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How much business do gig companies do in California? — Quartz

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A bill before the California state senate could devastate the gig economy.

The bill, known as AB5, has already passed the state assembly. It is scheduled to be heard by the senate’s Labor, Public Employment and Retirement committee on July 10. If it passes the senate—which, like the assembly, is controlled by Democrats—and is signed by Democratic governor Gavin Newsom, it will become law.

The bill makes it harder to classify workers as independent contractors by codifying an employment test from a groundbreaking 2018 California Supreme Court decision. This “ABC” test says that for a worker to be a contractor rather than an employee, they must meet three conditions: A) they must be “free from the control and direction of the hiring entity” in their work; B) must perform work outside the “usual course of the hiring entity’s business;” and C) must usually be engaged in an independent job or business of the same nature as the work they do for the hiring entity.

Under this test, it’s possible that gig economy workers who are currently classified as independent contractors—think Uber drivers and DoorDash couriers—would be considered employees. For instance, how do Uber drivers perform work outside the “usual course” of Uber’s business when Uber is in the business of providing rides?

It’s hard to overstate how big a deal this could be for the gig economy. Reclassifying contractors as employees would give those workers all the protections of traditional employment, which under US labor law are not afforded to contractors: social security, unemployment insurance, health benefits, a minimum wage, the right to form a union. It could be hugely expensive to companies, which would have to cover payroll taxes and workers compensation insurance.

Quartz worked with Second Measure, which analyzes billions of anonymized credit and debit purchases, to see how exposed certain gig economy companies are to California’s potential new law, based on the share of their US sales in the state. Second Measure pulled data on six companies: Uber, Lyft, DoorDash, Grubhub, Instacart, and Postmates. (Uber Eats is broken out separately from Uber’s rides business.)

What stands out from the data is how dependent Postmates is on California. As of May, 41% of Postmates’ US sales were attributable to California, according to Second Measure, down slightly from 46% a year ago. A Postmates spokesperson said in an email that the company is committed to working with Newsom and labor leaders on legislation that establishes “a new class of worker benefits with worker flexibility.”

DoorDash, a Postmates competitor, was similarly dependent on California a year ago, but has dramatically reduced its share of sales in the state over the past 12 months, as its business has grown throughout the US.

In ride-hailing, Lyft does a bigger share of its business in California than Uber does, with 24% of US sales in the state in May. Lyft has also slightly reduced that share over the past year (it was 26% in June 2018). It’s worth remembering, when looking at this data, that California makes up an even smaller share of Uber’s global sales, since the company operates its rides service in 63 countries. Lyft, by contrast, only operates in the US.

Davis White, Uber’s director of California public affairs, said in an email that he had nothing to share on the potential business impact of AB5, as the company has “no plans to re-classify drivers.”

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Workers pay price as gig economy avoids regulations, inquiry finds

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Despite being commissioned by the Victorian government, Ms James found the federal government was best placed to drive change, given its responsibility for the national system of workplace laws.

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She recommended the development of a code of conduct to better protect on-demand workers, the removal of barriers to collective bargaining, and a one-stop-shop support agency to help workers when disputes arise.

If the federal government would not lead, Victoria should work with other states to drive legislative changes to offer greater fairness for platform workers, she said.

While he would not comment specifically on the recommendations, state Industrial Relations Minister Tim Pallas said there was a clear need for laws to be tightened to support gig workers.

“The gig economy is relied upon by millions of consumers and workers across the country, but there are holes when it comes to industrial relations that put workers’ rights to fair pay and conditions at risk,” he said.

Previously, Mr Pallas had indicated the state could act alone to bolster protections for gig economy workers.

On-demand workers are more likely to be young, urban and male. People who speak a language other than English at home are 1.5 times more likely to be platform workers.

An estimated 40 per cent of on-demand workers surveyed as part of the inquiry were not even aware of their rates of pay.

“Platforms have been deliberate in framing their arrangements with workers,” Ms James found.

“This enables platforms to avoid the operation of close and detailed labour regulation while other businesses are carrying the costs of complying with those requirements.”

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Those pressures are becoming more acute as the economic effects of the COVID-19 pandemic tear through every aspect of society, Ms James told The Age and The Sydney Morning Herald.

“What we have is a large number of people in need of income, looking for work in a labour market which has now become even more competitive,” she said.

“So the gig economy has provided invaluable access to work for people, but also under terms and conditions that are not regulated. And so what we have is vulnerable people with very little leverage in the labour market really, with little or no capacity to have a say in what the arrangements are in place in order to access this work.”

Zaheer Qazi spent three years working for Uber and Deliveroo while he completed his degree in Melbourne. During that time he was also the national welfare officer for the Council of International Students Australia.

Mr Qazi said he had been told horror stories about international students working for food delivery sites being attacked but having little recourse to workplace support or compensation.

“People are feeling more fearful with COVID,” he said. “They can’t afford to lose work and these companies know it.”

Zaheer Qazi says "fearful" gig workers "can't afford to lose work and these companies know it".

Zaheer Qazi says “fearful” gig workers “can’t afford to lose work and these companies know it”.Credit:Joe Armao

Freelancer.com chief executive Matt Barrie said while other platforms limited the amount of pay workers received, his company “liberates workers”.

“The gig economy is not one homogenous industry with a uniform business model,” he said.

“Any legislation must be cognisant of that and should be at the federal level, not the state level.”

Airtasker chief executive Tim Fung said the gig economy comprised a number of different platform types. “The needs of workers on each of these different platforms should be prioritised when considering how best to apply a regulatory framework.”

A Deliveroo spokeswoman declined to comment. The Age and The Sydney Morning Herald also approached Uber for comment but did not receive a response before deadline.

A spokesman for Attorney-General Christian Porter said given Mr Porter had not seen the report, he could not comment on its findings or recommendations.

In January, Mr Porter said: “The evolution of the gig economy also presents challenges which the government is committed to addressing.”

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GIG Car Share Chooses the Ridecell Platform for its Expansion into Seattle | News

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SAN FRANCISCO, July 8, 2020 /PRNewswire/ — Ridecell Inc., the leading platform provider for shared mobility operators, today announced that GIG Car Share, powered by AAA Northern California, will use the Ridecell High-yield Mobility Platform for its expansion to Seattle. Gig already uses Ridecell for its other operating cities, including Sacramento and the San Francisco Bay Area. The Ridecell platform enables Gig to operate its fleet efficiently while giving members a frictionless experience, including quick reservation on the Gig app plus keyless entry and Gig free parking locator within the app. Ridecell also keeps track of cars for easy service, cleaning and return, minimizing downtime and maximizing profitability.

Gig Seattle will begin with 250 brand new Toyota Prius XLE hybrid cars that seat five comfortably and provide outstanding fuel efficiency. The Ridecell platform provides Gig with end-to-end automation, instant driver verification, payment processing, on-demand scheduling, and custom analytics. In addition, the platform tracks vehicle locations to ensure safety and speedy service when needed.

“Gig has grown to be the largest* free-floating car sharing service in the country, despite the tough times most transportation services are facing,” said Aarjav Trivedi, CEO of Ridecell. “Gig’s great customer service orientation combined with our platform, has helped the company continue to succeed where other companies have faltered. We’re proud to continue our partnership with them as they enter the Seattle market.”

Ridecell offers the world’s only end-to-end platform for all types of mobility, including car sharing, ridehailing, and short-term vehicle subscriptions. The platform is designed to create high-yield mobility businesses for greater profitability. For more information, visit www.ridecell.com

About Ridecell

Ridecell helps companies build and operate profitable mobility businesses. With the company’s High-yield Mobility™ SaaS toolkit of intelligent software, business services, and ecosystem partners, Ridecell customers maximize three key profit drivers: customer experience, fleet utilization, and operational efficiency.

Founded in 2009, today, Ridecell powers some of the most successful mobility services in cities across Europe and North America. These services include ZITY from Ferrovial and Groupe Renault, Gig Car Share from AAA Northern California, and Blu Smart EV ride sharing service.

Ridecell is headquartered in San Francisco, California, with more than 170 employees in offices across the globe.

About GIG Car Share
GIG Car Share, a service from AAA Northern California, is the largest free-floating car share in the nation.* In three years, Gig has grown to more than 65,000 members and operates more than 1,000 cars across Northern California (Oakland, Berkeley, San Francisco, Sacramento) and Seattle, Washington. The service launched in 2017 as the first venture from A3Ventures, AAA’s innovation lab based in Berkeley, Calif. Learn more at gigcarshare.com.

*Based on the size of its fleet as of 6/1/2020

Media Contact:
Jane Gideon
Tel: 415-682-9292
Email: press@ridecell.com

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Gig workers say pay decided by algorithm is unfair

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Same-day delivery has been a growing part of Target’s business during the pandemic. But Target employees don’t do most of the work picking up merchandise from stores and delivering it to customers’ homes. Instead, it’s mostly handled by gig workers hired through a platform called Shipt.

This week, some of them are protesting its new pay structure. Instead of being paid a set rate per order, an algorithm will weigh how busy a store is, how bad street traffic is and other factors to set the pay for an order.

Algorithms are foundational to how gig platforms like Uber or Instacart do business. Most users are familiar with surge pricing, where prices vary depending on demand. But that’s just part of a complex web of algorithms that affect everything from which jobs a gig worker is offered to how much they get paid for them.

“I really compare it to like the wizard behind the curtain in ‘Wizard of Oz,’” said Carlos Ramos, a ride-hailing driver in San Diego for the past three years. “Stuff is happening back there, and you have no idea what’s going on.”

Ramos has noticed some patterns: When he first logs on, he seems to be offered a lot of shorter, less lucrative rides until he decides to call it a day and head home.

“And then I’ll get a request for a hundred-mile trip in the other direction,” he said. “This has happened time and time again.”

He thinks it’s because of Lyft’s algorithm, but he can’t be sure because companies keep their software secret.

“We have no idea,” said Veena Dubal, a professor at the University of California’s Hastings College of the Law. “Everything that we know about the algorithms is based on what workers tell us they experience.”

Dubal has surveyed hundreds of gig workers to tease out how the algorithms work, and she’s concluded they’re designed to keep workers logged on for as little pay as possible.

“They therefore cannot predict their income on any given day or any given shift,” she said.

These systems cause financial uncertainty that puts workers at a disadvantage, said Kate Crawford, the co-founder of the AI Now Institute at New York University.

“These algorithmic systems are essentially increasing the power asymmetry between workers and employers to quite an extreme degree,” she said.

While each platform has unique algorithms, they all have a common objective, she said: to maximize profits, often at the expense of workers.

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