Precarious Labor During the COVID-19 Pandemic
This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org
This article is from the May/June 2020 issue.
Smartphones have become ubiquitous over the past decade, offering users unprecedented access to each other, to information and entertainment, and to services, especially for well-off professionals. With a tap or a swipe people can restock milk and bread from Instacart; avoid the lunch-time rush with a tasty bite delivered through Seamless; or hail a Lyft when afterwork cocktails turn tipsy. Whatever you need—“there’s an app for that!”
It’s not entirely clear how many people are working in these app jobs—piecework gigs mediated through a smartphone app. In the United States, estimates of “on-demand” app workers who earn money via online intermediaries such as Instacart and Uber vary widely. The Federal Reserve estimated that 16% of adults earned money from app jobs in 2017 while the Bureau of Labor Statistics estimates the number of contingent workers to be roughly six million people.
Even absent concrete numbers, it is clear that the emergence of app jobs in the past decade is a significant development in the evolution of work in the United States. In fact, app workers have become so important that many have been deemed “essential workers” in the battle to quell the coronavirus pandemic. As Americans grow increasingly wary of venturing outside, many are relying on their Instacart app to get groceries delivered to their homes. Some are even calling an Uber to take them to the hospital when they fall sick. A driver in San Francisco recalled how halfway through a ride his young passenger commented that he was worried that he had coronavirus because he had been coughing up blood and was actually on his way to the hospital.
App jobs are part of what employment and labor market expert David Weil calls the “fissuring” of the workplace, whereby employers “change the boundaries of the firm itself” and “employment is no longer the clear relationship between a well-defined employer and a worker.” The spread of multitier subcontracting has enabled companies to plan their budgets around paying for services rather than paying wages. App jobs are the next step—a testing ground for companies to see how much they can force workers, consumers, and governments to take on the costs of production.
Pushing Costs onto Workers
Uber exemplifies the logic of app work. Drivers provide their own vehicle (paying for gas, repair costs, and insurance) and phone, while Uber provides only the software and its network. Uber takes a 25% cut from each ride, yet drivers are not considered employees and the company is not responsible for their safety. Uber is also not responsible for the safety of its consumers (riders), nor the increased congestion and pollution it causes in urban centers. In San Francisco, for example, transportation experts concluded that transportation network companies such as Uber and Lyft were responsible for more than half of the increase in roadway congestion between 2010 and 2016.
App jobs are appealing at first glance. There are few barriers to entry. You can work when you’re able, and the ads promise decent money. You just need a smartphone, often a car, and a willingness to work. Matthew Telles, a former Instacart “shopper” and member of the Gig Workers Collective, told Democracy Now! that, at first, he loved delivering for Instacart. It “paid great and gave [him] access to all the amazing buildings downtown, like the top of the Sears Tower.” In a landscape of degraded work, app jobs can seem like a step up from the frustrating world of scheduling software and low-paid, irregular shifts that are common in the retail and fast-food sectors.
Some app jobs can even feel like being your own boss. Tech companies certainly push this interpretation, emphasizing how they provide
the digital platform—the digital infrastructure that facilitates interactions (often commercial) between at least two people or groups—and you provide the hustle. Uber, for example, is adamant that it is not the employer of the roughly one million drivers worldwide who use its app to find people to ferry around.
Researchers at Carnegie Mellon’s Human-Computer Interaction Institute aren’t so sure. They call the Uber arrangement “algorithmic management.” App workers who use these platforms to earn money don’t have easy access to a flesh-and-blood manager. Instead they interact with an algorithm—a set of exact instructions to solve a problem or perform a computation. Algorithms can be written to perform simple tasks, like adding or subtracting numbers, or complex tasks, such as playing a video or, in the case of Uber, telling the driver where to drive, paying them what they are owed, and so forth. Algorithms effectively transform app workers’ phones into their boss.
Turns out, it’s not so great to have a smartphone as your boss. The modern work relationships enacted through our phones show not only how phones are a dream come true for the well-off, but also how the 21st-century working class is being made, and the divide between the haves and the have-nots is being reinforced.
In the United Kingdom, drivers for Deliveroo, a food delivery app—who are disproportionately immigrants and poor people of color—are closely monitored by Deliveroo’s algorithm. They have 30 seconds to respond to the app when it pings them, and they don’t know where they’re going until they swipe “accept delivery.” If the driver doesn’t accept, or is too slow, meaning the “time to accept orders,” “travel time to restaurant,” “travel time to customer,” or “time at customer” are longer than what the algorithm estimates they should be, her account can be deactivated.
Reliable data on how much pay app workers take home is hard to come by. Ridester’s 2018 Independent Driver Earnings Survey found that drivers of Uber’s most popular service, Uber-X, made a median wage of $14.73 an hour in 2018 after tips but before gas, insurance, and repairs—substantially less than a living wage. Pay can change from one day to the next following tweaks to the app by the company, and workers often have a hard time understanding how their pay is calculated. Last year Instacart and DoorDash drivers, for example, discovered that their companies had been routinely stealing the tips customers left them on the app.
In practice, app jobs are just the latest form of precarious labor. On-demand workers are not entitled to minimum wage, sick days, overtime pay, safety protections, unemployment or health insurance, a pension plan, or disability pay. App workers in service jobs are held hostage to the reviews of fickle customers, and if they have a problem, their app boss usually isn’t much help. Stories abound of app workers who have found it difficult or impossible to get help from a real person at their companies when they needed it.
The coronavirus crisis is a real-time demonstration of just how vulnerable app workers are. After the pandemic brought the economy skidding to a halt, tens of millions of Americans have been thrown out of work, including app workers. The U.S. government passed a stimulus bill, providing federal unemployment payouts to ease the financial pain of the crisis. Significantly, in crafting the bill, app workers were recognized for the first time as real workers and made eligible for stimulus funds. Getting access to these funds has proven difficult, however. Outdated software, understaffed state agencies, and a delay by the Department of Labor in providing official guidance on how the program should be administered have meant relatively few app workers have received relief payments nearly two months into the shutdown.
Moreover, for the millions of app workers still working, a lack of safety equipment and workplace rights have made app jobs increasingly dangerous. In a Medium post, the Gig Workers Collective say Instacart has “turned this pandemic into a PR campaign, portraying itself [as] the hero of families that are sheltered-in-place, isolated, or quarantined.” But Instacart, the collective argues, has “not provided essential protections to Shoppers on the front lines that could prevent them from becoming carriers, falling ill themselves, or worse.”
Thousands of Instacart workers “walked out” on March 30, refusing to fill orders on the app in order to call attention to their concerns. They demanded sick pay, hazard pay ($5 extra per order and a minimum 10% tip per order), and personal protective equipment to be provided by the company. The company brushed off the action claiming the walkout represented only a small fraction of the company’s 200,000 shoppers and did nothing to disrupt the app’s functionality.
App workers aren’t the only front-line workers who are anxious about safety and stress during the pandemic. Grocery store employees, health care providers, cleaners, warehouse workers, and truck drivers are just some of the workers dealing with a lack of protective equipment and demands to keep working while everyone else stays at home. This shared sense of struggle shaped the May Day walkouts and demonstrations by frontline workers at Amazon, Instacart, Whole Foods, Target, and FedEx. But app workers face additional challenges to organizing because they aren’t officially recognized as employees and often the only thing connecting them to fellow workers is an app they don’t control.
Organizing App Workers
Over the past few years app workers have been fighting back—demanding recognition and fair compensation for the work they do and developing strategies to overcome these organizing hurdles. In 2018 Uber and Lyft drivers, working with the New York City Taxi Workers Alliance and the Independent Drivers Guild, convinced the city to implement the country’s first cap on drivers, limiting the number of ride-hail vehicles that could hit the streets in an effort to boost pay for all drivers. Last year California legislators approved Assembly Bill 5, a landmark bill that forces app-based service companies (such as Uber and Lyft) to reclassify their workers as employees rather than independent contractors.
Some more traditional labor unions have made tentative efforts to organize app workers. The United Food and Commercial Workers Local 1546 in Chicago, for example, is trying to sign up Instacart shoppers. App workers are also forming new organizations. The Gig Workers Collective is nonprofit group that bills itself as a “first responder” designed to “take the lead in organizing immediate action to new grievances.” A number of state-based groups have also emerged. In California, Gig Workers Rising and Mobile Workers Alliance organized a three-day caravan of Uber and Lyft drivers in support of Assembly Bill 5.
Platform companies who desperately want to maintain the digital piecework model are pushing back hard against these initiatives. In New York City, Uber and Lyft sued the city over the driver cap and implemented a punishing new tiered quota system for drivers. The rideshare companies also sued the state of California to prevent their drivers from being considered employees and are working on a ballot initiative to be exempted from the new regulations. In the meantime, they are simply ignoring the legislation, prompting California Attorney General Xavier Becerra to file a lawsuit against Uber and Lyft in San Francisco County Superior Court.
The federal government’s belated recognition that app workers are real workers that deserve protection, even if only rhetorical at this point, is a positive shift, however. It is a signal that support for app workers is growing and that tech companies will find it more and more difficult to hide abusive employment relationships behind slick apps and feel-good stories.
Board of Governors of the Federal Reserve System, “Report on the Economic Well-Being of U.S. Households in 2017-May 2018,” May 2018; U.S. Bureau of Labor Statistics, “Contingent and Alternative Employment Arrangements News Release,” June 7, 2018; Janet Burns, “‘He was coughing up blood:’ Uber and Lyft Drives Face Illness and Confusion Amid COVID-19 Outbreak,” Forbes, March 17, 2020; David Weil, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done To Improve It (Harvard University Press, 2014); San Francisco County Transportation Authority, “TNCs & Congestion” draft report, October 2018; “Essential or Expendable? Gig Workers at Instacart & Grocery Stores Demand Safety Gear & Hazard Pay,” Democracy Now!, April 20, 2020; Min Kyung Lee et al., “Working with Machines: The Impact of Algorithmic and Data-Driven Management on Human Workers,” Carnegie Mellon University, 2015; Sarah O’Connor, “When Your Boss Is an Algorithm,” Financial Times, September 8, 2016; Ridester, “Ridester’s 2018 Independent Driver Earnings Survey,” March 29, 2019; Rachel Siegel, “DoorDash to Change Its Controversial Tipping Policy After Outcry,” Washington Post, July 24, 2019; Rebecca Rainey, “Millions of gig workers are still waiting for unemployment benefits,” Politico, April 30, 2020; Gig Workers Collective, “Instacart Emergency Walk Off,” Medium, March 27, 2020; Noam Scheiber and Kate Conger, “Strikes at Instacart and Amazon Over Coronavirus Health Concerns,” New York Times, March 30, 2020; gigworkerscollective.org; Edward Ongweso Jr., “The Lockout: Why Uber Divers in NYC Are Sleeping in Their Cars,” Vice, March 19, 2020; Cyrus Farivar and Olivia Solon, “Uber and Lyft Face Landmark lawsuit over gig worker classification,” NBC News, May 5, 2020.
Egypt wants to register millions of gig workers for state insurance, aid
CAIRO: Egypt will start registering millions of gig workers in order to offer them health insurance and emergency state aid during the coronavirus pandemic, which has taken a particularly heavy toll on the nation’s ad-hoc employees, officials said.
There are at least 14 million gig workers in Egypt, and while some workers and campaigners welcomed the government’s drive, others warned that many workers could be reluctant to sign up – fearing tax and social security payment demands.
The government said it plans to identify and support two million gig workers in the country of 100 million people by the end of this year, labour ministry spokesman Haitham Saad El-Din said on Saturday.
“It is part of a government plan to give assistance to this segment of the society which has been majorly affected by the pandemic,” he said, adding that officials were focusing first on identifying casual construction labourers.
Gig workers who have their employment status registered on their national identity cards under a new “irregular employment” category will be given free social security insurance and be eligible for state welfare programmes.
Egypt’s state-run insurance plan includes life insurance and disability cover, as well as covering healthcare costs.
The announcement is the latest in a series of government measures aimed at shielding vulnerable groups from the economic fallout of the pandemic.
Soon after the coronavirus outbreak began, it launched a programme that supports irregular workers with monthly aid, and Egyptian President Abdel Fattah el-Sisi called for financial support to be boosted when a second virus wave took hold.
State welfare spending surged 36% in the first half of the current fiscal year, Finance Minister Mohamed Maait said recently.
On the books
Some daily labourers hailed the registration drive as a positive step, saying it would help bring them into the formal economy and recognise their economic contribution.
“Millions of Egyptians have been affected by this pandemic but it’s really good that the government is not leaving us behind,” said Farouk Mahmoud, 35, a temporary worker from the city of Sohag.
Still, while the latest data puts the number of gig workers at 14 million, the real number may be much higher – making registering them a daunting administrative task, said Bassant Fahmi, a member of parliament’s economic affairs committee.
Some workers may also be wary about being on the books.
“Many of them may fear being asked afterwards to pay taxes or insurance. That could mean a lot of gig workers avoiding being identified by the government,” she told the Thomson Reuters Foundation.
But besides any misgivings about being under the government’s radar, many gig workers in Egypt are more concerned about the dearth of permanent job opportunities – especially for young people – and the health of the wider economy.
“It isn’t crucial for me to have a job on my ID,” said Abanoub Lotfi, a 26-year-old driver for ride-hailing service Uber, who has a degree in commerce.
“What really matters is that the government offers me a stable job that suits my academic background and helps me afford my needs and those of my family.” – Thomson Reuters Foundation
Self-employed, gig workers still waiting on PPP rules for bigger loans
Virojt Changyencham | Moment | Getty Images
The self-employed and gig workers are anxiously waiting for the Small Business Association to update guidelines to its Paycheck Protection Program, which could mean bigger loans for the group.
The Biden administration announced last week changes to how the SBA will calculate forgivable loans for sole proprietors and other small businesses without any employees. The updated formula — which will likely lead to larger loan amounts for non-employer firms, including sole proprietors and independent contractors — will be announced this week.
It’s still unclear when in the week the SBA will update its guidelines, meaning that those who would benefit from the change should still wait to submit their applications for the program.
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“Loans submitted prior to the official rule changes are subject to the rules in effect at the time of application,” said Carol Wilkerson, an SBA spokesperson.
That’s led to frustration for some who want to take advantage of the two-week priority application window for the smallest businesses that went into effect on Feb. 24 and ends the second week of March. Of course, sole proprietors will still be able to apply for PPP loans until the program deadline at the end of the month; they just won’t get priority treatment once the 14-day exclusivity window closes.
For now, lenders are working to help borrowers prepare what they can to be ready for the updated guidelines.
“We’ve always taken the approach of, ‘Hey, we don’t have all the answers, but let’s proceed as far as we can without the answers,'” said Ed Barry, CEO of Capital Bank, based in Rockville, Maryland.
Barry added that the bank is also working to build awareness among small businesses that may not realize that they’re now eligible for a PPP loan.
What is known about the formula change so far
For firms with employees, maximum PPP loans are 2.5 times average monthly payroll costs, per the SBA. As a stand-in for payroll costs for solo workers, the SBA used net profit information from tax returns, even though payroll and profit are different measures.
In addition, the net profit line includes deductions, which reduced or eliminated profit numbers for some, yielding small loans or making them ineligible for the program.
The updated formula will instead use gross income as a stand-in for payroll costs, a larger number than net income, meaning many firms will get more money in forgivable loans.
“It’s a tremendous change,” said Keith Hall, president and CEO of the National Association for the Self-Employed.
The change is important, as sole proprietorships are the most common business structure in the U.S. The IRS says there are some 41 million self-employed people in the country and, in 2018, more than 27 million had filed a return with an IRS 1040 Schedule C form for sole proprietors, according the agency.
Many of these businesses have been particularly hard hit by the coronavirus pandemic. About 70% of such firms with no employees are owned by women and people of color, and 95% of Black-owned and 91% of Latino-owned firms are sole proprietorships, according to SBA data.
But so far, very little forgivable funding from the SBA has gone to sole proprietorships — according to a recent survey from NASE, nearly two-thirds of its members said they didn’t get any money from the program.
Much of that was due to confusion in the early days of the program around eligibility and forgiveness, which are hopefully clearer today, Hall said.
“Many of the reasons that those small-business owners did not either apply or get approved for a PPP loan — I think many of those barriers have been removed,” he said.
To be sure, other changes to the PPP program that the Biden administration announced last week do go into effect today, March 1 — some student loan borrowers, legal non-residents and those with certain criminal records are now eligible to apply for forgivable loans.
Still, there are further questions for sole proprietors around the timing of applications, especially for those who already got a loan approved but would get more under the new formula. So far, there isn’t a process for amending a dispersed loan, or holding back an application that’s currently pending.
“All unknowns right now,” said Alex Cohen, CEO of Liberty SBF.
If you’re a small business with a story to share about PPP, email Carmen Reinicke at email@example.com
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
Dream realised in compelling live gig
Mary’s Underground, February 28
In another bid to reach beyond the musical horizon, Matt Keegan composed Vienna Dreaming as a tribute to his great grandfather, Heini Portnoj, an Austrian Jew forced to abandon his musical career in Vienna to escape the rising tide of Nazism. Three years after releasing a recording of the suite, Keegan finally presented this ambitious music in concert.
Its strength lies not only in the imagination brought to bear, but in Keegan’s empathy for his subject, his intent being to slide inside the mind of his great grandfather, both as events unfolded in 1930s and in the aftermath, with Portnoj looking back after settling in Australia.
The concert’s instrumentation and personnel differed from the album, with only Keegan (clarinet, saxophone) and drummer Miles Thomas being shared. The album’s cello now became Veronique Serret’s violin and the double bass became Brendan Clark’s electric bass, with Ben Hauptmann (electric guitar) and Freyja Garbett (keyboards) completing the cast. These changes were much more than cosmetic, with the improvisational aspect of the work expanded, allowing for some startling individual contributions, most notably from Serret.
As consistently strong as the suite was, the opening Vienna Overture was especially compelling, with the main waltz-time theme materialising from skimming fragments of sound, dissolving back into those fragments and reassembling itself yet again – an evocation of an elderly Portnoj musing on an impossibly different time and place, long, long ago.
As with the album, the sound was carefully calibrated to shift between the familiar – the bruising intensity of Keegan’s baritone saxophone, for instance – and an extreme use of electronic treatments, including occasionally radical reverb and delay on the drums, amplifying the work’s prevailing oneiric quality and intentionally blurring clarity of outline. Ghosts of Johann Strauss, Frank Zappa and Miles Davis all seemed to materialise and dematerialise at various points, but without any sense of appropriation.
Providing an instantly engaging opening set was Yulugi, with Gumaroy Newman’s arresting voice and yidaki leading us deep into his ancestral culture, in dialogue with Keyna Wilkins’ piano and luminous flutes.
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