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The Gig Economy’s False Promise

Discussion in 'Pay' started by BurgerTiime, Apr 10, 2017.

  1. BurgerTiime

    BurgerTiime

    Location:
    Minneapolis
    Driving:
    Lyft
    The promises Silicon Valley makes about the gig economy can sound appealing. Its digital technology lets workers become entrepreneurs, we are told, freed from the drudgery of 9-to-5 jobs. Students, parents and others can make extra cash in their free time while pursuing their passions, maybe starting a thriving small business.

    In reality, there is no utopia at companies like Uber, Lyft, Instacart and Handy, whose workers are often manipulated into working long hours for low wages while continually chasing the next ride or task. These companies have discovered they can harness advances in software and behavioral sciences to old-fashioned worker exploitation, according to a growing body of evidence, because employees lack the basic protections of American law.

    A recent story in The Times by Noam Scheiber vividly described how Uber and other companies use tactics developed by the video game industry to keep drivers on the road when they would prefer to call it a day, raising company revenue while lowering drivers’ per-hour earnings. One Florida driver told The Times he earned less than $20,000 a year before expenses like gas and maintenance. In New York City, an Uber drivers group affiliated with the machinists union said that more than one-fifth of its members earn less than $30,000 before expenses.

    Gig economy workers tend to be poorer and are more likely to be minorities than the population at large, a survey by the Pew Research Centerfound last year. Compared with the population as a whole, almost twice as many of them earned under $30,000 a year, and 40 percent were black or Hispanic, compared with 27 percent of all American adults. Most said the money they earned from online platforms was essential or important to their families.

    Since workers for most gig economy companies are considered independent contractors, not employees, they do not qualify for basic protections like overtime pay and minimum wages. This helped Uber, which started in 2009, quickly grow to 700,000 active drivers in the United States, nearly three times the number of taxi drivers and chauffeurs in the country in 2014.


    The use of independent contractors is hardly an innovation. Traditional businesses like garment factories, construction companies and trucking have often misclassified employees as contractors to avoid offering benefits, paying payroll taxes and abiding by labor laws. What makes this different is that gig economy businesses are arguing that their use of the independent contractor model is in fact better for workers.

    Increasingly workers, and government agencies are pushing back. Seattle passed an ordinance in 2015 allowing drivers for Uber, Lyft and other ride-hailing apps to unionize. A federal judge temporarily blocked that law on Tuesday after the U.S. Chamber of Commerce and some conservative groups filed lawsuits against the city. Workers have also sued various gig economy companies to seek overtime pay, reimbursement for expenses and other damages. Lyft recently agreed to pay $27 millionto settle a class-action lawsuit brought by drivers in California.

    Legislation and lawsuits might ensure that traditional labor laws are applied to the gig economy. But a few smaller companies, like Hello Alfred, which dispatches people to do household chores, and Managed by Q, which provides office maintenance and cleaning services, are taking steps on their own, by treating workers as employees. They say that this lowers turnover and improves the quality of their services. Over time even bigger companies like Uber, many of which lose money and rely on investors to keep pouring in billions of dollars of capital, might find that it pays to treat workers better and even make some of them employees.

    But so far, experience with these companies shows that without the legal protections and ethical norms that once were widely accepted, workers will find the economy of the future an even more inhospitable place.

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    https://mobile.nytimes.com/2017/04/...-iphone-share&referer=https://t.co/INCL9PjuFf
     
    grams777 likes this.
  2. Anong

    Anong

    Location:
    Atlanta
    So let me get this straight, the PEOPLE of Seattle passed a law allowing drivers to unionize only to have a federal judge to block what they achieved? To add insult to injury, the chamber of commerce and conservative parties filed lawsuits on the PEOPLE of Seattle for passing such law?

    Here I thought the government was created by and for the people but it seems that it was created by those "other people".
     
    Last edited: Apr 10, 2017
  3. Trafficat

    Trafficat Moderator

    Location:
    Reno, NV
    What does it mean to "allow" them to unionize? Doesn't that really mean that everyone is going to be FORCED into a union if they want to drive Uber?

    Is there any law right now preventing drivers from getting together and demanding better terms? Not that I know of. The only thing stopping drivers from demanding better terms right now is the abundance of drivers willing to work for less. Isn't the union law really aimed at trying kick people out of Uber who like the flexibility in favor of those who want Uber to be a company that mandates 8 hour shifts five days a week and offers benefits? Is it not mainly intended to put an arbitrary upper limit at the number of drivers? A law to stifle competition?

    Personally, I do not feel exploited. I feel like I am working a low pay job that is enjoyable to do. I don't think Uber/Lyft are exploiting workers so much as there are simply too many people who want to do the job and the free market value of the service we offer is correspondingly low.

    Why do so many people want to do this job? Because of many reasons...

    But most importantly, many people want to do this job because there are so few opportunities that are better for most of the people who do it. And part of the reason is that many other jobs are difficult to acquire in the first place, do not offer the necessary flexibility for the lifestyle, etc. In fact, I dare say that many drivers are practically unemployable type people to begin with, which is why they do this job which is often less than minimum wage work. If you got deactivated today from all rideshare platforms, and gig work in general became illegal, what would you do? Do you think you would quickly find another job that pays better? If so, why aren't you working there now instead of doing this?

    The fundamental problem with minimum wage type laws is that they increase unemployment. If Uber was unionized everywhere, it would probably mean that most of the people who are currently drivers would become unemployed.
     
    Last edited: Apr 10, 2017
    Sgt_PaxHauler likes this.
  4. Mars Troll Number 4

    Mars Troll Number 4

    Location:
    Orlando-ish
    Driving:
    Taxi
    Well I drive a taxi and average over $150 in profit for 12 hours... which is like $12.50 an hour... that's about 50% better than the local minimum wage plus i can easily get 48-60 hours a week on the road if i really felt like it. By the way a terrible day for me is about $100 in profit, which is still a tad bit over minimum wage. All in all I do a lot better than minimum wage, pick what days i work, and can actually get enough hours...

    Way better than the three jobs i used to have.

    Most uber drivers do this part time as a second job these days. More than likely they would simply get a part time job doing something else like Walmart, or delivering pizzas.


    Most also don't last very long.


    But out here... I'd do better as a company cab driver, or even an independent cab driver than i would trying to make money ubering. Which is really bad considering i made a living ubering for over a year here...


    Of course there are outliers who are in markets that actually do well...

    But it's no surprise and no shocker given that cabs do substantially better revenue in some cities than others...

    But when i can do substantially better going on my own than signing up for a company with name recognition like uber... something is wrong here...


    For the record an independent cab driver out here can probobly get at least 1/3 to 1/2 as much business as an uber driver, charge 3-4 times as much, get way better tips, drive half the miles and have twice the revenue for half the cost...

    It's not rocket surgery figuring this out...
     
    charmer37 and grams777 like this.
  5. Trafficat

    Trafficat Moderator

    Location:
    Reno, NV
    In that case, I encourage as many Uber drivers as possible to become independent cabbies if you can do it and make a better profit!

    In my state it is not an easy task to be an independent cab driver because the cab companies are highly regulated by the state which is pretty hostile to new cab companies. My understanding is that to apply you have to prove "facts showing that the proposed operation is or will be beneficial to the traveling public", "Facts showing that the application is or will be required by the public convenience and necessity", to demonstrate that "He or she has sufficient experience or has employed persons with sufficient experience properly to manage a taxicab company" and for any vehicle you add to the fleet (possibly including the first), facts that support an "An increase in customer demand" and that chances are they won't find those facts in your favor because they are in the pockets of the taxi unions etc. You also have to map out all of your routes in advance apparently and sketch them on a map, and get all sorts of other stuff together that is extremely time consuming and costly. Meanwhile you have to pay a non-refundable fee to the state just to process the application, which is probably going to be denied.

    It was pretty surprising they even allowed Uber here at all. It only happened because Uber went to the lawmakers and therefore got around the NTA regulators. If I could become an independent cab company in my state simply by buying commercial insurance and getting a CDL, I would probably do it.
     
    Last edited: Apr 10, 2017
  6. Atom guy

    Atom guy

    Location:
    CT
    Gig economy jobs may not be great paying, but they do offer weekly money and flexible hours. Try becoming an insurance agent or real estate agent, where you earn NO money until you sell something, yet you have all the expenses (travel, business cards, advertising etc) to pay for yourself upfront. And on top of it you still have mandatory meetings, seminars, classes, state licensing to go to and pay for. Or how about selling cars where you work 50-60 hours a week, nights, weekends, holidays for a minimal base pay(well below minimum wage) + commissions. Oh and in the winter you get to spend the day shoveling snow with no chance to sell a car.
     
  7. See I swore I would never lay down the law the way my parents did to me back when I was in my late teens to early twenties. I decided I would never tell the young generation that "back in my days we had to walk to school in the snow barefoot uphill both ways!" Unfortunately what I see today in ways of the youth, the expectations alone boggle the mind, the whole thing is hard to swallow it really is.

    Now let me get one thing straight, this stuff about the "9-to-5 drudgery," that should get classified in the same trashcan as "walking to school barefoot in the snow uphill both ways" because that garbage was around in my days too and today I wonder what in the world were they even thinking they were talking about?
    9-to-5 drudgery... How would anyone know if I had a 9-to-5 job what it's like?
    Why would anyone classify all 9-to-5 jobs as drudgery?
    Did it ever occur to someone that some 9-to-5 jobs might actually be pretty cool?

    You know, it's always more work trying to get out of doing the work than work it would have been to do the work to begin with.
     
  8. Mars Troll Number 4

    Mars Troll Number 4

    Location:
    Orlando-ish
    Driving:
    Taxi
    Well... it varies out here... In orlandoish there's several levels of taxis. No one but the airport authority, code enforcement and a small number of drivers/employees really know the difference 100%.

    dBut there is a way to go independent or start up ad new company.



    0 No permits- subject to fines towing, ect every time you get caught, as well as trespassing charges...

    1 Independent operators for Orange/osceola counties, completely "legal" at most places but they don't have any side deals cut to get into the cab stands. No permits for the airport or Orlando itself however there's a lot of tourist area covered by the permits they can get. This is actually the category i'm talking about as independent driver. They operate entirely on flag downs and referrals. (no staging at the airport or Disney) They generate less in revenue than the following categories.

    2 Companies licensed for orange/Osceola county but not the City of Orlando... these companies have a dispatch number but their actual operating range is beyond convoluted to figure out.. they usually mostly work the tourist areas outside of the city. (no staging at the airport or Disney) [regulation is lax]

    3 Second rate Orlando City companies... mandated to provide dispatch coverage in the city, good dispatch service in the tourist areas, limited service outside of the city/tourist areas, limited contracts at hotels/theme parks. (no staging on Disney property) These 3 companies plus the next level can stage at the airport.
    (very tightly regulated)


    4. Mears taxi. The only company that reliably dispatches across the tri-county area... The only company allowed to sit and wait at Disney. There's actually 5 separate cab fleets with partially overlapping service area. Very few of the cars are permitted for everywhere. Less than half have airport/Orlando permits.


    A new company can pop up in level 2 and expand into Orlando and the airport if they ever get enough cars to cover the city. Mears has it's place solely at the top because they are the only company at disney and the only dispatch service that cover the entire area well.
     
    Trafficat likes this.
  9. Ya but by that time I can also buy a trailer, load up a lawn mower and a few more doodads and go cut grass for $60 an hour.
    Granted it's more physical.
     
  10. Trafficat

    Trafficat Moderator

    Location:
    Reno, NV
    For some people, a 9-to-5 job is uncool no matter what it entails. Those who wish to crush the gig economy want to force that type of job on all of us.

    You like your 9-to-5 job? 9-to-5 jobs are still out there. No reason to make Uber into a fixed shift job too.

    I'd rather "do more work" getting out of a 9-to-5 job than "do the work to begin with" because I actually value the ability to set my own hours more than some small increase in pay and benefits that accompany the switch to an employee model.
     
    Last edited: Apr 11, 2017
  11. Yeah but more than a few drivers here are completely missing the boat when it comes to proper customer interaction, in short they behave like total jerks. One thing they teach at a 9-5 is what "the customer is always right" really means. But these drivers, they have selective reading and semi-honed listening skills and could care less about those of us who have been down this road and all this and that and the other too but believe me when I tell you the piper's coming home to collect his due.
    It's not today and it won't be next week or even next month, there's a slim chance according to some experts it might come next year but what I do know for certain is that one day it's coming, most likely in your lifetime, probably more than a few times... It really doesn't matter but so much to me because I have another 20 years to go then I'll be 70 and I can retire... That's how I know these things.
    And all those drivers who took their customers for granted...
    Yeah boy.
    I've been through it, so have big motor companies, many household names and a slew of others.
    Many did not survive, some even committed suicide, others took Gigantanormous government grants.

    Don't forget the lessons of the Great Recession...
    Or you'll be doomed to repeat the learning process.
     
    Last edited: Apr 11, 2017
  12. Mars Troll Number 4

    Mars Troll Number 4

    Location:
    Orlando-ish
    Driving:
    Taxi
    The customer is not always right... sometimes what they are asking is not possible, sometimes it's illegal... sometimes it's not safe...


    Some times they ask for things that you just can't do.

    You gotta break it to them gently and... it doesn't matter how nice you try to be...




    sometimes...

    The customer is 1000% wrong and you gotta be an D#(($D*... Or you can get in deep trouble.


    No you cannot drink that in the car...

    No i Cannot take 6 people...


    NO EXEPTIONS



    The customer is always right NOT something you should ever consier in this industry.

    Open container is a jail able offense

    Ever hear of involuntary manslaughter?
    1. Someone was killed as a result of the defendant's actions.
    2. The act either was inherently dangerous to others or done with reckless disregard for human life.
    3. The defendant knew or should have known his or her conduct was a threat to the lives of others

    All it takes is for you to overload your car or have someones child fly out of someones arms in an accident and YOUR CRIMINALLY on the hook for their DEATH!

    Automobile collisions have people die ALL the time.

    You have to not put peoples lives at risk because someone is too cheap to order a big enough car, or multiple cars. Or too lazy to have a carseat or wait for one.


    The customer is always rigdht?

    Well that is trumped by. PEOPLE ARE STUPID!

    You can't fix stupid...

    Don't let them ruin your life.
     

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