Become an employee with full paid benefits, or remain a mostly independent gig worker? That debate’s raging in California as November’s general election approaches, and its outcome is likely to affect the entire country.
According to The Washington Post, “Uber, DoorDash and other gig economy companies are bombarding TV airwaves, social media and even their own apps with ads and marketing materials promoting a ballot initiative [Proposition 22] that they say would improve drivers’ financial situation and working conditions but that would also deny them the right to be classified as employees in California.”
Proposition 22 would give gig workers limited benefits and wage and worker protections, but establish them as an independent class of workers – and undo a 2019 California law, Assembly Bill 5 (AB5), that “would guarantee drivers access to the minimum wage, employer-provided health care and bargaining rights.”
I’ve long been self-employed, with the exception of some recent cybersecurity consulting contracts in which I was paid as a full-time employee with benefits, but that’s been my choice.
Being fully self-employed is not for the faint of heart. Besides cybersecurity consulting and writing a newspaper column, I have an apartment-rental business. I recently earned a real estate license and am selling properties, too.
I manage my own invoicing and taxes. I know to the penny – once my CPA explains it to me and I drop whatever mug of coffee I’m holding – how high my income taxes are. Few employees are aware of how much they pay in taxes or what their benefits cost their employers – which would be helpful to know before voting for new government policies that will increase both.
I manage my own health-care insurance, which has gotten plenty expensive in recent years for individuals who don’t qualify for subsidies, in part because of government attempts to expand health insurance to everyone.
But, again, I choose to be self-employed. I like the freedom it provides. But it also makes me keenly aware of the unintended consequences of government regulations and policies.
California’s 2019 AB5 law would require Uber, for instance, to hire drivers as full-time employees with health insurance, paid sick leave and other benefits. Benefits are wonderful, but come at a price.
Uber claims that “if the company were forced to make all drivers across the country employees, for example, it could only support 260,000 full-time roles,” reports The Post. “That compares to 1.2 million active drivers the company was hosting on its app before the coronavirus pandemic.”
Uber also says fares would increase and drivers would be less available and timely – which means you might have to wait a while for your ride home to arrive after a night of enjoying the pub.
What it comes down to is that some politicians believe individuals shouldn’t have the freedom to exchange their skills and services for money from organizations, because organizations take advantage of those individuals. Joe Biden and Kamala Harris support AB5, not the watered-down Proposition 22.
Others think that in a free society, individuals should be able to offer their professional talents to anyone willing to pay for them, and government shouldn’t restrict the terms they negotiate. President Trump’s campaign supports that approach and is critical of AB5 (but has not, to my knowledge, supported Proposition 22).
That’s something else to think about when you vote in November’s election.
Tom Purcell, author of “Misadventures of a 1970’s Childhood,” a humorous memoir available at amazon.com, is a Pittsburgh Tribune-Review humor columnist. Send comments to Tom at Tom@TomPurcell.com.
Firms may hire 35% more gig workers this festive season
Staffing and recruitment firms Adecco, Randstad, Manpower, Quess, CIEL HR Services and
told ET that most companies in these segments are bullish about an uptick in festival-season demand led by a rebound in consumer confidence after the ebbing of the second Covid-19 wave.
The demand for more hands is expected in the delivery, logistics, warehouse, sorting and packing segments, they said.
Ecommerce and logistics players are seen hiring more to meet the expected surge in orders.
Yeshab Giri, director of staffing at Randstad India, said seasonal hiring of temporary staff in 2019 was 15% higher than in 2018, while in 2020 the growth was 20%, largely due to demand from tier 2 & 3 cities.
“The year 2021 has seen a surge in demand for new temp staff, which is likely to be close to 35% higher than last year, as most offline retailers have gone digital,” said Giri.
Hiring of ‘last-mile’ workers may even top 35% if India is able to contain or prevent the much-feared third Covid-19 wave, said experts.
According to Alok Kumar, senior director at Manpower, more than 300,000 job vacancies are expected to be created by companies in ecommerce, logistics, consumer durables and the lifestyle products segments during this year’s festival season.
This could also push up variable pay this year, according to experts. “Primarily due to increase in the fuel cost and the surge in per day delivery numbers, the variable earnings per delivery have gone up, which is benefitting the front-line executives,” Kumar said.
Salaries, too, are expected to increase –from Rs 18,000 per month, including all benefits, to more than Rs 20,000–said Rituparna Chakraborty, cofounder of TeamLease Services.
“Festive sales are expected to register a 40% growth over the previous year, driven by purchases from tier 3 and 4 cities,” Chakraborty said.
Lohit Bhatia, president of Workforce Management at Quess Corp., pegged the demand for temporary workers at 30%, but said the number may rise given that ecommerce and logistics companies are hiring more than before.
According to Aditya Mishra, CEO, CIEL HR Services, the variable pay volumes may go up by 20% this year. In comparison with others, CIEL is experiencing a more bullish demand of about 50% from its clients.
“There is a rise in demand for delivery partners, picker/packers, store promoters, logistics staff, field sales executives, customer care executives and more,” said Manu Saigal, director, general staffing, Adecco India. Saigal put the expected growth in seasonal hiring at 20-30%.
Last year, Amazon and Flipkart had together created 170,000 seasonal jobs around the festive season. These companies, along with Myntra, confirmed that they are hiring aggressively this year, too, to prepare for the expected surge in online shopping.
“The hiring will be in line with business and festive months which have traditionally seen increased hiring every year,” said a Flipkart spokesperson. From March to May alone this year, Flipkart has hired over 23,000 people across the country.
Its rival Amazon is also gearing up for the season. “This year too, we will welcome seasonal associates…as they join more than tens of thousands of our associates at fulfilment centres and delivery network,” said a spokesperson for Amazon.
Gig Workers in Limbo Amidst California’s Reopening
Almost a year after Uber acquired Postmates for $2.65 Billion dollars, they have decided to get rid of Postmates’ Fleet application. In May of 2021, Postmates began warning its Fleet drivers to switch over to UberEats by June 7. Past that date, drivers would no longer be able to complete deliveries unless they were registered with UberEats. But the switchover has not been so smooth. Multiple drivers have experienced delays in the re-registration process, resulting in drivers losing income or their ability to continue working for these companies as California is reopening and still going through COVID-19 pandemic.
As I am writing, my registration to work for UberEats is yet to go through, joining a backlog of drivers’ requests that are still pending. I had been working as a driver with Postmates since May of 2019. Working for most of that summer was enough to experience the exploitative working conditions drivers face everyday. Coincidentally, that summer I got an internship with a local union in Los Angeles, SEIU 721, to organize drivers with the Mobile Workers Alliance, a campaign advocating for the rights of gig workers at the legislative level.
During the day I would talk to drivers on the phone, or at parking lots, to canvas in support of AB5, a law that requires app-based companies to reclassify their drivers as employees rather than independent contractors. I’d encourage drivers to demand for better working conditions and benefits like healthcare and a higher wage. At night, during dinner time, I would confirm what drivers would go through by doing the work myself, doing food delivery — from the lack of driver support, wasted mileage, and wear and tear of my vehicle, to a detrimental state of mental and physical health for an average of $6 dollars per order before tips. Working a part-time night shift could range from $40 to $70 dollars, per night. It was enough to barely survive for three months, and after that, I stepped away from doing deliveries for as long as I could.
By January, 2020, AB5 went into effect, but the gig companies refused to comply. Then, the COVID-19 pandemic forced drivers to face new challenges. All delivery and rideshare drivers were considered “essential workers,” but the companies did the bare minimum to keep their drivers safe.
Two months after Los Angeles went into full lockdown, drivers received an email from Postmates informing us that we were eligible to claim a protective face mask that would be shipped cost-free. About a week later, I received a medium-sized envelope in the mailbox. When I opened it, I took out a single, almost see-through, piece of black fabric with two holes on both ends. This slim piece of cloth was the protective gear that would prevent us from contracting COVID-19… and that was it. Nothing else came in the envelope, not even a letter of appreciation, or a “stay safe” message. In fact, if we wanted a hand sanitizer, gloves, or disinfectant spray directly from Postmates, we would have to buy each item (or get them all in a bundle for $25).
The working conditions had worsened and I was hesitant to do this work again, but it was the only job that was flexible enough to get me by, just like thousands of people who had lost their jobs due to the pandemic and turned to app-based work for their main source of income.
Karla Flores had been in the US for about a year when she started driving for Postmates during the pandemic. She delivered in areas like Hollywood and Beverly Hills where she could pick up more orders with bigger tips. That was until she couldn’t put off the switchover with UberEats by June of 2021. This change was communicated to drivers via email or when they logged into the app to start working. So far, consumers have not been made aware of the changes.
“There was a message that appeared on the app,” Karla said. “I refused to re-register until the last minute, but I haven’t been able to do any work because the app blocks me from doing any deliveries.” Since May, she’s been waiting on her application’s approval and has tried several times to reach out to Uber, but hasn’t heard back yet.
“I’m in the same limbo that I was in when I first started working with Postmates.” She was referring to the first time she signed up as a delivery driver, when she had to wait two weeks to start working because her background check was not going through. Once it did, she realized none of her payments were being deposited to her bank account. “It took about a month to get in contact with someone so they could pay me.”
Karla is a mother of two daughters and holds a degree in Business Administration from El Salvador. She said that she is familiar with the business models of these companies — specifically, she got very familiar with working for Uber as a driver in her home country. It sustained her enough to pay bills, but it was a job where she was risking her life. On one occasion, she picked up a client that took her to an area known for having gangs. When she got them to their destination, they held her at gunpoint and stole most of her belongings. There were men surrounding her car, and one of them told her she was lucky she wasn’t dead. Though she was safe after the assault, there was no one that she could report the issue to. Incidents like these occur daily around the world, but tech companies are not held responsible for what happens to drivers while on the job.
Now in the US, Karla is far from her two daughters (who still live in El Salvador). While her Postmates gig is on hold she can rely on working with Amazon Flex, a program that allows individuals (classed as independent contractors) to use their own vehicles to deliver packages. Whenever she’s out to work, she sends her location to her partner and her family. It’s a job that Karla already has experience with and feels is safer than having to deal with clients in her vehicle. Drivers are technically employed by third-party companies, referred to as delivery service partners. They are not guaranteed the same wages or benefits that Amazon warehouse workers receive and Karla knows this, which is why she’s in favor of drivers unionizing for better working conditions.
Similarly, Jorge Vargas, an Angeleno that has worked with several rideshare companies and has seen the gradual presence of the gig economy since the 90s, said he worked with Postmates until they blocked his account in 2019. Late at night around the Silver Lake area, he’d gotten a call from someone at Postmates to pick up an order at Tommy’s. “It felt like they were testing me,” he said. When he picked up the order and took it to his car, he received another call to park and not to deliver the order he had just gotten. After that, they claimed they detected fraudulent activity on his account, claiming that someone else was using it. Since then, he’s not used the app to do any deliveries.
On top of that, he never received a bonus payment of $25. Drivers are usually given monetary incentives to meet a delivery quota. “You may say it’s not much, but if they’re doing this to other drivers, just think how much is that if they did it to 1,000 drivers? How much money are they stealing?” asked Vargas.
From doing this work myself, I know these quotas are very hard to reach, especially if you’re driving long distances like in Los Angeles. The quotas could change month to month or even weekly. One day it could be nine deliveries within a five-hour period and you get a $70 dollar bonus, and the next day it could go up to 13 deliveries.
Lately, Jorge delivers with GrubHub where he’s gotten a dismal amount of work — often having to drive long distances while earning less than what it used to pay. He’s also a driver for Roadie, which delivers packages like sports gear, Home Depot supplies, pharmaceuticals, etc. He’s noticed a pattern of gig-apps using the same business model that will then disrupt other industries. It’s possible that workers’ conditions could worsen if they were to be turned into independent contractors and companies find loopholes to refuse them benefits.
In November 2020, Proposition 22 was added to the California ballot in order to “let the voters decide” how companies should classify their drivers while tech companies spent nearly $187 million dollars to influence voters’ decisions. Prop 22 exempts app-based drivers from AB5, allowing companies that want to hire “independent contractors” to continue their traditional business model. In November, 59% of California voters said “yes” and, almost immediately, drivers were hit hard with the new regulations. But the organizing efforts to overturn the carve-out law are still going strong.
Currently, there is a pending lawsuit that challenges the constitutionality of Prop 22. The lawsuit was filed by SEIU along with two drivers and two advocates — consumers of the platform. According to Wendy Knight, research and policy analyst for local union SEIU 721, the lawsuit was filed in the Supreme Court first at the beginning of the year, but the court refused to hear the case. It didn’t bar them from pursuing litigation in the lower courts, so they filed a lawsuit against the state of California in a lower court in Alameda County.
If the ruling favors SEIU — and Prop 22 were to be overturned — AB5 would then be enforced to the fullest extent of the law. “At this point it is in the judicial system’s hands,” said Knight, “We are putting our best foot forward with our legal team, but it depends on the judges’ ruling.”
In the meantime, organizers like those in the Mobile Workers Alliance in Los Angeles are continuing to mobilize drivers, digitally or on the ground. They continue to raise an awareness of the many issues going on in the rideshare industry, among them the issue of high delivery fees for restaurants, or the guarantee of a healthcare stipend for all drivers — one of the promises made by gig companies with Prop 22.
In spite of these new promises made after Prop 22, drivers haven’t felt like much has changed, especially if they are experiencing the same issues. Ana Barragan, from South Central, has been an Uber and Lyft driver for the last four years. She said that while working during the pandemic, she couldn’t use any public bathroom due to COVID restrictions. Her body developed kidney stones, which she had to be hospitalized for. She had to pay out of pocket, without any financial support from the companies she drove for.
Or there is the case of Julian Perez, from Huntington Park, who works 10–12 hours a day and is 61 years old. He began working for Uber after his job in the stage conversion team at the Staples Center came to a halt. During the elections, he made calls at various events with the MWA campaign, urging people to vote “No” on Prop 22. He joined the union after he had an accident on the freeway while he was using Uber. Someone rear-ended his car. He and the client were fine, and the car had only minor damage. When the incident was reported, Uber offered him their insurance plan, which would cost him $2,500 to fix the damage. When he refused to take the offer, Uber blocked his account, leaving him to switch over to Lyft and continue working with a new vehicle.
As a legislative change is an ongoing battle, gig drivers are not giving up. Standing in solidarity with fellow co-workers goes a long way, even if not all drivers will reap the long-term benefits. “Some of these drivers don’t get it, not everyone is having the same experiences when they drive,” said Jorge Vargas. “Their mindset is just in earning, whether I benefit from it or not, we should stand in solidarity for our co-workers to better our working conditions.”
As for my re-registration to work for UberEats, I am on a waiting list for UberEats, DoorDash, GrubHub, and Shipt. The shutdown of one delivery company means that the rest of the companies will be more saturated. The last email announcement drivers received from Postmates was on July 9, 2021. It said, “as soon as 8/9, the Postmates Fleet app will go away. That means 30 days from now, you will no longer be able to access the Fleet app.”
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Gig Workers Are Increasingly Rated by Opaque Algorithms. It’s Making Them Paranoid.
These ratings help all kinds of businesses make decisions, like where to take risks and how to improve their operations. But how are ratings affecting the people who are being rated? New research from Kellogg’s Hatim Rahman suggests that despite these algorithms’ opacity—indeed largely because
of that opacity—they’re shaping people’s behavior in unexpected ways.
Rahman, an assistant professor of management and organizations, investigated the impact of algorithms in an online labor platform for freelancers. “There’s a lot of conversation about the future of work and what it will look like,” Rahman says. “These platforms are part of the next frontier.”
Like many sites that promise to connect freelance workers to paying clients (among them Upwork, TopCoder, and TaskRabbit), the one bearing Rahman’s scrutiny employed a complex algorithm to score freelancers. Potential clients could sort and select potential hires based on that score.
To find out how this opaque evaluation system was affecting the freelancers, Rahman joined the platform (which he refers to pseudonymously as “TalentFinder”) and conducted interviews with freelancers and the clients hiring them. He also parsed written communications from TalentFinder and posts on its freelancer discussion boards.
All of the workers he spoke with experienced ongoing paranoia about the possibility of a sudden and unaccountable score decrease. The way they responded to this fear was less dependent on the strength of their rating than on whether they’d previously experienced decreases in their scores—and, crucially, how dependent on the platform they were for income.
Traditionally, Rahman explains, scholars have described workplace evaluations as helping to tighten an “iron cage” around workers, because they allow employers to constrain behavior and set the standards of success. Algorithmic evaluations have a different, potentially undermining impact.
“Opaque third-party evaluations can create an ‘invisible cage’ for workers,” Rahman writes, “because they experience such evaluations as a form of control and yet cannot decipher or learn from the criteria for success.”
Of course, as Rahman points out, not only are many of us living in some version of this invisible cage—we also play a small part in shaping its bars. Every time we rate an Amazon purchase or a Lyft driver, we are potentially affecting others’ livelihoods.
“People using these platforms are largely unaware of the role they have in influencing these systems and its algorithms,” he says. “It just feels like a very transactional relationship.”
Making Evaluation Criteria a Mystery
“TalentFinder” is one of the largest platforms of its kind. In 2015, over 12 million freelancers were registered on the site, alongside 5 million clients based in over 100 countries. Clients could select from a wide range of gig workers, from assistants to marketers to software engineers.
When Rahman registered with TalentFinder to start his research in 2013, the platform rated freelancers according to a transparent system of project scores and overall scores. Upon completion of a project, clients would rate freelancers on a scale of 1 to 5 on a number of attributes, including “Skills,” “Quality of Work,” and “Adherence to Schedule.” Aggregating these scores resulted in an overall project score, and combining those project scores (weighted based on the dollar value of each project) resulted in an overall rating out of five stars, which was included in a freelancer’s profile.
As straightforward as this evaluation system was, it presented a problem for TalentFinder: freelancers’ ratings were too high across the board and lacked the differentiation that would make them helpful to clients. At one point, more than 90 percent of freelancers had at least four out of five stars, and 80 percent had a near-perfect rating.
The solution: an algorithm. Starting in 2015, freelancers were rated on a scale of 1 to 100, based on intentionally mysterious criteria.
“We don’t reveal the exact calculation for your score,” TalentFinder wrote in a public blog post three months after the algorithm’s introduction. “Doing so would make it easier for some users to artificially boost their scores.” After the implementation of the new algorithm, only about 5 percent of freelancers received a score of 90 or above.
To study the effects of the new evaluation system on freelancers, Rahman collected data between 2015 and 2018 from three sources: 80 interviews conducted with freelancers and 18 with clients; written communications, including over two thousand TalentFinder community discussion-board messages related to the algorithm and all of TalentFinder’s public posts on the topic; and his own observations as a registered client.
As Rahman culled through his interviews and written sources, he was struck by the consistency of the complaints he heard. All of the freelancers he spoke with experienced paranoia around possible sudden drops in their scores and ongoing frustration over their inability to learn from and improve based on score fluctuations.
“What surprised me the most was that the highest performers and most experienced freelancers on the platform didn’t necessarily gain any advantage in terms of figuring out how the algorithm worked,” he says. “Generally, those who do well in a system are able to figure out what’s going on to some extent. But in this context, even people whose scores hadn’t changed were very much on edge.”
Rahman observed two distinct reactions to this paranoia and frustration. One reaction is what he terms “experimental reactivity”—freelancers trying through trial and error to increase their scores, for example, by taking on only projects with short contract lengths or by proactively asking clients to send feedback.
The other reaction was when freelancers attempted to protect their scores through what Rahman calls “constrained activity.” Freelancers tried through various means to limit their exposure to the evaluation algorithm, sometimes asking clients they met on TalentFinder to move off the platform to communicate and make payments so that their ratings wouldn’t be affected. Others did nothing in hopes that this would preserve their rating.
Rahman isolated two main factors that determined which freelancers experimented, and which pulled back from the platform or simply did nothing: the extent of a freelancer’s dependence on the platform for income, and whether they’d experienced a decrease in their score.
This varied by whether a freelancer had a high or low score.
High-rated freelancers with high dependence on the platform chose their tactic based on whether they had seen a recent drop in their score. Those who had seen their score drop experimented with tactics to raise it; if their score had not dropped, they constrained their activity on the platform in an effort to protect their score. High performers with low dependence on the platform constrained their time on TalentFinder, whether or not they’d experienced a score drop.
For freelancers with lower scores, their dependence on the platform appeared to determine which path they took. If they depended on the platform, they engaged in experimentation even if scores continued to fluctuate. If they didn’t feel as tied to it for income, they gradually constrained their activity.
Rahman explains that the workers’ position feels more precarious on these platforms than in traditional work settings because, well, it is. While typical employer evaluations are largely meant to help an employee improve, the evaluations facilitated by an algorithm on a site like TalentFinder are primarily meant to help the platform automate the job of plucking the “best” workers from an enormous pool, thereby satisfying its clients.
“For the platforms, it’s about them optimizing their overall dynamics; their primary goal is not to help workers improve,” Rahman says. “For people’s day-to-day lived experiences, especially when they’re relying on the platform for work, this can be very frustrating and difficult.”
Living in the Cage—and Shaping It
Since conducting this research, Rahman says he’s increasingly clued into the various invisible cages within which most of us live. He points, for example, to recent reports detailing how everything from our TVs and vacuum cleaners to the smartphone apps we use for medical prescriptions
and car insurance are collecting our data and using it to train proprietary algorithms in ways that are largely invisible to us.
“I think that the invisible-cage metaphor applies more broadly as we are entering into this system in which all of what we do, say, and how we interact is feeding into algorithms that we’re not necessarily aware of,” he says.
He points out that some people are freer to withdraw from these platforms than others; it all comes down to their level of dependence on them. A fruitful area for future research, he says, could be in examining how characteristics like race, gender, and income correlate with dependence on platforms and their algorithmic evaluations. For instance, it’s important to understand whether individuals from certain racial groups are more likely to be “evaluated” (and potentially blacklisted) by algorithms before they can rent an apartment, open a credit card, or enroll in health insurance.
“The hope of bringing this invisible-cage metaphor to the forefront is to bring awareness to this phenomenon, and hopefully in a way that people can relate to,” Rahman says. “Of course, even when we become aware of it, it’s difficult to know what to do, given the complexity of these systems and the rate at which their algorithms change.”
Legislation is starting to provide some oversight in what remains a largely unregulated area. The 2020 California Consumer Privacy Act, the strongest such legislation in the nation, establishes online users’ rights to know about, delete, and opt out of personal data collection. In 2018, the European Union passed even more aggressive legislation to the same end. “It’s a heartening sign,” Rahman says, “but regulation alone is far from a panacea.”
Firms may hire 35% more gig workers this festive season
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