even the money itself isn’t much of a reward: a 2018 study by the Economic Policy Institute (EPI) pegged the wages of an Uber driver at around $12 (U.S.) an hour. The comment from Lawrence Mishel, a labour economist and former EPI president who authored the report: “My sense is that taxi driving used to be an occupation that provided a very modest middle-class income, and that just doesn’t seem to be the case any more.”
That about sums it up. For all the shiny appeal of the gig or sharing economy, what it amounts to is the decimation of well-paid, stable jobs.
The question is whether the financial model of companies like Uber is fundamentally broken. Often, the moneylosing nature of these businesses is seen as temporary as businesses scale up. Or, in the case of Uber, some argue that the reliance of people is itself temporary, as eventually the switch to autonomous cars and delivery robots will finally render the company profitable.
But perhaps that focus on temporariness is itself indicative that we as a society are in a transitionary period in which how we think about labour, the concept of a job, and the legal structure around those things has yet to catch up to how both digital technology and massive venture-capital-backed businesses have changed the landscape. That is: we need new legal protections for gig workers that recognize being a freelancer doesn’t mean one isn’t also entitled to basic labour rights.
Right now, as I finish this column, the sun is streaming in through the window in my bedroom, and I can basically spend my time as I choose. I value that freedom, and it’s worth preserving. But giving workers protection need not take away their right to work as they choose. It’s time to reclassify gig workers as what they are — employees — and give them the dignity and protection to keep doing what they love.