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Coronavirus and the uncomfortable calculus of the gig economy

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In this incredibly strange, unnerving moment in history, we are all engaged in weird little games of calculus. For me, tasked with looking after my elderly parents, a once simple decision has suddenly become complicated: how to best get groceries?

Recently, following guidelines from various authorities, I used Instacart to get things delivered. When the Instacart worker dropped off the bags on my folks’ porch, I donned a pair of bright yellow dishwashing gloves to bring them inside. I am reasonably sure he saw this from his car. I felt awful.

The decision I had implicitly made was this: It was better for the Instacart worker to expose himself to risk in a grocery store than it was my 73-year-old mother or, for that matter, me.

This is what the COVID-19 phenomenon has revealed: the workers of the gig economy are used to offload inconvenience, hardship — and now, risk. And as those who work for Instacart, Uber, and others are now agitating around that fact, and even going on strike as a result, perhaps it’s time for a renewed labor movement — one that takes up the precariousness of these workers as its main cause.

After all, among the stranger things about the gig economy is that, for all its shiny rhetoric about modernity and freedom, it has produced an army of workers who live in a kind of Dickensian hardship. Cities across the continent are filled with people sweating on bicycles delivering food, or in cars inching their way through snow or traffic to drop off groceries to people in large detached homes. Pay is low — often hovering just near minimum wage — while protections and benefits are mostly non-existent, thanks to companies fighting tooth and nail not to classify these workers as traditional employees.

It betrays an uncomfortable reality, but one that should be clear by now: the convenience of the gig economy in which a burger and fries can just show up at your door is predicated on the physical labor of poorly paid workers.

But the current situation has made this reality far more troubling because, in addition to hardship and precarity, workers are now the ones assuming the risk inherent during a pandemic, exposing both themselves and their families and loved ones to infection. Moreover, given the comparatively low wages, it is not as if they can simply stop working, or apply for government benefits; instead they are trapped between poverty and risk.

It’s for this reason that Instacart workers, for example, organized a strike at the end of March, to insist upon hazard pay and better safety practices for the company in general.

It’s a heartening moment. But alas, the nascent movement faces two problems. Firstly, with demand for these services up, and so many people in restaurants and other industries out of work, companies are on a hiring spree which may drown out any labor uprising. Secondly, Instacart has a valuation of about 8 billion dollars, while Uber’s market cap is 43 billion dollars. Meanwhile, though some of Amazon’s warehouse workers are also protesting their current working conditions, that company is worth over a trillion. With resources like that, resisting both their firepower and their ability to just keep hiring more people is incredibly difficult.

Ironically, what the era of the virus has also highlighted is that, in the abstract, not all ideas related to the new gig economy are bad. As services like Instacart have proven, the ability to, say, have groceries delivered for seniors, people with limited mobility, or those who are immunocompromised is very useful, even lifesaving.

But it’s the implementation and exploitation that is at fault here. While companies rack up enormous valuations on the backs of venture capital, everyday workers are pushed into subsistence wages and a lack of safety, health care, and security.

Some history can be illuminating. For example, few would argue that the Industrial Revolution was a net negative; it was that shift to mass, specialized production that filled our lives with relative comfort. But in its early days, factories were dangerous, dirty, and even filled with child workers.

It was only the rise of the labor movement that was able to act as a counterbalance to the way in which each successive phase of capitalism predicates rapid growth on exploiting workers, and instead provide protection while also allowing opportunities for people to work.

Now, the era of COVID-19 has made it startlingly clear that the gig economy requires a similar collective pushback against the companies that have built businesses on the backs of delivery people, drivers, and warehouse workers. It is, after all, a time of complicated, hard decisions; and as helpful as the many facets of the gig economy can be, it is time to treat gig workers as employees, and give them the many protections that category of people so rightly deserves.

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Oxygen chooss CPI for gig economy debit cards

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CPI Card Group Inc. (OTCQX: PMTS, TSX: PMTS) (“CPI” or the “Company”), a payment technology company and leading provider of credit, debit and prepaid solutions, today announced a collaboration with Oxygen, the first digital banking platform tailored to meet the unique needs of the freelance economy.

Oxygen selected CPI to develop its first personal and business debit cards – tapping the Company’s card manufacturing experience and advanced print design services to create a payment product that embodies Oxygen’s unique financial market positioning.

Oxygen provides flexible banking to the millions of U.S. professionals who thrive on multiple income streams, contract work and freelance gigs. The company’s solutions are available through a mobile app that enables a fast, frictionless user experience. Oxygen takes a holistic approach to meeting the financial services needs of independent professionals. In CPI, Oxygen found a card manufacturer that could create a payment solution from end to end. CPI and Oxygen collaborated to develop two packages with clean and crisply-designed vertical cards that arrive nested in interactive packaging. Back-of-card personalization completes the high-end look and feel.

“At Oxygen, we understand that the physical brand experience, – including everything from the card design to the packaging appearance – matters for our creative, tech-savvy clientele. With CPI’s cost-effective scale and design strengths, we were able to deliver a sleek card to customers in a unique, memorable fashion,” said Hussein Ahmed, founder and CEO at Oxygen. “We are pleased to have such a reliable secure card provider and are thrilled to offer customers an eye-catching debit card that echoes their drive, ambition and lifestyle.”

Through CPI’s advanced personalization capabilities and packaging options, financial institutions can develop differentiated card programs that deliver a premium cardholder experience. The Company provides end-to-end support and customizability that allow businesses to create tailored products that bridge the digital and physical worlds for their brands. Additionally, CPI’s innovative manufacturing approach empowers companies to introduce exciting card designs and technology features, which can offer a competitive edge in the pursuit of top-of-wallet status.

“CPI and Oxygen share in being deeply customer-centric in everything we do. We are excited to leverage our manufacturing strengths and high-quality print and design services to achieve debit cards that match the modern, sophisticated aesthetic of Oxygen’s brand and its clients,” said Guy DiMaggio, SVP and General Manager, Secure Card Solutions, CPI Card Group. “We look forward to supporting more fintech innovators and pioneers in creating payment cards that expand the physical aspect of their brands.”  

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How Covid-19 has affected the gig economy in South Africa

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/ MEDIA STATEMENT / This content is not written by Creamer Media, but is a supplied media statement.

A report by The Fairwork Project – a collaboration between various South African and foreign university research units – has found that the non-standard employment status of gig workers during Covid-19 has made them particularly vulnerable during an economic shutdown. However, some gig networking platforms have stepped up to ease the pain.

Fairwork, which draws on the expertise of staff from the universities of Oxford, Cape Town, Western Cape, Manchester, Institute of Information Technology Bangalore in India and the Technical University of Berlin, wrote a report titled Gig Workers, Platforms and Government During Covid-19, which was released in May 2020.

The report looked at gig economy platforms active in South Africa, government responses  regarding informal, freelance or gig economy workers, and actual worker experience surveys. While most platforms regarded workers as independent contracts rather than employees, to their detriment, the report found that gig technology company, M4Jam and SweepSouth actively worked to offset looses of income for contracted giggers.

The report compiled a scorecard which covered principles of fair pay, fair working conditions, fair contracts, fair management and fair representation. The scorecard specifically highlighted pay-related policies, given their importance to gig workers.

The scorecard found that three of the top-ranking platforms – M4Jam, SweepSouth and getTOD – had come up with innovative solutions to the problems their workers faced during Covid-19 and lockdown. M4Jam and SweepSouth were the only platforms to attempt to compensate for gig worker pay loss during lockdown.

“Our survey suggests the majority of gig workers have lost their jobs entirely, while those able to work during lockdown have, on average, lost four-fifths of their income. As a result, many reported that just getting food to eat was their top priority,” the researchers note.

“While [gig economy] platforms have long marketed themselves as facilitators of supplementary income streams, all of this exposes the complete dependency of most workers on their platforms as the basis for their livelihood,” they wrote.

The report stated that gig economy platforms, which operate by connecting jobbers with potential temporary work at corporate entities, should and could do more to help, by such measures as reducing commissions, deferring loans, offering healthcare assistance and sick pay, improving communication and engaging with workers and their representatives more effectively.

Georgie Midgley, CEO of M4Jam, said the report’s finding that inaction on behalf of gig platforms was the norm gave credence to common criticism of the gig economy. “Unfortunately most gig economy platforms live up to negative perceptions about jobber vulnerability. In a country like South Africa where the gig economy can play a vital role in supplementing income and providing much-needed temporary employment, the down side is potential exploitation of workers who do not have the safety net permanent employees have.”

Gig workers have tended to fall between the cracks of government financial relief measures, according to the report, principally because they fall outside the UIF net. “Gig workers have fallen between two stools: able to access neither the [government] support offered to formal employees, nor the support offered to those registered as small businesses. If gig workers are to avoid destitution, government must take further action,” the researchers said.

At the same time, the report said, the value of gig workers to the economy has been underlined by Covid-19 and lockdown. “Delivery services, for example, have been essential to society during lockdown. In the longer term, a legal resolution must be found to rescue gig workers from the employment-status limbo that the pandemic has brought into sharp relief.”

The report found, for example, that both Uber and Bolt ride-hailing services had closed down their local contact centres, “making it harder for drivers to interact with the platforms”. A constant criticism of gig economy platforms is that they simply cannot provide protection of workers’ rights in the same way that the formal economy’s employers do.

With lockdown preventing physical movement of jobbers completing micro-tasks for corporate employers, the report commended M4Jam’s approach of collaborating with one of its clients, Cell C, in rolling out a three-week training initiative that provided payment to workers for completing up to 48 short lessons undertaking via their mobile phones.

This provided further upskilling of contracted jobbers during the down time, and provided an average of R310 per week for those undergoing the training. M4Jam works with corporate clients such as Morecorp, i-People, Twizza, Sereti and more.

The research found that the trends in South Africa broadly reflected gig economy trends around the world, with roughly half of gig workers losing their “jobs” during lockdown. 

“We agree with the report’s findings that if gig economy platforms direct and exercise control over the work given to contracted jobbers, they should go to greater lengths to be responsible for assisting workers in dealing with the effects of Covid-19. This will not only maintain goodwill with contracted workers and ensure livelihoods are not lost – it will also show that the gig economy is a viable long-term alternative for job seekers who cannot get a foothold in the formal economy,” said Midgley.

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Gig economy battle spans unemployment benefits (NYSE:UBER)

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The $2.2T coronavirus relief law enacted in March extended unemployment benefits to previously ineligible groups, like the self-employed and independent contractors.

However, some Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) drivers are nervous about tapping the program out of fear it would certify them as independent contractors, and undermine their fight to be classified as employees.

While some labor attorneys believe their concern is valid, others think the threat is overblown.

California passed a law last year requiring gig companies to treat independent contractors as employees, and other states, like New York, are attempting to follow suit. California’s AB5 law took effect in January, but is being challenged in court.



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