As society relies on gig workers, will they see a boost in stature?

Why We Wrote This

The pandemic has prompted some soul-searching about how society treats people who deliver our essentials at the push of a smartphone button. It is also prompting new assertiveness by many of the gig workers themselves.

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A smartphone mounted in a vehicle displays the app for food delivery service DoorDash. The coronavirus pandemic has led to a surge in consumers turning to apps for food and grocery deliveries.

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The U.S. unemployment rate fell in June to 11.1%, amid a gradual reopening of the economy. Yet in a sign that the pandemic is far from over, Wednesday saw over 50,000 new COVID-19 cases reported nationwide, a new high. 

So-called gig economy workers are among the most affected by 2020’s challenges. The current pandemic has prompted many Americans to rely heavily on app-based platforms for things like grocery delivery. At the same time, other workers in the gig economy are among the most deeply hit by job losses.

That very juxtaposition – the burdened Instacart shoppers and the sidelined Uber drivers – could create a moment ripe for reassessing the rules underlying the gig economy. 

Several trends may already be pointing in gig workers’ favor. They are more organized than ever. Legislation or legal actions have begun to make it harder for companies to treat their workers as disposable. And some new digital platforms are emerging that give workers a bigger share in profits and decision-making. 

“We just want to be heard and acknowledged and appreciated,” says worker Sharon Goen in Las Vegas. “We are the face of Instacart.”

As more than 17 million American workers are out of a job, Sharon Goen, a former hospitality worker in Las Vegas, is having the opposite experience.

“I work six gigs,” she says.

These include delivering meals for Grubhub, moving parcels for Amazon Flex and Shipt, picking up groceries for Instacart, and, before the COVID-19 pandemic arrived, pouring drinks for Tend. 

And yet despite all the options for work that populate her smartphone screen, Ms. Goen like many gig workers is still feeling squeezed financially.

“We’re not making a living wage,” she says of gig workers. “With the pandemic, the pay is just lower and lower and lower.”

Editor’s note: As a public service, all our coronavirus coverage is free. No paywall.

The coronavirus economy isn’t providing any easy answers. Yes, a gradual reopening from lockdowns has partially reversed this spring’s historic spike in joblessness. But even as the Labor Department reports that the U.S. unemployment rate fell to 11.1% in June, many places including Ms. Goen’s home state of Nevada are seeing COVID-19 caseloads rise. On Wednesday, over 50,000 new cases were reported nationwide, the highest since the pandemic began. 

Despite the widespread slogan “we are all in this together,” the coronavirus has widened many class fissures. It has also prompted some soul-searching about how our society treats the gig workers who bag our groceries and deliver our essentials, often with no sick pay, protective gear, or job security.

As one Instacart customer put it on Twitter, at the very least it may be time to tip generously, given “the risks they’re taking to bring you food.”

Even as socially distanced lifestyles prompt Americans to rely heavily on some app-based platforms, many others in the contingent workforce are now jobless. That very juxtaposition – the burdened Instacart shoppers and the sidelined Uber drivers – could create a moment ripe for reassessing the rules underlying the gig economy. 

Several trends may already be pointing in this direction. Gig workers are more organized than ever. New laws are being drafted that make it harder for companies to treat their workers as disposable. And new digital platforms are emerging that give workers a bigger share in profits and decision-making. 

“In moments of great upheaval, things that seem unimaginable suddenly become commonsense,” says Trebor Scholz, an activist scholar at The New School who studies the digital economy.

Forming a movement

Ms. Goen herself epitomizes one of the labor market trends – growing collective action by workers themselves. A year ago, along with 10 other women around the United States who work for Instacart, Ms. Goen founded the Gig Workers Collective to advocate for stronger worker rights and protections. Now the GWC boasts 17,000 members nationwide. 

Instacart is perhaps the most iconic gig platform of the coronavirus era. The app works by connecting customers with “shoppers,” that is, gig workers who go to supermarkets to buy groceries on their behalf in exchange for a fee and, usually, a tip. The platform experienced a massive surge amid the coronavirus outbreak, hiring some 300,000 shoppers between mid-March and mid-April. 

Courtesy of Sharon Goen
Sharon Goen, a former worker in the hospitality industry, makes an Instacart delivery in Las Vegas on April 16, 2020. She says that her earnings with Instacart have declined by 60% to 70% over the past three years.

For the workers, one particular sore spot is the default tip setting. Instacart sets it to just 5% for first-time customers (it subsequently defaults to your last tip; if you tipped below 5%, it resets to 5%). Ms. Goen, a former Las Vegas bartender, is well aware of the psychology of tipping. She knows that the default setting plays a huge role in how customers will behave. “For Instacart to ... leave it at 5% is just crushing.”

On March 30, in response to its members’ concerns over low tips, no sick pay, and the lack of protective equipment, the GWC organized a nationwide walk-off, an action that drew national media attention. To protect workers from retaliation, the GWC doesn’t keep track of how many people participated.

Instacart said the work stoppage had “absolutely no impact” on its operations, but the company did begin offering more resources, including reusable face masks and hand sanitizer. Earlier, the company offered 14 days of sick pay for shoppers diagnosed with COVID-19.

“As part of our unwavering commitment to prioritize the health and safety of the entire Instacart community,” read a statement from the company, “we’re working closely with the CDC, public health officials and retail partners to make sure we’re taking the appropriate precautionary measures to keep our shopper community and customers safe.”

But according to a report by CNET, Instacart shoppers have faced steep bureaucratic hurdles getting their sick pay approved. As of May 20, just one worker is known to have been approved for sick pay.

“There is absolutely zero transparency,’ says Ms. Goen. “Every time we have a strike action, they would act like they are giving us something, and [then] they would take it away.”

Still, Ms. Goen remains hopeful that actions by the GWC will bear fruit.

“We just want to be heard and acknowledged and appreciated,” she says. “We are the face of Instacart.”

Past work stoppages by gig workers have also shown results. The Uber and Lyft strikes of 2019, for instance, resulted in higher wages and improved working conditions for some drivers. 

These actions are occurring in a larger context of labor flexing its strength. The past two years have seen remarkably forceful worker revolts, from teachers protesting benefit cuts to tech workers walking out over law enforcement and military contracts. Indeed, the 2018-19 government shutdown finally came to a halt thanks to the efforts of a handful of air traffic controllers.

Legislation and legal battles 

A parallel trend: Lawmakers and judges are increasingly influencing the gig landscape, in some cases affirming the idea that contractor status doesn’t offer enough protections for gig workers. 

Instacart found itself under pressure on this front, too. Early in June, as part of an agreement with the attorney general of Washington, D.C., the company agreed to offer its workers paid sick leave nationwide.

In another important case, the 9th U.S. Circuit Court of Appeals ruled that the National Labor Relations Act does not prevent a state from adopting its own collective bargaining law, one that includes provisions for independent contractors.

Last September, meanwhile, California passed Assembly Bill 5, a law that classifies app-based gig workers as employees, entitled to minimum wage guarantees and other basic protections. 

The law codifies the so-called ABC test, which sets three criteria to determine whether a worker ought to be classified as a contractor or an employee. According to this standard, a worker is a contractor if (a) “the individual is free from direction and control,” (b) “the service is performed outside the usual course of business of the employer,” and (c) the “individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”

This law was tested in May at the California Supreme Court, with the state prevailing against Lyft and Uber. 

“A huge landmark deal,” says Brian Chen, an attorney at the National Employment Law Project. “Other states are going to look at that, and hopefully these state laws will be a model for the federal government eventually.”

In January, New York Gov. Andrew Cuomo hinted that his state would be pursuing a law similar to AB 5. Speaking in his State of the State address, Mr. Cuomo said, “A driver is not an independent contractor simply because she drives her own car on the job. A newspaper carrier is not an independent contractor because they ride their own bicycle. A domestic worker is not an independent contractor because she brings her own broom and mop to the job. It is exploitive, abusive, ... and it has to stop here and now.”

Mr. Chen describes the battle over worker classification as a first step, not an end goal. “That fight really is to set a floor,” he says. “Strong employment laws are a precondition for workers building power.”

Rise of the co-op platform

In addition to what’s happening in the realms of labor activism, legislation, and the courts, some experts see another trend that could help reshape gig work: the rise of new, worker-friendly structures for digital-platform businesses.

Platform co-ops are worker-owned entities that rely on shared ownership and democratic decision-making. These include Up & Go, a cooperatively owned housecleaning platform in New York City, Stocksy United, a stock-photo platform based in Victoria, British Columbia, that’s owned by nearly 1,000 photographers, and Green Taxi Cooperative, an 800-person enterprise that has made significant inroads into Denver’s ride-hailing market.

The concept of platform cooperativism was introduced in 2014 by The New School’s Dr. Scholz, who was researching the digital economy. 

“I don’t think I’ve met anyone who does not think this is a good idea,” he says. “It’s a question of do you want cosmetic change or do you want structural change?” 

Owned by the workers, who guide their businesses democratically, platform co-ops typically take a much smaller cut for overhead costs than do their Silicon Valley counterparts. For instance, the housecleaning and handyman platform Handy says that it takes about 20% from each transaction; Up & Go takes just 5%.

Dr. Scholz sits on the board of a co-op called Fairbnb.coop, an Airbnb alternative that sends half the booking fees from short-term rentals to projects that promote social welfare in the host communities. 

“It’s not about destroying Uber or about destroying Airbnb,” says Dr. Scholz of platform co-ops. “They can coexist with corporations.” But, he says, “it shows you that it can be different.”

Shifts in public opinion

Even before the pandemic struck, public attitudes about digital gig work – and Silicon Valley more generally – were beginning to sour. When apps like Uber gained popularity in the aftermath of the 2008 financial crash, they were seen as an opportunity for workers to make money via their smartphone apps while setting their own schedule. 

But by 2018, workers were reporting feeling squeezed. A study that year by JPMorgan Chase found that for Uber and Lyft drivers, monthly earnings fell from $1,469 in 2013 to $783 in 2017, a decline of 53%. Also that year, a study by the Federal Reserve found that 58% of full-time gig workers said they didn’t have an emergency $400 on hand, compared with 38% of those who didn’t work in the gig economy.

Ms. Goen’s experience reflects this downward pressure on pay. She says that her earnings with Instacart have declined by 60% to 70% over the past three years.

Instacart shoppers can make as little as $7 for a grocery run, but Ms. Goen doesn’t accept every run that pops up on her phone. “It’s 110 degrees in Vegas. I’m not starting my car for less than $20,” she says.

“Gig workers have been free falling,” she says. “It’s time for some laws to be put in place.”

The shift in attitudes is perhaps best illustrated by Governor Cuomo’s change of heart. Less than three years before calling the gig economy a “scam” and a “fraud,” he vigorously defended Uber against attempts by New York City Mayor Bill de Blasio to regulate it.

“Uber is one of these great inventions, startups, of this new economy,” Mr. Cuomo said in July 2015. “It’s offering a great service for people, and it’s giving people jobs. I don’t think the government should be in the business of trying to restrict job growth.”

Mr. Chen says the mood in 2020 is very different. 

“This is a moment when the companies’ ideological spin is starting to run out,” he says. “The bloom is off the rose.”

Editor’s note: This story has been updated to clarify Trebor Scholz's role at The New School. He is an activist scholar. As a public service, all our coronavirus coverage is free. No paywall.

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