Wild West Gig Economy is an Unfriendly Job Market

“Drivers in California are owed billions of dollars in back wages,” said Dr. Veena Dubal, a professor at UC Hastings School of Law.

By Peter White

NASHVILLE, TN — Day-laborers and Uber drivers have a lot in common. Neither get sick leave or workers compensation. They don’t get health insurance or paid family leave or unemployment compensation. The work can be dangerous and lacks the legal protections for health and safety that W-2 workers get. 

What used to be called the underground or hidden economy is now in plain sight and involves one out of three American workers. It has a new name: the gig economy. 

In 2017 Roberto Moreno applied to be an Uber driver. He waited six months for them to call. He has driven for both Lyft and Uber in San Diego County, California.

“The best hours were on weekends and nights,” Moreno said. He worked Friday night from 11 pm to Monday at 4 am. He slept four hours Saturday and Sunday between shifts.

“I made $850-$1200, the same amount someone would make driving six days during the week,” Moreno said. That’s pretty good money. But it didn’t last long. 

Uber offered inexpensive car leases to drivers like Moreno. “It didn’t matter if you had one or a junker, you were offered an opportunity,” he said. 

Uber became saturated with drivers in San Diego County. “Uber and Lyft were having a turf war about the time they started their new scooter launch.”

“Who’s paying for PUA, (Pandemic Unemployment Assistance)? It’s not Uber, a billion-dollar transnational corporation. It wasn’t the driver. It’s the California taxpayers. They are paying out $400 million dollars in unemployment that neither drivers nor the corporation have paid into,” said Roberto Moreno, a rideshare driver from San Diego.

Uber jacked up its driver fees from 15% to 25% of the fare. “We, the drivers were the ones paying for that project,” Moreno said. 

“We ended up having to work more hours than we were normally accustomed to working. If you were working 60-80 hours, 15-20 hours was spent on the ap (phone application) driving around just spinning your wheels and spending your gas,” he said. 

In other words, Uber put more drivers on the road for longer hours but ended up making more money while individual drivers made less. 

And the very popular ride-share company, used its ap to cheat the drivers. “Uber said they charged $40 but the passengers told drivers like Moreno they were actually charged $55. “So we were getting 25% of $40, not $55,” Moreno said. 

And Uber started punishing drivers who refused to pick up someone 25 miles away for a five-minute ride. “All of sudden you get the worst rides,” he said. 

“You don’t get the longer rides to LAX or to Long Beach and Santa Barbara.”

The flexibility drivers like about working for rideshare companies like Uber isn’t really that flexible. “They own you,” Moreno said.

Two California courts ruled in favor of the drivers by ruling they are employees, not independent contractors. And the state legislature passed a law guaranteeing them a wage floor and overtime pay. 

Uber and Lyft fought back. They launched a $188 million referendum campaign, Proposition 22, to make an end run around state regulation of the ride-share industry. It is the most expensive ballot initiative in U.S. history, according to Dr. Veena Dubal, professor at the U.C. Hastings School of Law. 

“It’s the most dangerous labor law that I’ve seen in my lifetime,” Dubal said. “It removes time-based employment. You are not on the clock unless you are driving a fare.”

Polling on Prop 22 shows pro and con in a close race within 3% of each other. But 30% of voters are still undecided. Prop 22 proponents are flooding the airways drivers’ aps, and sending consumers emails to convince them that Prop 22 is good for workers. 

“The gig economy is primarily made up of people of color and immigrants,” Dubal said. A large percentage of Uber and Lyft drivers are Latinos but how many is hard to tell because rideshare companies don’t share their employment data.

Uber, Lyft, Doordash, Instacart, and Postmates are behind the measure. So are California Chambers of Commerce. Ted Cruz and Donald Trump have endorsed it. 

Opponents include the 20,000-member Rideshare Drivers United, Gig Workers Rising, Human Rights Watch, Joe Biden and Kamala Harris.  

If it passes drivers will be locked into lower wages and it will take a 7/8 majority of the legislature to make any changes to the new law. Dubal said any transportation company could develop an ap to deploy their workers and use the Uber model to reduce labor costs and cut the ability of workers to make a living. 

Dr. Alexandria Ravenelle, author of “Hustle and Gig”, interviewed Uber drivers, dog-walkers, Airbnb hosts, workers for food delivery services and

“It’s very much a scary Wild West out there for workers who are unemployed or underemployed during this pandemic,” said Dr. Alexandria Ravenelle, author of “Hustle and Gig.”

companies like TaskRabbit, that will send workers to clean or do other chores in your home. She said more people have taken up gig work because of the pandemic. 

“A number of workers are turning to the side hustle safety net when they experience job loss or slashing of their work hours,” Ravenelle said. She interviewed two unemployed doctors who turned to dog-walking and food delivery to make ends meet. 

“Some of these workers are turning to gig work as a occupation of last resort. They are desperate to feed their families, going to food banks and waiting in pantry lines. It’s the only way they can think of to get money to pay their landlords and feed their families,” she said.

Will there be more gig work in America’s future? 

“Unfortunately yes,” Ravenelle said. For example, university adjunct professors teach fewer classes to keep them below 30 hours per week, so they are ineligible for healthcare. She said companies will do anything to reduce their labor costs. 

“I think we’re going to see many more jobs become 1099-based, become independent contractors, with none of the protections that, quite frankly, generations of our grandparents and great grandparents fought for. This gig economy, this movement to 1099 employment, is very much a movement forward to the past.” 

“Right now we are talking about drivers but after November if Prop 22 passes, I believe we are going to be talking about teachers, nurses, welders, grocers,” Moreno said. “All of those people are going to be in the same boat as the drivers are now.”

Moreno hopes Latinos will vote against Prop 22. “We need the benefits. We don’t want to depend on public assistance while we’re working for a multibillion dollar corporation,” he said.