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The Gig Economy Is Changing Everything—Is America Ready?



The structure of the economy needs to adapt as a majority of Americans will make their living as independent contractors in just a few years’ time.


The days of Americans working 9-to-5, Monday through Friday, in a cradle-to-grave job are all but over. That’s not hype; it’s just the direction the economy is going.

The digital revolution is fundamentally and permanently changing the relationship between worker and employer.

The Gig Economy Is Huge—and Growing

Consider, for example, that today, already more than one-third of American workers don’t work for companies on a W-2 employee basis. Rather, they work on a project or contract basis. If this trend continues as expected, by 2027 more than half of American workers will be working in America’s gig economy.

For the sake of clarity, the gig economy is the quintessence of the free market system at work, and is a direct result of the digital revolution. Much like the railroad in the 19th century and the national highway system of the 20th, universal digital connectivity has expanded and facilitated commercial and labor transactions, as well as the sharing of all kinds and classifications of information.

The digital revolution has truly changed the world much faster and to a greater degree than any other invention coming before it.

A Revolution for Working Americans

The digital transformation of the employer–worker relationship can hardly be overstated. Individuals can now freely market their labor and services as independent contractors to companies around the world. This allows firms to hire independent contractors alongside—and often instead of—full-time workers. They’re typically paid by the job or project.

As you might imagine—or perhaps even know firsthand—gig workers may have more than one job and employer at a time. They often work remotely from their home or, in the case of the massive ride-sharing industry, from their cars. This is an enormous shift in how the economy works. It gives both employers and contractors more control and flexibility over their relationships, schedules, types of work and locations where they perform their work.

But as fantastic and liberating as the gig economy is for tens of millions of Americans and their employers, there are some downsides that must be addressed sooner than later.

Health Care Behind the Times

One of the biggest challenges for gig workers is replacing the affordable health care coverage.

Many former W-2 employees had health care coverage through their old employers. But as contract workers, many are now under-covered or have no health care insurance at all. Excessively high and rising health care costs pose a great risk to the wellbeing of workers, putting a higher burden on social services as well as being a threat to the tax base.

In fact, out of control health care costs are already a national problem. Health care and medical bills are the cause of two-thirds of bankruptcies in the country today. That will only worsen as more working people leave the W-2 employment rolls.

Broken Health Care System a Risk to Millennials, Too

Adjusting our health care coverage choices for the gig economy is not only a political problem, but an economic one as well. It’s not just older, former W-2 workers at risk of financial ruin due to high health care costs. Almost half of millennial workers participate in the gig economy as well.

The more that the younger generation becomes engaged and invested in the gig economy, the more acute the problem will become. In a few short years, low-cost, employee-sponsored health care coverage will become less the norm in the American workforce.

Failure to adapt to the new realities poses a huge risk to the country’s citizens and the overall economy.

California Trying to Kill Gig Economy

It remains to be seen, however, if some of the major gig economy employers, such as Uber and Lyft, GrubHub, UpWork, and others, offer health care insurance to their contract workers, or even if they’re legally or financially able to.

In California, for instance, a new legislation, Assembly Bill 5, has been passed to force employers to treat gig workers as fulltime employees. But it’s a disaster in the making.

Intended to protect gig workers, the new California law only endangers their livelihoods by forcing firms that use contract workers to pay for their health care and other benefits. Gig workers are against it, as are employers.

The pain is already being felt by gig workers residing in California—they’re already being shut out of work opportunities in other states because of the new law that takes effect in January of 2020.

Outdated Tax Code Punishes Gig Workers

The tax code needs to reflect the new realities of the 21st century American workforce as well. Allowing gig workers to fully deduct expenses such as gas, insurance, office equipment, internet connection fees, and other business-related costs is crucial. But under the new tax laws, deductions are capped, making it too costly and even unprofitable to be a gig worker.

The problem is that, like our health care system, many of the tax codes—even some just passed—do more harm than good. Of course, lower taxes are key to a healthy economy; but limiting the rights of contractors to deduct business expenses and mortgage interest payments isn’t the answer. It’s the same as adding more taxes and regulations to businesses. It destroys jobs and economic growth, and only adds to the social services burden.

A New Approach is Needed

But that’s not the only problem facing gig workers in the new economy. Other negatives include missing out on sick pay, Social Security contributions, life insurance, and retirement fund matching. All of these benefits typically come in most employers’ benefit packages. These are not only safety nets for workers, but for society as well.

How all of these benefit needs are resolved going forward remains an open question. But what is clear is that things can’t continue as they are now.

Just as employer-sponsored health care coverage became a part of American working life back in the 1940s in response to new economic conditions, we need a quick response to the rapidly evolving, 21st century gig economy. Low-cost health care coverage must be made available to gig workers. It makes no economic sense for Americans who added over $1 trillion to the economy in 2018 to be left out of affordable health care.

The divide between our outdated systems based on old assumptions and the new economic realities must be bridged, and fast. The legislative arena is where the right protections for gig workers and the gig economy itself must be established. It begins with having access to low group rates for health care coverage and being able to write off all business-related expenses.

Now is the time to rethink how we can structure these very critical aspects of our society and government in accordance with our rapidly evolving structural economic changes. If we don’t, the negative implications for American workers’ health and economic wellbeing are staggering.

James Gorrie is a writer and speaker based in Southern California. He is the author of “The China Crisis.”

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

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Santa Fe’s gig economy evolves | Business




Walmart has a new delivery service that it just initiated in Santa Fe: DoorDash. We tried it out and it was relatively quick, but this could be because it is a new service.

You can get anything you order within a five-hour time frame, or if you spend an extra $10, you can get it delivered within two hours.

But this also means Walmart’s pickup service, which was running well before the coronavirus pandemic, may get slower with fewer pickup parking slots.

The new delivery service also means more job openings. Speaking of jobs, I’ve seen a flood of new ads by Lyft looking for drivers in this area.

Lyft drivers hopped onto Instacart when the virus started, but I have noticed a slight increase in Lyft and Uber drivers operating again since we businesses began reopening.

I spoke to several of my friends in the tattoo community, and they are reporting their businesses are booming, with all of them booked solid through August.

They have had to make a few changes, like limiting customers entering their establishments to just the customer and the tattoo artist. Before, people getting tattooed were allowed to bring in a posse of friends for emotional support.

I have been trying out several of the restaurant patios around town, and those businesses seem to be handling the change well. Even before dine-in options were shut down last week, you wouldn’t see me inside a bar or restaurant if they didn’t have an outdoor eating option. When I enter any enclosed space, I always wear a mask and disinfect my hands before entering and upon leaving with my order.

This has been a major change because I almost lived in restaurants for most of my meals for the past 30 years, especially for live events. We don’t know when those will resume without many venues doing major overhauls of their businesses.

Another fairly new development is the switch from a cash-based system to card and digital-pay services. With a shortage of coins and cash nationwide because of the pandemic, most of my purchases are now done with cards and online ordering.

Finally, I also run the Facebook group “2020 Santa Fe Grocery & Restaurant Pandemic Updates,” and several people have asked me about tipping. While cash tips are great, several of my Instacart customers tip with things like bottled water or coffee, masks, gloves, granola bars and hand sanitizer. I have spoken to other people in the gig jobs system and we love these nontraditional tips as well.

Be safe and wear your mask correctly.

Sam Haozous is a Santa Fe gig worker working as a contractor for Instacart, TurnKey Vacation Rentals and Lyft, and he is administrator for the 2020 Santa Fe Grocery & Restaurant Pandemic Updates Facebook group.

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California Labor Commissioner Sues Gig Car Wash for Misclassifying Workers




The Labor Commissioner’s Office has filed a lawsuit against a gig-economy car wash company in Southern California for violating labor laws by misclassifying employees as independent contractors.

Mobile Wash Inc. of Bellflower misclassified at least 100 workers, harming both the workers and law-abiding businesses in the car washing industry, the lawsuit says.

This is the first lawsuit filed by the Labor Commissioner’s Office to enforce Assembly Bill 5, the 2019 law that requires the application of the “ABC test” to determine if workers in California are employees or independent contractors. Under the ABC test, a worker is considered an employee unless they are free from control from the hiring entity, perform work outside of the hiring entity’s usual business, and engage in an accepted independent trade or occupation.

“Willful misclassification of workers harms not only workers but law-abiding employers and the public,” California Labor Commissioner Lilia García-Brower said in a statement. “Under the ABC test, these workers are clearly employees and were entitled to basic labor protections. My office is committed to combatting this unlawful practice as a business model.”

Mobile Wash uses a phone app to offer car washing and detailing services to customers throughout Southern California and a few locations in Northern California.

The company requires its workers to use their own cars and buy their own uniforms, insurance, cleaning equipment, supplies and gas. Mobile Wash does not reimburse the workers for these business expenses or travel time in violation of the requirement to pay for all hours worked at no less than the minimum wage. It also unlawfully charges workers a $2 “transaction fee” for every tip left on a credit card, according to the suit.

An analysis by the Labor Commissioner’s Office found that a Mobile Wash employee working for 10 hours per day, six days a week is entitled to $1,521 per week for unpaid wages including minimum wage and overtime violation, liquidated damages, rest period violations, reimbursements of business expenses and recovery of stolen tips, and other violations including but not limited to failure to provide paid sick leave. Mobile Wash had over 100 car washers at any given time.

The lawsuit, filed in Los Angeles Superior Court, asks the court to order Mobile Wash to stop misclassifying its employees and to halt its operations using employee labor until it meets California’s car wash registration and bond requirements, as it has never been licensed with the Labor Commissioner’s Office.

The suit also seeks the recovery of unpaid wages, penalties and interest on behalf of workers going back to April of 2017 as well as civil penalties and any costs and reasonable attorneys’ fees incurred by the Labor Commissioner’s Office.


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The Gig Economy and the case of Split Identities




The gig economy is exploding these days, especially in the wake of the global virus outbreak. According to the Bureau of Labor projections, the portion of gig economy workers will increase
to 43%
 in 2020. Among millennials, 40% have identified as participating in the gig economy.

Gig economy means transitory jobs. Rideshare drivers, work-from-home graphic designers, temporary customer service agents.  While most are part-time jobs, they are quite stable while they last. In times of economic crisis, some gig economy jobs may disappear
altogether, and some – such as delivery services in the current crisis – see a huge uplift in demand.

The surge in a freelancer economy has left many organizations that provide these services struggling with a new phenomenon: their freelancers are sharing their digital account with someone else. Why is this happening now more than ever? Due to the current
economic climate, people are anxious to earn more income. Their digital identity is suddenly quite valuable as they have been verified and vetted and allowed to engage in whatever service the gig economy company is allowing them to do. But as 24/7 work is
impossible, the notion of sharing their account with family, friends or other interested parties to continue generating income in an economic downturn is appealing, and a very real phenomenon happening today.

This makes a lot of sense from an individual perspective. These are difficult times, and the extra income shouldn’t be anybody’s business. However, taken from the larger perspective of society, this creates a major trust and safety issue. Think about your
favorite ridesharing app: You order a ride, step into the car, and find a completely different driver behind the wheel.

Or think about a call center service that operates on behalf of Fortune 500 companies. Lockdowns mean that most customer service agents are now working from home. Who can say whether an agent who punched in 12 hours per day is really working two shifts,
or just shared her account with a friend?  A friend who is not properly trained, has not signed an NDA, and not authorized to have access to your private data?

Or consider a high-ranking web developer who provides online services as a freelancer, earning top dollar for projects. As a way to generate additional income, he “rents” his identity to unvetted freelancers so they can enjoy access to top paying jobs, and
he gets a commission in exchange. You’re paying premium dollars for work that, in fact, isn’t done by the top ranked freelancer at all.

Trust is a key component in work-from-home environments, and when identity controls are broken, you can trust no one.

When digital accounts are misused and shared, there are far reaching implications. Lack of accountability. Lack of attribution. Impact on reputation when foul play is discovered. And, quite often, trust and safety concerns.

Devices Can’t Be Trusted

The verdict on passwords as a way to authenticate a digital identity has been decided ages ago: absolutely untrustworthy. Which is why in the last two decades, online and mobile applications found a great way to handle digital identities: the idea of the
Trusted Device. The premise of “something you have” became synonymous with digital identity. If you come from a device that has been seen before in your account, it must be you. Furthermore, once you verify your device via a one-time passcode, it becomes a
trusted device. A token of your identity. As long as you log in from your “trusted” device, it’s got to be you.

The reality is that this is no longer true.  Quite far from it, actually. Cybercriminals have found so many ways to bypass device checks that it is scary to even list all of them here. And that’s only half of the problem: People now use multiple devices
with the average household owning 11 connected devices. The fact you come from a new device does not
mean it’s not you.

So traditional ‘what you know’ and ‘what you have’ are not really reliable measures to help gig economy companies control their identities. How about biometrics?

Selfies and Fingerprints to the Rescue?

Selfies and fingerprints are becoming mainstream authenticators. But when you think about it, if your device recognizes you based on a fingerprint or face recognition, it’s basically proof that the device knows you, but not proof that you are who you claim
you are. Unless the face image or fingerprint are matched against a central database or a separate document that can be independently validated, all they really mean is that the device recognizes the person who has set it up.

Moreover, fingerprint and face biometrics are even less effective in addressing the gig economy identity split problem because you can easily add more fingerprints to your iPhone or Android device – after all, they were originally designed as a convenience
factor. So if you want your iPhone to be unlocked by your spouse and kids, knock yourself out. It’s wide open. The same goes for face recognition – you can add a second face that your device would recognize as legit, which is especially useful nowadays when
people walk around with face masks. So no, if someone is willingly sharing their account with a friend or family member in order to boost their freelancer profits, device-based biometrics are the least of their problems.

Clandestine Biometrics

What if the biometric analysis is done behind the scenes, though?

Several types of passive biometrics have been developed and perfected over the course of the last few years. In a call center environment, it is now possible to continuously record and match the agent’s voice against their historic profile. If an anomaly
is found, it can be investigated.

In web and mobile applications, behavioral biometrics is the new queen. Behavioral biometrics silently monitors the user interaction – mouse motions, typing patterns, cognitive choices and navigational preferences. Behavioral biometrics is not designed to
replace a password; in fact, it’s actually interesting to see how one types their password. But it does provide continuous monitoring and can point to anomalies in user behavior. It’s also less intrusive than matching fingerprints and faces, because those
can actually trace a person and – if stored in a central reposiroty – can be compromised and traded, while behavioral biometrics are more statistical in nature and used to verify that the behavior in the account matches past behaviors and no foul play is spotted;
it was never designed as a way to trace a specific individual and can’t be used as an identifier.

Account sharing is one of the things behavioral biometrics can highlight. Banks already found out it’s the only way to really know about, say, users of corporate online banking services who share their credentials with coworkers. Which, from a bank’s perspective,
creates a serious breach of confidence as their actions cannot be attributed to a single, personally accountable identity.

Back to the gig economy. So what’s wrong with someone trying to make a few extra bucks by sharing their work from home account with friends and family? For the worker, it is seemingly harmless and not done with bad intentions. However, for the organizations
that operate gig services this is an opening to incredible risk. When a digital identity is split, they lose all means of control. There is no way to really know who is providing the service, whether they have been vetted, or maybe even disqualified for some
reason and came back under a different identity of someone who was willing to share the account with them.

Identity is extremely important, and splitting it through account sharing creates significant risk. It’s time for gig economy businesses to re-think digital identity and models for building trust and safety.


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