Gig companies in the United States have built an economy around the promise of freedom and shared prosperity. But recently, it appears these promises belong only to wealthy companies who are profiting off a vulnerable, unemployed and often low-wage, immigrant workforce. Since the passage of Proposition 22 in California, gig companies such as Uber and Lyft gained combined valuation bumps of $13 billion — even as this legislation is poised to strip app-based workers of their basic rights.
While some gig companies claim to be losing money, it seems they have only become more powerful over the past four years under President Donald Trump’s administration.
Gig economy giants including Uber, Lyft and DoorDash jointly funded the most expensive ballot race in California’s history, ultimately landing Prop. 22 on the ballot in November. These companies spent more than $200 million to help pass the proposition, which will exempt gig companies from classifying gig workers as employees with benefits.
Prop. 22 is a crucial step in gig companies’ fight to protect their business models and create a category of workers without rights. After defeating labor rights groups in California, these companies are looking to use the labor structure under Prop. 22 as an innovative model for the rest of the nation to adopt.
It is alarming how these companies are selling false promises and writing their own rules. The new legal framework surrounding Prop. 22 is set to rapidly erase decades of hard-won labor protections, which were designed to protect workers against the worst abuses of our century. It’s becoming clear that gig companies intend to rewrite state and federal labor laws at any cost, in order to thrive in an unregulated gig economy.
The rapid growth of gig companies has already changed the future of workers and has begun to reshape many aspects of the U.S. economy. According to the Bureau of Labor Statistics, approximately 34% of workers in the United States are gig workers, a percentage projected to rise to 43% this year alone.
With this proposition, a large proportion of employee-employer relationships in the United States have been disrupted to their core. The promise of freedom and prosperity in the gig economy is vanishing quickly as workers feel increasingly trapped and powerless.
William Canel, 31, a delivery worker who used to work full time for a restaurant, now finds himself tied to DoorDash as an essential worker without workplace rights.
“We have no choice but to work through these apps that put our health at risk for less than $2 per hour while denying us access to bathrooms, a dignified space to wait for work and basic labor protections,” Canel told me.
Gig workers are becoming victims of ruthless exploitation that puts their lives at risk with no guarantee of payment in the case of death or serious injury, and no protections against unsafe working conditions. When a gig worker such as Canel gets injured while making a delivery, they are responsible for paying their medical bills and are left alone to survive without a safety net.
The conditions of app-based food delivery workers have become even more precarious during the pandemic. According to Gustavo Ajche, a DoorDash worker and member of the Worker’s Justice Project, or WJP, these companies put profit before safety and the government has become complicit in these crimes.
As major cities continue to stay closed due to the pandemic, workers such as Ajche, Canel and many others continue to put their lives on the line without workplace safety precautions.
The gig economy is not delivering prosperity and freedom as promised, but new worker-led organizing movements will.
In New York City, app-based food delivery workers are rising up to defend their rights. Just last month, leaders at WJP led a march in Times Square to demand justice, safety and health for all food delivery workers.
As the country gets ready to transition to a new administration, President-elect Joe Biden will have the opportunity to create federal policies that ensure gig workers are given federal labor protections, such as minimum wage, safety and health laws — and the right to organize.
In the meantime, we must take the necessary steps to protect gig workers and prevent these tech companies from expanding their power across the country, from California to New York.
First, there should be strong safety protocols set in place for responding to public violence and electric bike theft against food delivery workers. Workers are required to purchase their equipment, which can be quite costly, so it’s imperative that these crimes are recognized and those affected receive adequate compensation.
In terms of health and safety, local governments must pass legislation mandating gig companies provide personal protective equipment and safety training to all their workers. Another seemingly trivial but important problem often faced by gig workers is a lack of bathroom access. Local and state governments should mandate that restaurants using app-based food delivery workers give them access to the facilities’ restrooms.
For New York City, where WJP is based, and other places that experience harsh winters, food delivery workers should be given access to lunch break facilities that will keep them warm and protected during the winter season.
Lastly, New York City can follow Seattle’s lead in passing ordinances requiring gig companies to give workers paid sick leave to help protect essential workers during the pandemic.
Workers serve a crucial, irreplaceable role in the economy — without them, the system falls apart. We must protect workers from corporate greed and power.
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.
Prop 22 should influence states to provide benefits to gig-workers
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