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Wealthier Americans nearly twice as likely to use gig economy services during pandemic, survey shows

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NEW YORK (AP) — When ride-hailing heavyweights Uber
UBER,
-2.19%

and Lyft
LYFT,
+0.71%

and delivery giants Grubhub and Instacart began making shared rides and meals available with a few taps on a smartphone, they transformed the way people work, travel and get food delivered to their homes.

But the pandemic shuffled the deck for the so-called gig economy as fear of contracting the coronavirus led many who once traveled in shared vehicles to stay home, and grocery delivery services struggled to keep up with demand from people who didn’t want to risk stepping into a store.

A new survey from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research shows how consumer attitudes about using ride-hailing and delivery services have changed. It also highlights a wealth divide, where Americans with higher incomes are able to utilize the services to help reduce their risk of infection.

“People are worried. We know that,” said Dmitri Koustas, an assistant professor at the University of Chicago Harris School. “They’re worried about themselves and their families, and they’re concerned about the virus, and they’re also worried about workers.”

Among the people who used ride-hailing before the crisis, 63% said they have not taken a ride since March. At the same time, people with higher household incomes had more groceries delivered to their homes.

Those with household incomes about $100,00 a year were roughly twice as likely to have increased their use of grocery delivery services than those in households earning less, the survey found. Overall, the percentage of people using delivery services remained about the same since the pandemic began, with those increasing their use balanced out by those cutting back, in some cases because of cost.

In Auburn, New York, few grocery stores offer delivery, and those that do are more expensive, said Patricia McAvaney, 49, who is disabled and living on a fixed income of $920 a month. She’s not comfortable going to the grocery store, but feels she has no choice.

“I’m on a budget, so it’s really not feasible to get everything delivered from that store,” McAvaney said.

Many Americans have been uncomfortable with delivery services during the pandemic. About 6 in 10 say they are very comfortable picking up food from a restaurant, compared with about 3 in 10 using delivery. Roughly another 3 in 10 said they are uncomfortable getting food delivered.

George Hunter, a 60-year-old antique dealer in Kent, Washington, said he went out to restaurants three or four times per week before the pandemic. But he’d rather cook his own food than order in, and he prefers to pick his own produce at the store.

“I did a lot of my appointments in restaurants, and it was a treat, to go out and have somebody bring me coffee and do the dishes,” Hunter said. “It’s no longer a treat. I’m in the house. It doesn’t make sense to me.”

A majority — 54% — said they feel uncomfortable using a ride-hailing service during the coronavirus outbreak, preferring their own cars for travel. A similar percentage were uncomfortable with taxis, public transportation and air travel, suggesting people are shying away from all forms of transportation where they share space with others.

Thomas Sorenson, a 63-year-old handyman, used ride-hailing when he went out with friends before the pandemic. But they no longer get together, and he takes care of his elderly mother, so wouldn’t risk infection by using ride-hailing services.

Karena Mazur Israel, 52, said she would be more comfortable riding in long vehicles such as buses, station wagons or limousines.

“On the bus, if you’re feeling like you can’t socially distance, you can get off of the bus and transfer, and wait until the next bus to come around,” she said.

The changing sentiments on ride-hailing and delivery are reflected in recent earnings for companies in those spaces.

Uber and Lyft lost a combined $2.2 billion in the second quarter as people shied away from their services. Bookings in Uber’s mobility business declined 73% and the company laid off a quarter of its workforce. Uber’s food delivery business more than doubled its revenue compared to last year, but it didn’t turn a profit. In April, Lyft’s rides were down 75% compared to the same time last year, and the company said it was laying off 17% of its workforce.

Grubhub’s average daily orders jumped 32% in the second quarter as diners ordered in, but it lost money as it spent heavily to prop up struggling restaurants and protect drivers.

The survey also weighed concerns for gig workers. Democrats were more likely than Republicans to express a lack confidence in safe working conditions for ride-hailing and delivery drivers. Overall, 35% of Americans favored government regulations to increase wages and benefits for drivers.

Support grew somewhat — to 42% — if the cost of services were to increase 5% to ensure better benefits and wages for gig workers. But support dropped to 22% if it would lead to a 25% increase in the cost of such services.

Mazur, a stay-at-home mom who says her household income is around $150,000, said she would be willing to pay a few dollars more. “I used to waitress and I used to do these kinds of jobs, so I definitely feel for the workers,” she said.

Hunter, the conservative antique dealer who makes about $60,000 to $70,000 a year, would not.

“If the companies don’t pay enough money, people will leave,” Hunter said. “And if you keep artificially paying people higher wages, it shows up in your economics.”

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Ed Willing: Gig workers in Wisconsin deserve portable benefits | Column

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NerdWallet Rideshare Insurance (copy)

Through methods such as contributions from workers and their respective companies, consumers or the government, portable benefits would revitalize our antiquated social safety net and protect the flexibility that we depend upon every day.




This last year has undoubtedly been hard on Wisconsin and the rest of the country, as we’ve seen record high unemployment rates in response to the COVID-19 pandemic. Because of these trying times, many Wisconsinites have turned to app-based work to keep their heads above water.

Though I started driving for Uber in Milwaukee two years ago, during the pandemic I have a firsthand view of how app-based platforms bring positive change by both providing jobs to those in need and helping people in our communities. Whether someone needs a ride to work or groceries delivered to their families, app-based workers use platforms such as Uber and Instacart to help those around them.

One of the main reasons I decided to work in the gig economy was the flexibility it offers. I can make my own schedule each day, and I have experienced freedom that no other job has ever been able to provide me. As a single dad trying to get by during the pandemic, that flexibility has been more important now than ever, because I have been able to balance my work life with my son’s virtual schooling.

As someone whose primary income comes from app-based work, however, I recognize a huge hurdle faced by some gig workers — the absence of a consistent benefits system.

Unlike many full-time employees, many gig workers don’t receive benefits like health insurance or workers’ compensation through their employers. Personally, I tried to hold out on health insurance as long as I could, but without a reliable, affordable way to obtain benefits, I eventually gave out and was forced to turn to a costly health insurance program.

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Gig Wage Founder Craig Lewis Aims To ‘Drive Economic Empowerment’ – Crunchbase News

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The gig economy has a champion in Craig J. Lewis.

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The Gig Wage founder started the fintech payroll company focused on gig workers and contractors in 2014. Seven years later, the Dallas-based company has raised $13 million in funding and found success in helping 1099 workers navigate their working world, Lewis told Crunchbase News.

The “gig economy” is a free market system in which organizations and independent workers engage in short-term work arrangements. It is estimated that more than 60 million people in the U.S. are gig workers, and that a majority of workers will be by 2027. Meanwhile, the MBO State of Independence study points out that full-time independent workers in the U.S. contributed $1.21 trillion of revenue to the economy.

Based on the current economic environment, Lewis expects this number to only increase.

Lewis spoke to Crunchbase News about the economy, its future and his push for more diversity in fintech. The following was lightly edited for clarity and length.

Craig J. Lewis, founder and CEO of Gig Wage. Photo courtesy of Jae Oates.

What was the driver behind starting Gig Wage?

Lewis: When we started in 2014, it was a different company, and then we pivoted. I read about the gig economy in a study that McKinsey did. Back then we had a different payroll technology, but it dawned on me in 2016 that we could solve the payroll problem for gig workers in a unique way. Our purpose, our North Star, is to drive economic empowerment. It’s not just about gig or freelance work, but to drive economic growth for companies, employees and shareholders. We are perfectly positioned to drive this in true value all the way up and down the gig stack by helping drive the efficiencies of how money moves — increased activity, more spending, saving and earning — the gig economy can be the catalyst. We are building the bank of the gig economy so they can bank the entire economy.

You wrote a guest commentary for us in January about using your Techstars Demo Day pitch time to advocate for investing in Black founders. What kind of response did you receive?

Lewis: The vast majority was positive. People were motivated by it. I think that type of dialogue and stand is needed more from people in the actual doing of the actual work. I don’t have to wait until I exit or pre-IPO, I am in it now, I have a good perspective and can take these bold stances. We can talk about this stuff now; so what if people get uncomfortable? There are more conversations to be had this year.

What was the driver for you to do that?

Lewis: It was a knee-jerk reaction to the death of George Floyd and people talking about waiting on the investment community to figure it out. It is going to take time and it might not happen. Black entrepreneurs and investors will enter and make it happen for ourselves. Our excellence and brilliance will be funded. We are an undeniably great investment opportunity, but it has to be driven by entrepreneurs. Venture capital is phenomenal for wealth creation, but the foundation is already built and set. I get a lot of decks asking for money from emerging funds, Black investors raising funds and helping them get access to limited partners, so there is a lot of activity there. The driving factor is entrepreneurs. If anything is going to happen, it is going to be on entrepreneurs. I call out to Black entrepreneurs to continue to be bold and audacious. Our job is to go out, tell our narrative, get them funded and get customers serviced. If you depend on investors, it is never going to happen. If it doesn’t happen, I am going to be beating a lot of pots and pans to make it happen.

Having been around for seven years, how have you seen the fintech sector change during this time?

Lewis: Fintech is phenomenal and an intersection of finance and technology, and it is in the early innings. I have been in payroll and payments for 10 years, diving in as an entrepreneur since 2014. The peaks that are going on, like crypto, ICOs [Initial Coin Offering], headless banking, but I’d love to watch when chatter dies down because that is when innovation happens. It’s exciting to see Black entrepreneurs get into this space. With more Black, brown and woman entrepreneurs at the table, the better it is for the overall consumer. If you think of who is underbanked and who has experienced the problem, the more diversity there is in fintech will help the narrative.

The global pandemic forced many people into unemployment. What does the future hold for gig and 1099 workers?

Lewis: I’m excited about this opportunity. It is not perfect by any means, but meets you where you are. There is opportunity for improvement. Technology is driving behaviour, and legislation is going to catch up. At least, I hope it will — it is not perfect, but it is absolute, so let’s improve and not make it what work used to be. We need a hybrid between a social safety net and what is traditionally tied to employment, such as access to new benefits. People are already getting paid in new ways. This is an exciting time to be in on it.

Illustration: Dom Guzman


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Gig worker rights battle moves to Toronto

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The battle for gig worker rights has come to Canada, where the Canadian Union of Postal Workers (CUPW) has launched the Gig Workers United campaign. It is the latest in the global movement to increase wages and improve working conditions for gig workers who rely on app-based companies for employment.

“We have to stand up for ourselves — the streets don’t look out for us, the apps don’t look out for us, so we’re looking out for each other and collectively calling out a bad business model,” Narada Kiondo, one of the courier spokespersons for Gig Workers United, said in a statement announcing the organizing effort. “The way it is just can’t continue — if the gig economy is going to work for our society then it can’t be based on squeezing delivery workers and restaurants for profit and dodging our labor standards. And we’re going to persist, and we’ll win, because our bodies and our livelihoods are on the line.”

The roots of the organizing effort were in a similar effort two years ago. The Justice for Foodora Couriers worked to unionize delivery app Foodora couriers. The German company expanded to Canada in 2015. Foodora claimed that couriers were independent contractors and not entitled to form a union. On March 4, 2020, the Ontario Labor Relations Board ruled that Foodora couriers were “dependent contractors” and therefore could unionize.

On April 27, 2020, Foodora announced it was closing its Canadian operations.

Jan Simpson, national president of CUPW, said the lessons from the Foodora fight are that gig workers have rights to unionize.

“The couriers have shown that traditional union organizing is possible in this space. But they’ve gone farther than that, with community-organizing tactics and collective mutual aid. They’ve formed a worker-led organization that we’re proud to support because their fresh energy and ideas are what it takes to improve working conditions and reject Silicon Valley’s model of exploitation,” Simpson said in a statement.

The battle for gig worker rights is expanding across the globe. Earlier this month, a court in the U.K. ruled Uber Technologies (NYSE: UBER) drivers in London were entitled to minimum wage, essentially making them employees. Uber had appealed a lower court ruling, but the U.K. Supreme Court rejected its argument, saying it was “clear … that claimant drivers were workers who worked for Uber London under ‘worker’s contracts.’” It also said the fact that an Uber driver could turn down work “is not fatal to a finding that the individual is an employee … and does not preclude a finding that the individual is employed under a worker’s contract.”

Read: Prop 22 wins in California; takes Uber, Lyft and other drivers out from under AB5

The nature of the relationship between Uber and its drivers means that the drivers “have little or no ability to improve their economic position through professional or entrepreneurial skill,” the court wrote. “In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.”

In the U.S., much of the fight over the status of gig drivers has taken place in California, where voters passed Proposition 22 in November with 58% of the vote. Prop 22 removed Uber, Lyft, DoorDash and other gig drivers from compliance with Assembly Bill 5 (AB5). That bill required companies to treat the drivers as employees.

Prop 22 did include certain provisions for drivers, including new earnings guarantees and health-care stipends among others, but it allows the gig workers to remain independent.

Click for more FreightWaves articles by Brian Straight.

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