WASHINGTON (Thomson Reuters Foundation) – Tyrita Franklin-Corbett knew she was risking her health delivering groceries during the coronavirus pandemic, but she didn’t expect to be laid up by a dog attack.
Furloughed from her job as an auditor at a public accounting firm in May, the single mother of a 12-year-old son from Upper Marlboro, Maryland, started to take on more shifts with online grocery pick-up and delivery service Instacart.
Franklin-Corbett, 45, had been an Instacart “shopper” for several years to supplement her salary, but she never imagined the app-based work, with its wild swings in earnings and no health insurance or sick pay, being her sole source of income.
“It’s a gig, not a career,” Franklin-Corbett told the Thomson Reuters Foundation. “When I was in the office, I knew what my paycheck was going to be every day. With this, you do not know. There’s a lot of unknowns, a lot of uncertainty.
“You don’t know if you’re going to have to carry four cases of water up three flights of steps. You don’t know how much traffic you have to sit in if you want to make 40 bucks.”
Aside from carting heavy groceries and risking exposure to the coronavirus, Franklin-Corbett was bitten on the foot by a customer’s dog in March.
“It was horrific,” said Franklin-Corbett, who had to stop work for two weeks, getting $60 compensation from San Francisco-based Instacart and $1,600 from the customer’s insurance plan.
But with the pandemic sending unemployment to highs not seen since the 1930s Great Depression, more people are joining the growing U.S. army of gig workers, competing for jobs they say pay less and less while trying to avoid contracting COVID-19.
Gig workers are independent contractors who perform on-demand services, including as drivers, delivering groceries or providing childcare – and are one-third more likely to be Black or Latino, according to a 2018 Edison Research poll.
The U.S. Bureau of Labor Statistics reported in 2017 that 55 million people in the United States were gig workers – or 34% of the workforce – and this was projected to rise to 43% in 2020.
Of these about 1.6 million are part of a growing group of workers to emerge in the past decade, paid by tech platforms like ride-hailing giants Uber and Lyft or food delivery apps like DoorDash and Postmates.
In the past 12 months alone, two million Americans have started freelancing, according to a September study from Upwork, a freelance job platform.
This ongoing shift in the workforce and calls for greater protection for gig workers has put the issue on the political agenda ahead of the Nov. 3 election, with California voters to decide on a landmark state law ruling such workers as employees.
For while some companies and workers praise the flexibility of gig work for juggling families and multiple jobs, some labor activists fear an economic slump will leave gig workers in dire straits with no safeguards like minimum wage or health cover.
‘FELT LIKE A FREE FALL’
Gig workers were included when the U.S. government introduced a $2.3 trillion coronavirus relief bill in March.
The bill included payments of up to $1,200 each to millions of Americans, increased and extended unemployment benefits for workers including contractors, and small business loans.
But after the initial round of pandemic-related aid dried up in August, job growth has slowed more than expected with COVID-19 cases rising and the number of deaths nearing 220,000.
Lawmakers remain in a deadlock on further aid ahead of next month’s election, adding further uncertainty to an already weak U.S. economic recovery in which many companies and workers initially facing job furloughs are now permanently laid off.
In September the number of unemployed people in the United States was 12.6 million compared to 5.7 million a year earlier, with an overall jobless rate of 7.9% but higher numbers among teenagers, Blacks and Hispanics, according to government data.
One of those laid off was Serenety Hanley, whose career in digital communications included a stint in the White House under President George W. Bush.
The 45-year-old single mother was let go from a retail job in March and now makes a living by shopping for Instacart, whose orders jumped fivefold during the pandemic as consumers grew wary of venturing out to stores.
Living off money she makes lugging groceries and dipping into a college savings account set aside for her 11-year-old son, Hanley said she still can barely make ends meet.
“It felt like a free fall,” said Hanley, who lives in Arlington, Virginia.
“(But) even though I’m not getting the same benefits as a white-collar job, I do appreciate that I have an opportunity to make money at all.”
FELL THROUGH THE CRACKS
Getting government help has proved difficult.
After the relief bill was passed, many state authorities were overwhelmed by applications for unemployment pay, with a record 10 million Americans filing for assistance in late March and April, and many gig workers fell through the cracks.
Franklin-Corbett said she received her federal stimulus check but, despite calling Maryland state offices regularly, she has not gotten the additional unemployment benefits she is due.
She was also concerned that the delivery business during the pandemic had attracted a flood of new workers who lost other jobs so the pay was no longer as good.
Instacart said this month that it had brought on 300,000 new “shoppers,” more than doubling its workforce to 500,000.
Prior to the pandemic, Franklin-Corbett said she could make up to $300 in a few hours. On a recent trip that took more than an hour and a half, she made $9.
“I have to work twice as much to make half of what I was making to survive,” she said.
DRIVING DEMAND DOWN
Other areas of the gig economy, particularly ride-hailing services, have taken steep hits with fewer people traveling.
Lyft’s number of active riders fell 60% to 8.69 million during the second quarter, according to the company’s latest earnings report. Uber’s gross bookings declined 75% overall in the second quarter, the company said in August.
Ayana Headspeth, 33, a mother-of-four from Montgomery County, Maryland, became one of Washington’s first 100 Uber drivers in 2014 and has made her living with the largest gig platforms including Uber, Lyft, Instacart, and DoorDash.
But to protect herself and her children from coronavirus, she stopped driving in late March and hasn’t driven since.
Not only were there health risks, driving for Uber became financially “pointless,” said Headspeth.
“The last time I drove, I drove around for three-and-a-half hours and I made $11, which has never happened in the history of me doing Uber,” she said.
“My very first night doing Uber, I did Uber for an hour-and-a-half and made $40 – and this was when no one knew what Uber even was.”
Amid the pandemic, Kristie Taylor, a single mother of three from Leesburg, Virginia, also quit driving for Uber after five years of using the work to supplement her salary as a full-time elementary school teacher.
“People are going out because they want a change of pace …. but are they going out and partying and getting drunk and calling Ubers? No,” she said.
“And is it worth it to make $12 to $15 an hour to risk exposure?”
Pre-coronavirus, trips to and from Reagan International Airport were a sure way for Uber and Lyft drivers in the Washington D.C. area to pick up longer, more profitable, rides.
But during one recent morning rush hour, the designated area for drivers waiting for passengers was only half-full.
“What can we do? We have to stay cool and pray and wish this pandemic to end,” said Uber and Lyft driver Ali Mohammadzai, 32, an Afghan immigrant, who had been waiting an hour for a fare.
He said less people were also willing to give tips now.
NEW OPPORTUNITIES FOR FRAUD
Headspeth, who has worked predominantly for Instacart since the pandemic began, said a flood of new customers prompted a surge in those falsely reporting missing or incomplete orders in order to scam Instacart and not pay for groceries.
She said those complaints chip away at her rating – and pay.
Instacart uses a star system in which its shoppers are rated for their job performance; those with higher ratings have access to larger and more costly orders so they can make more money.
“When I’m a five-star rating, there are days when I’m seeing orders well over $100,” said Headspeth.
“Since I’ve been at this rating – I’ve been stuck in the 4.5 to 4.7 range – the largest orders I’m seeing are about $30.”
“When you’re taking away from my ratings, you’re taking away from my ability to make bills, my ability to buy groceries, my ability to clothe my children because this isn’t just a gig for me, this is how I make it.”
Instacart said in written comments that its aim was to offer a safe and flexible earnings opportunity to shoppers and to “deliver the best possible shopper experience” for customers.
“We’re focused on serving as an essential service for millions of families, while providing immediate earnings opportunities for hundreds of thousands of people across North America,” the company told the Thomson Reuters Foundation.
CONTRACTORS VS. EMPLOYEES
Some gig economy companies have faced lawsuits accusing them of misclassifying workers as independent contractors who are cheaper than employees with no entitlement to the minimum wage, overtime pay and reimbursements for work-related expenses.
Under the National Labor Relations Act, independent contractors cannot join unions and so do not have legal protection when they complain about working conditions.
Uber, Lyft and DoorDash have launched a campaign to overturn a law in California, California Assembly Bill 5 or AB5, the first in the country, that took effect this year making it harder to classify workers as contractors in the state.
The companies have spent more than $100 million on a “Yes on 22” campaign supporting a California voter initiative on the November ballot that, if passed, would overturn the AB5 law.
“A forced employment model will have devastating consequences for drivers and consumers who use these services,” said Geoff Vetter, a spokesman for the “Yes on 22” campaign.
“Rideshare and delivery drivers want to remain independent contractors, they do not want to be employees. They prefer independence because it provides the flexibility to choose when, where and how long they want to work.”
But the surge in newcomers to the sector and the challenges posed by the pandemic underscore the need to classify gig workers as employees, according to labor rights campaigners.
“It’s really just rearranged the chess pieces on the chess board,” said Katie Wells, a postdoctoral research fellow at Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor, whose research centers on the D.C. gig economy.
“It may have shone some more light on some corners that were previously dark, but at the end of the day, this is still a pernicious and exploitative workplace that involves a lot of hard work and a lot of risk.”
Uber and Lyft each would face more than $392 million in annual payroll taxes and compensation costs if they paid workers as employers and not contractors, a Reuters calculation showed.
U.S. Democratic presidential candidate Joe Biden and his running mate, Senator Kamala Harris, have voiced strong support for AB5 and have directly called on voters to reject the companies’ ballot proposal to weaken it.
Republican President Donald Trump has not commented on the issue, but in September, the U.S. Department of Labor published proposed rules that would allow the ride-sharing companies to maintain independent contractors across the country.
As she dashed from the supermarket to her car with bags loaded with groceries, Franklin-Corbett said gig work had filled a gap for many people but she was concerned that too many people were now totally reliant on a job-to-job existence.
“I don’t think it’s a feasible way to make a living, especially if you have children,” she said.
Reporting by Matthew Lavietes; Editing by Ellen Wulfhorst and Belinda Goldsmith. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit news.trust.org
Prop 22 should influence states to provide benefits to gig-workers
- Californians across the political spectrum voted to pass Proposition 22, affirming the importance of flexible work and the need to include new benefits and protections for gig-workers.
- It is time to push forward, focused on better, permanent, collaborative solutions for millions of workers across the country.
- Tony Xu is the co-founder and CEO of DoorDash.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit Business Insider’s homepage for more stories.
2020 has been a year of enormous upheaval. So many of the decisions we faced have been incredibly consequential, shaping the kind of future we want for this country. In one of those decisions, voters in California chose to embrace a new future for work in a decision that has taken on even greater importance in light of our nation’s present challenges.
By passing Proposition 22 with 58% of the vote, Californians affirmed the importance of flexible work and, crucially, the need to update that framework to include new benefits and protections. They rejected an approach that could have eliminated a critical source of supplemental income for millions of Californians, and instead ushered in a modern-day approach that meets the needs of today’s workforce.
This is a signal to the rest of America that change is vital and now is the time for innovative solutions across the country.
Flexible work is crucial to the future of the US economy
Flexible work opportunities with low barriers to entry are more crucial than ever, enabling people—particularly in communities that have been disproportionately impacted by the pandemic—to earn money literally at the touch of a button as unemployment rates skyrocketed throughout the crisis.
As the CEO of DoorDash, I saw this first-hand: since the first stay-at-home orders went into effect in mid-March, 1.7 million new Dashers joined the platform and together with existing Dashers earned nearly $3.5 billion during the first six and a half months of the pandemic. Importantly, $2.1 billion of that total was earned by Dashers who live in zip codes with above average Black and/or Latinx representation, delivering meaningful income to communities throughout the US.
I believe we need to build upon what began in California to find innovative solutions elsewhere. And that’s why we’re taking the lead and partnering with workers, policymakers, and a variety of stakeholders to build a framework for today’s workforce.
It’s a vision that reflects what Dashers have told us works best for them—not the workforce of 75 years ago.
Unlike other gig platforms where people may work more hours, 91% of Dashers work fewer than 10 hours per week, with an average of four or fewer hours. More than 4 out of 5 Dashers say that gig work is not their main source of income, and more than 3 out of 4 Dashers say they have another job or are in school. It’s clear: Dashing, and work like it, is filling a critical need for supplemental income in our country, whenever and wherever convenient for the worker.
Instead of getting caught in the no-win dichotomy of employment versus independent contracting, we need a third way that recognizes that this new approach to working is here to stay. That’s because workers want it and it provides the legal protections and benefits they deserve —it’s as simple as that. 76% of Dashers indicate that Dashing has had a positive impact on their ability to provide for themselves and their family. We need a portable, proportional, and flexible framework that is easy to access and allows app-based workers to maintain their independence, while also providing new benefits.
- Portable: Benefits should be connected to the individual so workers can move from platform to platform, taking their benefits with them without interruption or loss of funding.
- Proportional: Benefits such as accident coverage and on-the-job injuries should be able to scale up in proportion to the engagement a worker has with a company. And protections against discrimination and harrassment should exist for every worker in America—full stop.
- Flexible: Allow workers to choose the benefits they want or need, accounting for the different ways people work with app-based platforms like DoorDash.
Prop 22 is one example that works for California, but each state is different, and this is a nationwide issue that requires a thoughtful and tailored approach. We are committed to working with lawmakers and other stakeholders across the country and across the political spectrum to develop solutions that reflect the multiplicity of needs of workers in the 21st century economy.
Now is the time to push forward, focused on better, permanent, collaborative solutions for millions of workers across the country, and DoorDash is committed to leading that effort.
Tony Xu is the CEO of DoorDash.
This is an opinion column. The thoughts expressed are those of the author(s).
Don’t Hire Gig Workers to Wait In Line for Your COVID-19 Test
Over the weekend, a TikTok video went viral advertising a tip to bypass waiting in long lines for COVID-19 testing: hiring a gig worker to wait for you.
A now-deleted TikTok video from user @thetipguyNYC explains that viewers looking to hire someone else to wait for hours among possibly-infected people should use TaskRabbit, a platform for hiring people to do just about anything you don’t want to. The video advises viewers to “filter by cheapest available” and to instruct the worker to give them a call when they’re at the front of the line.
In a statement, TaskRabbit said it is aware of the practice of hiring workers to wait in line for COVID-19 tests, and that it’s fine with it.
“The Wait in Line category has historically been popular during the holidays,” a TaskRabbit spokesperson told Motherboard. “This year, there are some Taskers choosing to wait in line for clients seeking COVID-19 tests.” They also added that “because details of all tasks are shared by clients in advance, Taskers know the types of lines in which they will be waiting, and the decision about whether to accept the task lies with the Tasker.”
One person who did this told Time Out that they couldn’t “fathom how people can disagree—it’s giving people jobs who may have lost theirs during this pandemic, so if they do it and get paid for it, that’s their decision.” They blamed access to testing and “the lack of organization” for the lines, adding that “people should absolutely be taking the opportunity to get paid for it.”
All of that conflicts with what’s actually going on, however. Some of the overcapacity is from a lack of adequately distributed resources, but another part is thanks to the hordes of people who are ignoring CDC guidelines and planning to travel for Thanksgiving.
The pandemic has already led to an increase in demand for gig work (for example, food delivery) while exacerbating the divide between those who deliver and those who make the orders from behind phone screens at home. People need money in the middle of a massive employment crisis during a plague, but it doesn’t justify the exploitative work that has popped up in the gap in lieu of a competent and compassionate societal response.
Masses of out-of-work people standing in line for a COVID-19 test on behalf of wealthy people ignoring guidance that could end the pandemic isn’t any kind of solution, it’s a perfect example of why things got this bad to begin with.
Reconciling the Gig Economy in California: Changes to Worker Classification Laws Since AB 5 | Hanson Bridgett LLP
Assembly Bill 5, (AB 5), signed by Governor Gavin Newsom in September of 2019, which went into effect on Jan. 1, 2020, codified the California Supreme Court’s landmark decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles. Dynamex created the presumption that a worker is an employee rather than an independent contractor unless the hiring business can prove each prong of an ABC test, as follows:
(A) The person 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) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Though AB 5 outlined a number of exemptions, the law left many who previously relied on contractor work confused as to how to classify workers that would no longer be presumed independent contractors under the strict ABC test. Dissatisfaction with the new law quickly led to challenges at the Legislature, leading to the passage of AB 2257 and approval of Proposition 22 by voters this year.
AB 2257, drafted by the same author of AB 5, was signed into law by Governor Newsom on Sept.4, 2020. The bill primarily relates to creative work. Under AB 5, certain specified occupations and business relationships were exempted from the application of the ABC test. AB 2257 revised and recast these provisions substantially. The bill additionally specifically exempts certain occupations in creating, marketing, promoting, or distributing sound recordings or musical compositions. The law exempts a musician or musical group for the purpose of a single-engagement live performance event, and an individual performance artist presenting material that is their original work and creative in character, and the result of which depends primarily on the individual’s talent.
AB 2257 narrowed the professional services exemption for services provided by still photographers, photojournalists, freelance writers, editors, and newspaper cartoonists. The bill establishes an exemption for services provided by still photographers, photojournalists, videographers, or photo editors (as defined under law) who work under a written contract that specifies certain terms, subject to prescribed restrictions. The bill also establishes an exemption for services provided to a digital content aggregator (as defined under law) by a still photographer, photojournalist, videographer, or photo editor, and establishes an exemption for services provided by a fine artist, freelance writer, translator, editor, content contributor, advisor, narrator, cartographer, producer, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies the terms, subject to prescribed restrictions.
While the majority of the changes established by AB 2257 relate to creative work, the bill also created additional exemptions for certain other narrowly tailored professions and occupations, such as for people who provide underwriting inspections and other services for the insurance industry, manufactured housing salespersons, people engaged by an international exchange visitor program, consulting services, animal services, and competition judges with specialized skills. The bill also creates exceptions for licensed landscape architects, specialized performers teaching master classes, registered professional foresters, real estate appraisers and home inspectors, and feedback aggregators.
The bill revised the conditions under which business service providers providing services pursuant to contract to another business are exempt. The bill also revised the criteria under which referral agencies and service providers providing services to clients through referral agencies are exempt and revised the applicable definitions.
Finally, AB 2257 created an exemption for business-to-business relationships between two or more sole proprietors, and provides that a hiring entity need only satisfy all of the conditions of one of the exemption provisions to qualify for the exemption from the ABC Test.
With respect to enforcement, AB 2257 expanded the possibility of enforcement actions by authorizing any District Attorney to prosecute an action for injunctive relief, in addition to the Attorney General or any City Attorney authorized previously by AB 5.
On Tuesday, Nov. 3, 2020, California voters overwhelmingly passed Proposition 22. Proposition 22, the most expensive initiative sponsored in California history, backed by Uber, Lyft, and Doordash, codifies the Protect App-Based Drivers and Services Act drafted in response to the restrictions passed under AB 5.
Many companies utilizing contractors have difficulty meeting the B-prong of the ABC test, and thus face significant misclassification risk. This is especially so in the gig economy, where contractors are used to perform work that a hiring entity is in the business of providing to end-customers. AB 5 provides little to no relief for employers within the gig economy, as none of the enumerated exemptions apply.
Proposition 22 is targeted to the gig economy and carves out a specific exemption from AB 5 for “app-based drivers” retained by “network companies.” The Proposition defines “app-based driver” as an individual who is a courier or driver for a company that maintains an online-enabled application or platform used to facilitate delivery services on an on-demand basis or to connect passengers with drivers using a personal vehicle. App-based drivers will be presumed independent contractors so long as a minimum standard is met:
- the network company does not unilaterally prescribe specific dates, times of day, or minimum hours during which the app-based driver must be logged into the platform,
- the network company does not require the app-based driver to accept any specific rideshare services or delivery service requests as a condition of maintaining access to the platform, and
- the network company does not restrict the app-based driver from working in any other lawful occupation or business. These requirements emulate the A-prong of the ABC Test and traditional jurisprudence on independent contractor classification.
Proposition 22 provides a number of legal employment benefits and protections that are required in California for workers classified as employees. For example, app-based drivers now have a guaranteed “net earnings floor” comprised of 120 percent of the applicable minimum wage of the worker’s “engaged time,” guaranteed tips and gratuities, and a guaranteed quarterly healthcare subsidy. For drivers that average 25 hours per week of engaged time during a calendar quarter, the subsidy will equal 82 percent of the average California Covered premium for each month. And for drivers who average between 15 and 25 hours, the subsidy will equal 41 percent of the average California Covered premium. Proposition 22 also requires the applicable companies to provide occupational accident insurance to cover at least $1 million in medical expenses and lost income resulting from injuries suffered while a driver is online, and disability payments of 66 percent of a driver’s average weekly earnings before the injuries suffered. Proposition 22 further requires the applicable company to provide accidental death insurance for the benefit of a driver’s spouse, children, or other dependents when the driver dies while using the app.
In addition to the employment-like pay benefits, Proposition 22 requires network companies to develop anti-discrimination and sexual harassment policies, and develop training programs for drivers related to driving, traffic, accident avoidance, and recognizing sexual assault and misconduct. The ballot measure also criminalizes the impersonation of an app-based driver as a misdemeanor.
Proposition 22 is most likely here to stay. The new law contains a provision which permits the Legislature to amend the law only with a statute passed in each house by seven-eighths of the membership. While a big win for gig economy companies using app-based drivers, Proposition 22’s reach is otherwise very limited. It only applies to companies that maintain an online-enabled application or platform used to facilitate delivery services on an on-demand basis, who also maintain a record of the amount of engaged time and miles accumulated by its couriers, or “transportation network companies” as defined in Public Utilities Code section 5431. i.e., a company operating in California that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using a personal vehicle. In other words, taxi or courier service companies that utilize an online platform to provide on-demand service are the only ones benefiting from the new law.
In sum, Proposition 22 creates a separate classification for app-based drivers. App-based drivers are thus no longer independent contractors or employees in the traditional sense, but rather a hybrid maintaining the independence traditionally enjoyed by contractors with some of the benefits and protections mandated for employees. The overwhelming support for this new classification in California could see ripple effects across the nation where app-based driving companies operate. Likewise, other industries that utilize an app-based model to provide services by contract workers to end-consumers may see value in developing similar legal exemptions for their gig workforce. Further changes to AB 5 or the expansion of Proposition 22-like legislation for other sectors are therefore expected while the law and the economy reconcile how to deal with the gig economy.
Here’s how you can turn your volunteering gig into paid work
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Prop 22 should influence states to provide benefits to gig-workers
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