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Lessons from the gig economy for transforming public services



Even before the arrival of the coronavirus pandemic, major upheavals were taking place in the UK labour market. Between 2016 and 2019, the number of people working for online platforms such as Deliveroo and TaskRabbit doubled from 4.7% of the adult population to 9.6% – the equivalent of 5.5 million people. Lockdown caused these trends to escalate still more sharply as a housebound population switched en masse to ordering goods online.

For many, the growth of the platform economy is cause for concern. But I believe the principles of platform technology could be used by governments to transform the way public services are delivered, taking advantage of the way that they efficiently connect users with the services that they want. Under municipal control, or through public-private partnerships, platforms could transform service delivery to citizens.

Colleagues and I surveyed 28,000 people across Europe in our research on the platform economy. In the UK, we measured changes between 2016 and 2019 not just among those working for platforms but also their customers. During that period those using online apps for taxi services rose from 15.6% to 30.6%, while those using online platforms for household services (such as cleaning, gardening or household repairs) went up from 23.8% to 31.4%.

One big surprise was the profile of these customers. Expecting to find a picture of the better-off having their needs supplied by poorer people, we actually found a much more universal distribution across income brackets. Although 44% of the richest quarter of the population used platforms, so did 30% of people with middling incomes and even 22% of the poorest quarter.

Furthermore, people working for online platforms were also very likely to be customers for them too. In 2019, while 31% of the population used app-based taxi services and 5.2% worked to provide these taxi services, no less than 4.8% of the population were both taxi users and drivers. Similarly, while 31% bought online household services and 5.5% worked to provide them, 4.9% were doing both.

Vicious cycle

What seems to be happening is that people are turning to apps to obtain services they have no time to carry out for themselves: ordering a meal from Deliveroo or Uber Eats because they are too tired to cook, or paying for household chores they have no time to do for themselves.

But that leaves them even more short of cash, giving them an incentive to look for extra work, which they may well find with an online platform – work that is generally both precarious and poorly paid, leaving them with even less free time. Online platforms are part of a vicious cycle in which time poverty chases money poverty. This has been exacerbated by the effects of austerity, which has deprived people of many services they relied on in the past, ranging from respite care to meals-on-wheels, creating even more demands for housework.

Frowning woman looks at phone.
Time-poor and stressed, we turn to apps to provide basic services.

Online platforms are often seen as villains: depriving workers of basic employment rights and security while giving little back to local communities. Expert tax avoiders, they leave it to others to pay for infrastructure, training and health. Very little of the 20-25% cut of the value of each transaction they typically take ends up in the local economy. Instead, complex international tax avoidance schemes result in most of the profits disappearing overseas.

Reinventing the welfare state

But what if platform technologies could be used to reverse this vicious cycle? Might they help to build new kinds of digitally-managed services in a 21st century version of the welfare state that has become so battered in recent years? Could they be the key to developing new models that promote better work-life balance and improve working conditions for gig workers while also contributing to the reduction of waste and addressing the climate emergency?

I discuss ways that locally-controlled online platforms might be able to do just that in my new book, Reinventing the Welfare State. For example, the kinds of algorithms that connect workers with customers at short notice could be used to supply social care in response to the real needs of clients rather than the existing rushed and rigid predetermined 15-minute care slots. Or they could be used to provide transport to get patients to hospital appointments or children to school and give people fresh nutritious meals at home, combining free services to those who are eligible with paid-for ones, using voucher systems.

Platform technology could also help make a reality of sustainable food strategies, like this one in Bristol. Local producers could use the platform to supply food to hospitals and schools, leftover perishable food could be delivered to food banks and new food businesses could be encouraged. You could even use them to share surplus produce from your allotment.

Democratically controlled and responsive to local residents, platforms could provide a way to give workers decent jobs and citizens the services they actually want, when they want them.

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Gig economy: California Appellate Court affirms Uber and Lyft must reclassify California drivers as employees




By Jack Schaedel and Jamin Xu, Firm:  FordHarrison

Uber and Lyft will be required to reclassify drivers and riders previously considered independent contractors as employees following a ruling from a California appeal court affirming the preliminary injunction that imposed this obligation on 10 August 2020.

On 22 October 2020, a California appellate court affirmed a preliminary injunction requiring Uber and Lyft to reclassify California drivers from independent contractors to employees and to comply with the California Labor Code, the Unemployment Insurance Code, and the Industrial Welfare Commission wage orders, as requested by California State Attorney General Xavier Becerra and the City Attorneys of Los Angeles, San Francisco, and San Diego. A further discussion of that original 10 August 2020 San Francisco Superior Court’s original 33-page decision can be found here.

Summary of the Order

The appellate court unanimously sided with the Superior Court in holding that the State and city governments are ultimately likely to succeed on the merits in arguing that Uber’s and Lyft’s drivers are employees, not independent contractors, under the rigorous ABC test set forth under California Assembly Bill 5 (‘AB 5’).

AB 5, which took effect at the beginning of 2020, codified the test to determine whether a worker can be classified as an independent contractor set forth under the California Supreme Court case Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903, which presumes workers are employees unless an employer can establish three factors:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Click here for a full discussion of Dynamex.

Because Dynamex was issued over two years ago, the Court reasoned that companies like Uber and Lyft, who utilise independent contractors as a significant portion of their workforce, have had significant time to contemplate how they can proceed with reclassifying workers as employees. Therefore, the Court reasoned that requiring Uber and Lyft to comply with the preliminary injunction would not result in irreparable harm. On the contrary, the court specifically affirmed the trial court’s reasoning that:

‘rectifying the various forms of irreparable harm shown by the People more strongly serves the public interest than protecting Uber, Lyft, their shareholders, and all of those who have come to rely on the advantages on online ride-sharing delivered by a business model that does not provide employment benefits to drivers.’

Therefore, the Court required Uber and Lyft to comply with the San Francisco Superior Court’s preliminary injunction order beginning 30 days after the Court issues its forthcoming remittitur of the appeal.

Likely impact and Proposition 22

Although the legislature has recently enacted exemptions for certain types of workers, including certain writers, musicians and artists, as well as individuals providing certain ‘professional services,’ from the AB 5 test (see here), this most recent decision signifies that under the current ABC test, Uber’s and Lyft’s drivers are unlikely to be able to remain as independent contractors, in the absence of subsequent intervention from the legislature or the passage of Proposition 22 on California’s ballot initiative this November (see here for details of Proposition 22).

However, employers should keep in mind that even the passage of Proposition 22 is unlikely to provide their specific businesses with exemptions from AB 5, as it is intended to apply specifically to ride-hailing companies so that their drivers can be classified as independent contractors in exchange for increased worker protections such as guarantees in minimum earnings, expense reimbursements, healthcare subsidies and insurance coverage for on the-job injuries.

Furthermore, this decision signifies that a government enforcement action brought by the state and local governments of California will be able to seek compliance with AB 5 through the use of preliminary injunctions even at the early stages of a lawsuit, while the case is ongoing.

If a preliminary injunction is granted, employers could find themselves having to provide workers, on very short notice, all benefits commonly associated with non-exempt employees in California, including minimum and overtime wages, meal and rest period premiums, reimbursements for business expenses, sick leave, workers’ compensation coverage, unemployment insurance, paid family and sick leave, and wage replacement programs like disability insurance. Employers could also find themselves having to pay taxes and penalties on very short notice.

Additionally, even if Proposition 22 or any other legislative exemptions pass in the near future, their effects are unlikely to be retroactive. Therefore, entities who use independent contractors may continue to be exposed to legal liability through government enforcement mechanisms and/or class and representative Private Attorneys General Act (‘PAGA’) actions.

Businesses utilising independent contractors are advised to continue to track legal developments and consult with experienced labour and employment counsel to evaluate the continuing viability of this classification for their specific business.

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Cardinal Nation happy for Tony La Russa’s new gig




ST. LOUIS – Former Cardinals skipper Tony La Russa is returning to manage the Chicago White Sox. La Russa and World Series wins are no strangers here in St. Louis.

Cardinals broadcaster Mike Claiborne, a La Russa friend, believes the Hall-of-Famer will do well in Chicago.

“He’s got a good team to work with; some good young talent. They need a little leadership,” he said.

The White Sox and Cardinals are expected to meet in interleague play next season.

“Everybody wanted to see Tony do well,” Claiborne said. “And I want to see him do well, except when he plays the Cardinals.”

Claiborne said he texted Tony and congratulated him. Tony replied: “It should be fun.”

At Ballpark Village, there was well-wishes from fans.

“He’s a good guy,” said Armando Sierra. “He’s done good for baseball and for him to get another chance, why not?”

La Russa, 76, managed the Cardinals from 1996 to 2011.

“You’re never too old; you’re never too old,” Sierra said. “That’s just a number.”

Down the street at the Midwestern, more well wishes from Cardinal supporters who believe La Russa will get a warm welcome when the White Sox play at Busch Stadium.

“Probably get the reaction that (David) Freese got when he came back; everybody cheered for him,” said Cardinals fan John Pizzitola.

Claiborne added: “Warm would be an understatement. It will be seismic for sure.”

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A new app helps gig workers find where to whizz




As businesses tighten entry restrictions because of the pandemic, delivery and ride-share drivers are struggling more than ever to find open and usable restrooms. An app, playfully named Whizz, is trying to help. Described as being developed “by gig workers for gig workers,” Whizz is a bathroom finding app that is partnering with restaurants to provide gig workers with some much-needed relief.

The app displays partnered restaurant locations on a map, currently limited to Southern California and some locations in Arizona and Nevada. Users pick a nearby restaurant and show an employee their phone to gain access to their bathroom. While several public bathroom finder apps already exist, Whizz’s strategy is different in that it’s seeking partnerships with restaurants to provide not only bathroom access, but also deals for users of the app.

Whizz attempts to incentivize restaurants with free advertising in exchange for bathroom access and promotional offers. When you pull up a partnered restaurant in the app, it displays a coupon for a certain percentage off an item or meal. Whizz’s first partnership is with Waba Grill, a rice bowl chain, which offers 20 percent off a chicken bowl and drink through the app.

This interest in partnerships is what makes Whizz’s approach potentially more effective than other bathroom finders, which tend to rely on public bathrooms or large stores like Walmart or Target. Co-founders Keith Crudupt and Robert Logan, who have both driven for Uber, noted that delivery drivers are often denied restroom access, even at restaurants they’re running deliveries for. Logan said he always found this dynamic bizarre: “I’m helping your business, but you won’t let me use your restroom.”

“By partnering with restaurants, our users don’t have to come in and feel like they’re trespassing or doing something sneaky,” Logan said. “They can come in and just be straightforward and go use the restroom.”

Bathroom access is a problem that extends far beyond gig workers. Lack of access to clean, private restrooms has always been an issue for people experiencing homelessness, which has been exacerbated by the pandemic. There’s also the problem of finding accessible restrooms for people with mobility aids and gender-neutral or single-occupant restrooms for trans and gender-nonconforming people. Truly public restrooms are few and far between, and among those that exist, it’s even harder to find ones that are hygienic and in full working order.

Though the app was developed with gig workers in mind, it doesn’t verify that you are one, and Whizz’s site also pitches its usefulness for travelers and “soccer moms.” Because anyone can download the app, would a person who is homeless be allowed access to a restaurant’s bathroom if they showed their phone, or would they still be turned away depending on their appearance? Logan and Crudupt said their main focus has been on gig workers because they’ve been drivers themselves, but they are “open to being a resource for homeless people.”

Logan, who has a background in social work, says he has a desire to help the community at large. The app’s launch had actually been tabled when the pandemic started, but after seeing articles about gig workers urinating in alleys, Logan and Crudupt realized “there’s a need and we should help out.” They’re working on the basics of the app’s function for now, but they have ambitions for gaining more partners and expanding their map beyond the Southern California area. They eventually want to update the app with information about parking, hours, wheelchair access, and changing tables.

The two have been personally traveling to each location on the map, including nearly 200 Waba Grills, to ensure its accuracy. They noted that in addition to the struggle of balancing jobs with app development, it’s hard for them as a Black-owned business, and as older men, to get recognized and raise funds for the app.

“Can I use your restroom?” shouldn’t be a question that anticipates hurdles. By adding the legitimacy of a business partnership, Whizz has the potential to help people who might otherwise be turned away. As Vice points out, this is a problem that needs a societal solution. But for now, there’s Whizz.

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