Friday, January 30, 2015

"App-enabled workers don’t fit neatly into a regulatory landscape that recognizes only two types of worker: employees in traditional work relationships and independent contractors. Employees are generally covered by protections such as minimum-wage and antidiscrimination statutes, workers’ compensation, and union-organizing rights, while the latter have no such protections. Employers in many situations favor the contractor model since it frees them from certain tax obligations and legal liabilities. [...]

"One suit in federal court in San Francisco could bring changes to the way companies pay on-demand workers. CrowdFlower Inc., a startup that breaks down digital jobs, such as data entry, into tiny tasks performed by millions of workers, has been winding down a class-action suit alleging that the company violated minimum-wage laws.

"The nearly 20,000 workers in the suit say they should have been classified as CrowdFlower employees, and not contractors, citing the company’s work assignments, minute instructions as to how they should do their work and work-monitoring algorithms. CrowdFlower’s co-founder, according to the suit, said in a video interview that the firm sometimes paid workers $2 to $3 an hour, rather than the federal minimum wage of $7.25, or paid workers in points for various online reward programs and videogame credits. [...]

"About 34% of the labor force, or 53 million Americans, work in some form of contingent arrangement, according to a 2014 report written by the Freelancers Union and Elance-oDesk Inc., an online marketplace for freelance work.

"Kristy Milland of Toronto says odd jobs on the Mechanical Turk platform, like checking the accuracy of a software program’s search results, help her support her family, but calls her experience with the site 'a conundrum.'

"She is a leader of the online forum, which gives Mechanical Turk laborers a place to air complaints and connect; a similar forum,, does the same for Uber’s drivers.
'At the same time that I’m using it to make a living, I’m fighting against it,' she says. 'It’s not paying fairly and it’s taking advantage of people in a situation where labor laws don’t apply.' [...]

"According to a new study commissioned by Uber, drivers earn an average of $19 per hour before expenses. The majority are 'very satisfied with the platform, they have complete control over when they work, and they’re very satisfied with the income opportunity,' says David Plouffe, a former White House official who heads Uber’s policy and strategy team. 'We obviously are comfortable with our business model.'

“ 'In some ways it’s saving me while I search for other employment,' says an Uber driver in New Jersey who started with the service last year on a part-time basis while working in technology sales. Since losing his job recently, the man, who declined to be named since he doesn’t want Uber to cut him off, now drives for the company full-time and estimates he earns roughly $500 a week after expenses and depreciation, working 40 or more hours.

“ 'If you want to ‘Uber’ as a moonlighting thing, it’s great,' he says. But driving full-time, 'basically you’re in a service industry job making $8 to $10 per hour and getting clobbered on the depreciation of your vehicle.'

"Zirtual, which provides remote personal assistants, initially used independent contractors, but switched to an employee model after growing tired of arm’s-length relationships with contractors, says CEO Maren Kate Donovan. Now considered full employees, Zirtual assistants now stay longer with the company, and start at $11 an hour, she says.

“ 'At first people like the flexibility of being a contractor, but at the end of the day most people don’t have the luxury to bring in half a paycheck,' she says."

 "Uber drivers often complain about the low (and declining) pay and miserable conditions. S., a driver in Chicago (who, like everyone I spoke with, wanted to remain anonymous for fear of reprisals), says that full-timers put in sixty hours a week for an hourly rate that comes to $12 or $13 after expenses. He says the company is constantly scheming to cut pay. A., a driver in Los Angeles (and one of the few women in the trade), says she gets $11 to $12 an hour after expenses (daily expenses like gas, not depreciation of the car), which is around the twenty-fifth percentile of the city’s hourly earnings, though about in line with typical taxi-driver pay. That’s a sharp contrast with the $35-an-hour rate that was dangled in front of her when she signed up. A. describes Uber as 'a port in the storm,' a way to pick up some cash while, Angeleno that she is, she works on some movie and web projects. [...]

"Drivers are rated by their passengers, and if your rating isn’t high enough, the company will 'deactivate' you—which is how they say 'fire,' since you’re just another node in the app to them. J., another LA driver whose name was passed along to me by an organizer with the California App-Based Drivers Association (a project of the Teamsters Union), says passengers love to wield this power over drivers: one insisted that he run a red light or lose his five-star rating. And J. says there’s no appeal process for a bad rating or deactivation.

"You need a newish car to drive for Uber; if your car gets too old, that’s grounds for deactivation. But the company is ready to help: it’s entered into a partnership with Santander, a Spanish bank, to offer car loans to drivers, with the payments conveniently deducted from their paycheck. According to the terms posted on, a chat board for drivers, the payments work out to an interest rate of around 21 percent. They get you coming and going. [...]

"[I]n the 1990s bubble, jobs were easy to come by and real wages were rising across the board, so optimism was easily transmissible. Now, despite over five years of official recovery, the sharing economy offers some people, like cab drivers, the prospect of real wage cuts, and others, like people with a spare bedroom, a way to supplement stagnant incomes. The sharing economy is a nice way for rapacious capitalists to monetize the desperation of people in the post-crisis economy while sounding generous, and to evoke a fantasy of community in an atomized population.

"The sharing economy looks like a classically neoliberal response to neoliberalism: individualized and market-driven, it sees us all as micro-entrepreneurs fending for ourselves in a hostile world. Its publicists seek to transform the instability of the post–Great Recession economy into opportunity. Waiting for your script to sell? Drive an Uber on the weekend. Can’t afford a place to live while attending grad school? Take a two-bedroom apartment and rent one room out. You may lack health insurance, sick days and a pension plan, but you’re in control.

"As Airbnb’s Chesky said in a McKinsey & Company interview, today’s generation sees ownership as 'a burden.' People aren’t proud of their homes or cars; they’re proud of their Instagram feed. As Chesky predicts, 'in the future, people will own whatever they want responsibility for. And I think what they’re going to want responsibility for the most is their reputation, their friendships, their relationships, and the experiences they’ve had.' Affect triumphs over material lack."