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Coronavirus Pandemic Exposes the Gig Economy for the Flawed Industry That It Is



  • As coronavirus spreads throughout the United States, we’ve seen economic pain for many workers in numerous industries.
  • The gig economy workforce already lacks sick pay and health care.
  • Coronavirus has shone a light on the gig economy, highlighting just how fragile the industry is.

Back in November, before the coronavirus was a factor in day to day life, Uber CEO Dara Khosrowshahi interviewed with HBO.

During his Axios on HBO interview, the Uber CEO was asked about the killing of journalist Jamal Khashoggi by the Saudi government.

His response? The Saudi government “made a mistake”:

I think that government said that they made a mistake. We’ve made mistakes too, right? With self-driving, and we stopped driving, and we’re recovering from that mistake. I think that people make mistakes; it doesn’t mean that they can never be forgiven.

It should surprise no one to learn that Saudi Arabia is Uber’s fifth-largest shareholder.

You have a CEO who is willing to describe the killing of a journalist who was dismembered with a bone saw as “a mistake.” It’s probably safe to assume that they aren’t all that concerned with driver healthcare and pay rate.

Source: Twitter

Fast forward to today, and those in the gig economy are suffering in a post-coronavirus world

Jaime Maldonado is a driver for Lyft. Like most in the gig economy, he’s finding life tough as the coronavirus tears through the United States. Speaking to the New York Times, he commented:

What am I going to do to pump gas and feed my kids tomorrow?

Drivers like Maldonado have seen their work drop by as much as 50% in recent weeks. From that reduced income, he still has to pay Lyft their rental fee for his vehicle.

These issues aren’t just confined to workers of Uber and Lyft. The entire gig economy has been operating in a precarious position for years now. A lack of guaranteed wages, health care and sick pay has long drawn the ire of people like Senator Mark Warner.

Warner has proposed federal legislation to ensure the 15 million-strong gig economy workforce is provided with benefits.

Source: Twitter

Of course, coronavirus is a pandemic, and gig workers in other parts of the world are suffering just as much. As one London Uber driver remarked:

I’ll take paracetamol if I have a temperature and pull myself up because I don’t have any other means of earning, and this is my livelihood.

Will gig workers qualify for help during the pandemic?

In the U.S., we’ve seen growing demand for paid sick leave and insurance for people suffering from coronavirus.

Well, for employees.

What about independent contractors and gig economy workers? Many are not sure they’ll qualify.

Industry leaders have made the right noises in light of coronavirus, but workers remain unconvinced

Following the increasingly severe situation surrounding the coronavirus, gig economy leaders pledge to support workers who are struggling with the virus.

Still, according to The Guardian, some drivers don’t trust the companies to pay up.

To qualify for any sick pay, a worker would have to confirm a diagnosis for Covid-19, or prove they are subject to government-enforced quarantine.

Source: Twitter

With actual testing very difficult to access, this option won’t be available for many workers in the immediate future.

As always, gig workers will have to do what they always do. Suck it up and get on with it.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of

Last modified: March 21, 2020 5:50 PM UTC

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Gig companies prepare to take their fight for independent work national under a more sceptical Biden administration




Still fresh off of a landmark victory in California, companies like DoorDash, Instacart, Lyft and Uber are preparing to bring their message supporting an independent workforce nationwide.

But the companies will face new hurdles in passing similar legislation outside of California. The tradition of direct democracy through ballot measures that exists in the state is less common elsewhere, meaning companies will have to win over lawmakers, not just voters. And in Washington, they will have to face a new federal administration led by a president who openly opposed the California proposition while on the campaign trail.

Nearly 59% of California voters voted yes on Proposition 22, the ballot initiative supported by the gig companies to maintain their workers’ status as independent contractors, rather than employees. The measure would save the companies costly expenses that come with an employed workforce, but it would also require them to provide some new protections for app-based ridesharing and food delivery workers. Those would include benefits they could carry between apps and guaranteed minimum earnings.

The proposition essentially undermined a California law known as AB5 that took effect in early 2020. AB5 targeted the gig companies by establishing a three-part test to determine if workers should be classified as employees.

Prior to Election Day last year, Uber and Lyft were still fighting a lawsuit from the California state attorney general in court that claimed the companies illegally maintained their workers as independent contractors under the new law. A judge had granted a preliminary injunction requiring the companies to reclassify their workers, determining that the state had a good chance of prevailing on the merits.

The passage of Prop 22 seems to have reversed the fates of Uber and Lyft in California and reinvigorated the fight for their business models across the country. The gig companies point to the relatively high level of support California voters showed for their ballot measure as a reason why lawmakers in other states should see that the independent model is supported by their constituents.

But state lawmakers working on bills to protect gig workers in places like Illinois, Massachusetts and New York told CNBC that the outcome in California does not necessarily portend the future in their own states.

Source:, Twiter

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Gig companies prepare to take their fight for independent work national under a more sceptical Biden administration

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In pandemic, business owners seek next gig | National




Willen bakes for his two dogs, Cooper and Maple — which gave him the idea for Cooper’s Treats. He sells the treats on his website and Amazon.

“It’s looking like a real business,” he says.

Kathryn Valentine closed her consulting business last summer because she had lost her child-care options. Valentine’s nanny quit to take care of her own children, and daycare centers were closed. With a baby and a toddler, the Atlanta-based mother couldn’t work the 9-to-5 schedule followed by the apparel companies that were her clients. She had to come up with another line of work — and quickly.

She already was an expert in training women in negotiating, a skill necessary for career success. Valentine had researched the subject in business school, so she founded Worthmore Negotiations and began lining up corporate clients.

“About once a week I’ll have a commitment during the day, but otherwise all my work gets done after 7 p.m.,” she says. But Valentine hopes to revive her consulting business once the pandemic is over and she has child-care again. Her hope is to keep both businesses.

A series of lockdowns in Britain forced Steve West to close his acupuncture practice. With no money coming in, he returned to digital marketing, work that helped him get through a slowdown in his practice during the Great Recession. He’s not sure when, or if, he’ll return to acupuncture, given people’s uncertainty about close contact.

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Pandemic-Scarred Restaurants And Gig Workers Fight Back Against The Delivery Apps




When James Freeman opened his American comfort and Creole restaurant in Bushwick about a decade ago, he called it Sweet Science. The term refers to the art of boxing. Not surprisingly, Freeman’s ready with a boxing metaphor to describe the hit his restaurant took the past year of COVID-19.

“Man, it took an uppercut, a rope-a -dope, you know, some jabs to the side,” he says, his voice rising in excitement. “It’s like, “Jimmy, Jimmy, how’s your ribs? Don’t touch your ribs!’”

The shutdown last March was especially painful because Sweet Science had never done any deliveries. It has a large, open dining space for more than 100 people and a horseshoe-shaped bar designed to encourage long nights hanging out with friends and neighbors.

Like many restaurants fighting to save their businesses, Freeman signed up on Grubhub, DoorDash and other third-party delivery apps. But they ate into his revenue. They were charging up to 30 percent in commission until May, when the City Council capped their fees to 20 percent during the pandemic.

Freeman said that measure helped, along with outdoor dining and limited indoor dining. But by year’s end, he had run out of government aid from the Paycheck Protection Program and was not able to pay rent. He even closed down for January. Using delivery apps could only help so much.

“Did it give me enough time to kind of to kick the can down the road? Yes,” he said. But it didn’t turn things around. “I’m actually waiting for spring, still,” he said, “so I can physically have people in here and physically have people outside.”

In the year since the COVID-19 pandemic struck New York, the restaurant industry has taken one of the biggest hits, next to arts and entertainment. An estimated 40% of all restaurant jobs disappeared last year, or about 130,000, according to a report by the New School’s Center for New York City Affairs. Restaurants that survived were heavily dependent on delivery services, one of the few sectors that saw a growth in jobs. Now, both restaurant owners and delivery workers say that growth came at a great cost and they are fighting back.

At Sweet Science, general manager Nicole Anna Dowling said losing a few dollars on every $9 burger meant less money to pay for labor and other expenses. She said the third-party platforms are taking advantage of her desperate industry.

“These are huge, faceless corporations that seem to be the only ones that have come out of this pandemic, like, with billions of dollars,” she said. “I just don’t think that they need to hurt the little guy like this. Like, what would be wrong with 10%?”

While third-party apps still are not profitable, business did surge last year for DoorDash, Postmates, and Uber Eats. Grubhub alone posted revenues of half a billion dollars in the final quarter of 2020, an increase of almost 50 percent versus the same period in 2019.

The city’s restaurant industry is now pushing for a lower, permanent cap on the third-party app fees statewide. But Grubhub spokesman Grant Klinzman said fee caps all around the country cost the company a total of $50 million in the final quarter of 2020.

“Caps limit how restaurants, and especially small and independent establishments, can effectively market themselves to drive demand and therefore severely limit how many customers and orders we can bring to these restaurants,” he said.

Limiting Reliance on Apps

At the Handpulled Noodle, a tiny eatery in Harlem, owner Andrew Ding said most of his business always came from takeout and deliveries because there is so little space to sit. He specializes in homemade noodles and dumplings with flavors from northwest China.

Ding has used Grubhub, Uber Eats, Postmates, DoorDash and Seamless. A couple of years ago, he got tired of the platforms’ high fees, and customers sounding off about meals being late.

“I was desperate to switch,” he said. “We were the front person for all of the complaints.”

Ding signed up with a delivery-only service called Relay that can operate with the apps. For example, on an order placed with Grubhub, he pays only the 5 percent marketing fee and then pays Relay 10 percent plus $3, which he can pass along to the customer. Ding estimates this cost him 35 percent less during the pandemic than GrubHub’s delivery service.

“I think I was just lucky that I found Relay before the pandemic,” he said.

Ding likes that Relay lets him track the driver on his phone or tablet, enabling him to answer questions from customers wondering when their food is coming. He cannot do that on the third- party apps. He also included leaflets with each delivery urging customers to help him save money by ordering meals directly from his website, which doubled his business there.

Overall, he said the Handpulled Noodle not only survived 2020 but made about 5 percent more money than in 2019. His sitdown restaurant, Expat, lost money. But he does not believe he can abandon third-party apps completely.

“You would be turning the lights off on a big portion of your customer base that’s out there that have become very dependent on these platforms,” he said.

Instead, Andrew Rigie, executive director of the NYC Hospitality Alliance, said the pandemic pushed restaurant owners to figure out ways to become less reliant on the apps.

“Restaurateurs have been looking at ways to help reduce their costs, streamline their delivery, and ensure that as many orders are going through their own channels as possible to reduce the additional fees and also to ensure that they have ownership of the customer data,” he said.

The apps are responding to this pressure from restaurants. DoorDash offers delivery-only now plus other services for restaurants looking to reduce their fees. Grubhub started a $100 million pandemic relief program to lower restaurants’ commissions, but it was criticized for locking them into contracts. Uber Eats allows restaurants to use their own staffers for deliveries.

The number of city eateries using Relay jumped 70 percent last year, according to Alex Blum, CEO and founder of the New York-based company.

“We had record numbers of restaurants signing up,” he said. However, he said a lot were “restaurants that typically have never done delivery.”

These new clients did not do a lot of volume, and he said orders from Manhattan office workers dried up. As a result, Blum said Relay’s revenues declined by 20 percent last year.

More Jobs and More Demands by Workers

The delivery sector is one of very few city industries that hired more people during the pandemic. According to the New York State Department of Labor, there were 21,900 delivery and courier jobs in New York City in 2020, an increase of 8.4 percent from 2019 and the largest jump since 1990.

But those are only payroll jobs. They don’t include the gig workers at third-party apps, who are classified as independent contractors and were in great demand.

“It would not be unthinkable that the total numbers now are around 80,000,” said Maria Figueroa, director of labor and policy research at the Worker Institute at Cornell University’s School of Industrial and Labor Relations.

Figueroa bases that on the number of commercial cyclists who were registered before the pandemic, plus an estimated increase.

Like the restaurants, these workers needed the apps to survive. Also like the restaurants, they felt exploited. They include many low income immigrants and people of color at the greatest risk of contracting COVID.

A delivery cyclist rides through the snow next to a shuttered outdoor dining setup in the East Village during last month's snowstorm.


A delivery cyclist rides through the snow next to a shuttered outdoor dining setup in the East Village during last month’s snowstorm.


Lucina Villano said she bought her own delivery bag, helmet and specialized winter clothes to ride around on her e-bike. The 31 year-old Mexican immigrant lives in Washington Heights and used to work in a restaurant. A couple of years ago, Villano switched to delivering for DoorDash and Relay because she has a young child and wanted more flexible hours. But the work got harder in the pandemic.

“They no longer allow you to use the restrooms,” she said, in Spanish. “You have to take your breaks outside, even if it is cold.”

She also complained that she rides long distances because Relay doesn’t let her see where she is taking a delivery in advance, only the restaurant’s location. If she opts out she risks losing more jobs.

Villano is in a group called Los Deliveristas Unidos. It was organized last fall by the Worker’s Justice Project, which is lobbying the City Council for a law requiring bathroom breaks, sick pay, personal protective equipment, hazard pay, and the right to access full receipts to prevent tip theft by the apps. (Some third-party apps are now providing free and reduced-cost safety equipment for workers and bathroom access.)

Ligia Guallpa, executive director of the Worker’s Justice Project, said real independent contractors set their own rates but gig workers cannot. She calls the apps “disruptors.”

“They’re not really paying minimum wage, which is in New York, $15 an hour,” she explained. “What they’re offering is opportunities to work without a wage and without essential rights.”

DoorDash, Grubhub and the others typically pay for each delivery item, plus tips. Drivers said they can make $20 an hour or more when they are busy but there is no guarantee. Relay is unique in paying a fixed hourly wage of $12.50, plus tips. Blum said this hourly wage is one reason his workers do not get to choose which destinations they can deliver to in advance.

Several delivery companies have been accused of stealing workers’ tips, and Relay settled a lawsuit after being accused of not paying overtime.

A national debate is underway about whether gig workers should be independent contractors or employees. California passed a law requiring them to be paid healthcare, unemployment, and other benefits. But that law was overturned by the ballot initiative Proposition 22 in November with backing from Uber, Lyft and DoorDash.

Those tech companies are now gearing up for similar battles in New York and other states. DoorDash, Uber and Lyft have joined local business groups, plus Rev. Al Sharpton’s National Action Network in a group called the New York Coalition for Independent Work. They are lobbying for gig workers to remain independent contractors. They argue most do not want to go full-time and that the industry can help them in other ways.

“This includes supporting modern legislative solutions that protect worker independence while extending benefits and protections,” the coalition said in a statement. It has not provided any specifics, though, about which benefits or how they would be funded.

Relay’s Blum, who is not part of the coalition, said he sympathizes with the workers. “I think what’s happening is you have a small minority that do see this as kind of like their full-time thing that want to, essentially, push a change onto everyone else,” he explained.

However, since his delivery company and the third-party apps have yet to turn any profits, he said it is impossible to expect them to hire the drivers as full-time employees.

Figueroa, who is on the board of the Worker’s Justice Project, said there are other ways to help workers besides reclassifying them. New York City has a minimum pay standard for Lyft and Uber now. Those drivers are independent contractors, just like restaurant delivery workers.

“It is possible to accommodate a certain level of protections,” she said. “And the way those are funded are really by increasing the fees that are charged for each delivery.

But those added fees would have to be paid by someone, at a time when the restaurant industry is hurting. As lawmakers in New York City and Albany consider changes, in the wake of the pandemic, restaurants, gig workers, and the apps are all fighting to shape the jobs of the future.

With translation assistance from WNYC’s Marcos Sueiro Bal

Beth Fertig is a senior reporter covering the city’s recovery efforts at WNYC. You can follow her on Twitter at @bethfertig.

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