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Insurers may gain from California gig drivers’ new benefits

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Ride-hailing and food delivery companies like Uber Technologies Inc., DoorDash Inc. and Lyft Inc. are preparing to roll out benefit packages that include health insurance subsidies for their gig drivers in California, a move that experts say could benefit managed care providers.

The healthcare subsidies are one of the results of California voters approving Proposition 22 in the Nov. 3 general election. The measure allows gig economy companies to continue treating their drivers as independent contractors rather than employees but also requires them to offer certain benefits comparable to those of full-time employees.

Under the provisions of Prop 22, gig employers must provide subsidies consistent with the average employer contributions required under the Affordable Care Act, which would enable contractors to buy healthcare coverage. Beginning in 2021, drivers will receive subsidies each quarter after they submit proof of coverage either via private carriers or through the exchanges.

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“If drivers were to pick an insurance coverage through the exchanges or the individual market, UnitedHealth and Anthem would be well-positioned to absorb this demand because they offer cost-effective access to healthcare services through a large network of physicians, hospitals and outpatient facilities,” Hardy said in an interview.CFRA Research analyst Sel Hardy said the new law could present profitable opportunities for carriers such as Anthem Inc. and UnitedHealth Group Inc.

Piper Sandler analyst Sarah James said Centene Corp. and Molina Healthcare Inc. could also benefit from the new measure.

“Insurance companies are making anywhere from low- to high-single-digit margins on exchange products,” James said in an interview. “Centene is one of the largest exchange providers and they’re also, from a percent of total company earnings perspective, the most exposed to that business.”

The subsidies will be based on drivers’ engaged time with passengers, which is limited to driving to, picking up and transporting customers to their destinations. Time spent waiting between gigs would not count.

Drivers engaged between 15 and 25 hours a week would receive subsidies amounting to approximately $184 per month, while drivers engaged more than 25 hours per week would receive subsidies of about $367 per month.

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The new law also requires network companies to provide on-demand occupational accident insurance to cover medical expenses, up to $1 million, as well as lost income resulting from injuries or illnesses suffered during engaged time. Disability payments and death benefits also must be similar to those provided by workers’ compensation.

However, gig employers do not have to offer other protections such as workers’ compensation and unemployment insurance, nor do they have to provide for family leave or sick leave or allow workers to form labor unions.

The measure overrides California Assembly Bill 5, signed into law in September 2019, which sought to bring labor protections to more gig workers and force companies to classify them as employees.

The industry responded by pushing Prop 22 and spending $200 million to back its passage. The measure was approved by a 58% to 42% margin.

The measure is scheduled to be officially approved by California Secretary of State Alex Padilla on Dec. 12 and go into effect on Dec. 17.

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‘What are the options?’: a new film on the toll of the gig economy | Documentary films

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Jason Edwards would find it a struggle to pass a job interview with his prominent gold teeth and criminal record. But he has something more powerful than a suit, shirt, tie, clean shave and polished shoes. He has a laptop and guile.

Edwards works from home by filling in online surveys. It is not typically lucrative work, paying just a few cents. But Edwards, who is white, figured out that by posing as an African American Republican, his opinions would be much sought after. He reckons he has earned more than $30,000.

“If you didn’t cheat the system the way I do, you’re not going to make a respectable amount of money,” he observes from a modest house in Mims, Florida, where he cares for an ailing mother who loves smoking and lottery scratchcards.

This is just one bittersweet story told in The Gig Is Up, a new documentary that shines a light on the human side of the gig economy, now worth more than $5tn a year globally and spurred further by the coronavirus pandemic. It includes, of course, the now familiar hustle of driving or delivering for companies such as Uber, Amazon and Deliveroo.

But there is also a bigger and more mysterious army of “ghost workers”: millions of people around the world who provide the elusive human factor in artificial intelligence, from completing surveys to transcribing audio recordings or tagging images and other data. While they gain work-from-home flexibility, they earn a pittance, must provide their own computer, broadband and power and have to cope without a safety net, trade union or the consolation of office banter.

“There is a Big Brother aspect to that, where there’s no one to call,” says the director, Shannon Walsh, by phone from Vancouver, Canada. “That was one of the big things we heard around the world, that sense that you were at the peril of a machine. Get a bad rating, if someone’s in a bad mood one day, and you lose your job and your livelihood. It’s a next level of precarity.”

The Gig Is Up is the fifth feature film for Walsh, 45, a Canadian who has had spells living in South Africa and Hong Kong and always had an interest in uncovering stories that are most neglected. She was intrigued by the way gig work offers the illusion of technological utopia on slick phone apps but hides an entire underclass of workers.

“In the early 2000s we used to talk about globalisation and the outsourcing of jobs into parts of the world where you could find cheap labour,” she says. “With the advent of the platform economy, we really see this flattening of the global workforce. The haves and have nots each exist in each country.

“Someone doing a job in rural Florida is actually doing the exact same job as someone in Lagos or someone in Mumbai. I found it fascinating how that shift has happened with the growth of multinational corporations. What we saw in those early days has really transformed into something else.”

A still from The Gig Is Up.
Photograph: Intuitive Pictures

Within the US, Walsh found that gig work throws a lifeline to people shut out of the formal economy for reasons such as disability, caring for an elderly parent or children, or having undocumented immigrant status or a criminal record that would show up on a background check. In some cases, they are desperate.

“It’s not the idea of a student making pizza money: that is what the companies want us to believe. It’s folks who need this kind of work and don’t have a lot of other options in many cases and who are working for multiple platforms to try and scrape together a living.”

A delivery driver knows that a single spilled drink or spoiled meal can result in career-ending complaint from a customer. On the flip side some “independent contractors”, as they are euphemistically known, relish the autonomy and flexibility of not being tied to the 9-to-5 commute, freeing them to attend their child’s school concert or sports game or explore their own creativity

Walsh’s travels for the film included Nigeria, where gig work is both liberating and crushing. Some perform menial online tasks for Amazon’s Mechanical Turk platform, sometimes for just a few cents, and are paid in Amazon gift cards.

One Nigerian interviewee, a trained architect, does 3D design work for architecture firms in the US along with far more soulless work. Walsh says: “You’ve got this paradox where you’ve got folks like him working for Amazon gift cards in one breath and then also having this incredible untapped amount of human creativity and expertise.”

She extrapolates: “This new kind of evolution of platform-based work can’t be painted with one brush. There’s this incredible sense of human creativity connected like we’ve never had before and yet at the same time, it’s a race to the bottom in terms of not taking into account what that means for the transformation of labour and the future of work.

“If we’re going to ask people to be available and ask them to bring their creativity and human intelligence to the table, how does that shape the way we have to think about what we need around labour? In the US, the idea of having a base of support and security that is not reliant on the companies doing that is going to be ground zero in the conversation.”

Filming The Gig Is Up.
Photograph: Intuitive Pictures

Many of the film’s subjects speak wearily about the isolating effects of gig work, especially since the apps are actively designed to prevent workers meeting each other and organising. But Walsh observes: “What’s always amazing is that, like the grass that grows through the cracks in the pavement, people find ways to find each other.

“We heard great stories in India about folks doing platform based work on computers who would find each other on Reddit forums, call each other and just leave the phone off the hook while they worked because that sense of community around work is essential. People will find a way to be in community.”

The process of how society, and notoriously tech-illiterate governments, get to grips with gig work, regulates it and forges a new social contract is only just beginning. Last week elected officials in New York City passed legislation for gig economy and food delivery workers, setting minimum pay, allowing workers to keep more of their tips and limiting how far workers can be asked to travel for deliveries.

But there is a long way to go to curb the power of corporations that have found in gig work a way an army of labour that not even 19th-century coal barons and factory bosses could have dreamed of.

Walsh comments: “The big names are problematic on so many levels. They’re trying to bend the rules for their benefit and governments by and large for a long time have been letting them do that. It’s also that question of policy not quite being where tech is. It’s so often the case that stuff’s already happened by the time governments catch up to understanding what is happening.”

Back in Mims, Florida, Jason Edwards cannot bear to watch The Gig Is Up because his mother died just after it was made. But he still has the gig economy. Walsh reflects: “I really felt a lot for him through the process. What are the options in a place like where he lives?

“And this is true for a lot of the US, unfortunately. What are the work options that are available to you? A lot of them are not good. Like he said when I first interviewed him, ‘Well, before this, I was dealing drugs.’ What else is he going to do?”

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Striketober and the Gig Economy

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What does ‘Striketober’ mean for the gig economy?

Is something stirring among the workers? There are signs of a noticeable uptick in strikes internationally. In the US, where trade unions have been shattered by decades of neoliberalism, an October strike wave, dubbed ‘Striketober’, includes John Deere manufacturers, Hollywood film workers, nurses, building engineers, auto parts workers and Instacart gig workers.

The Instacart strike, organized by the grassroots Gig Workers Collective, took place yesterday [16 October], and followed a campaign for consumers to #DeleteInstacart over collapsing pay, unsafe conditions and the unfair ratings system at the Amazon company.

It’s not only in the US. In the UK, the combination of a labour shortage, rising prices and a supply chain crisis is pushing workers to use their leverage to push for higher wages and better conditions. The climate summit in Glasgow, COP26, will be marked by train strikes, while bus workers are also striking for three weeks demanding higher pay. Lorry drivers in Unite the union are seizing on the shortage of drivers by threatening crippling strike action over the Christmas period unless pay and conditions are improved drastically.

Bigger Slice of the Pie

What about in the EU? There are signs in Germany, with inflation reaching a 29-year high of 4.1% in September, that workers want a bigger slice of the pie. The Financial Times reports that unions are entering negotiations demanding above-inflation wage increases, with lower unemployment an additional factor in giving workers’ more confidence. The number of construction companies stating a lack of workers were limiting their activities hit a new high of 27%.

What does all of this mean for the gig economy? One possible outcome is that platforms will have to offer higher pay and potentially greater employment security to attract and hold on to workers. If they do not, gig workers with little attachment to the platform could look elsewhere, or they could decide that taking strike action is now worth the risk.

Gig workers have been treated by platforms as easily replaceable and thus easily disposable, but what if that were to change? The growth in industrial action we have seen this year in Europe’s gig economy may just be the start of something. •

Ben Wray is Gig Economy Project co-ordinator.

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Festivals boost demand for gig workers as economy opens up: Experts

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Amid the ongoing festival season in the country, the hiring of gig workers has zoomed across sectors as the businesses have begun opening up leading to an uptick in consumer sentiments and rising pent-up demand, according to experts.

“In the third quarter, with the onset of festive season, we are witnessing a 400 per cent spike in the hiring for gig workers. Earlier, in the first quarter of this year, as many businesses and companies were not operating at full strength, growth was muted.

“However, things began picking up and became more promising from the second quarter, as the demand for gig workers across sectors grew,” Taskmo, a subsidiary of Quess Corp, co-founder Prashant Janadri told PTI here.

Given the impact of the pandemic, companies are preferring quick hiring processes, therefore gig workers and short-term workers are in high demand, he added.

He said that currently, the demand for gig workers is being witnessed, especially in sectors including edtech,

, mobility, e-commerce, foodtech and retail across roles.

Roles such as business development, sales, marketing, onboarding, auditing, retail and warehouse operations are mostly in demand, he added.

“As companies are opening up after the COVID-19-induced lockdowns, we are witnessing increased demand in customer support, tele-sales, onboarding partners, auditing, packing, customer service, loader-unloader, samplers and merchandisers roles,” he said adding that demand for blue-collar gig workers is more as compared to the white collar workforce.

The salary for gig workers is 1.25-1.5 times higher as compared to the first and second quarter, Janadri also said.

Echoing a similar view, FirstMeridian Business Services Group CEO Sudhakar Balakrishnan said pent-up demand and rising consumer purchasing, e-commerce is expected to generate up to 1 lakh jobs this festive period.

The Indian job market is on the road to recovery, as most of the companies are intending to hire in this quarter, which is expected to be the highest over a period of 1.5 years, he stated.

“The pandemic has taught companies about adaptability and new ways to navigating through disruptions. There was an increase in the number of delivery boys, people handling distribution centres to meet the demand in the festive season.

“Looking at the current trends, hiring in the e-commerce sector is expected increase 50 per cent, e-pharma and logistics will increase 30-40 per cent and food delivery will increase over 50 per cent,” he noted.

He further said that e-commerce, e-pharma, and logistics are the biggest job creators in the gig blue-collar space right now, and 70 per cent of new hires will be blue-collar, while 30 per cent will be white-collar.

E-commerce is also facilitating indirect employment at seller partner locations, with kirana stores acting as last-mile delivery partners, he said.

“Also, demand for gig workers are robust in sectors such as logistics, warehousing, technology and support services, as companies expand and optimise their supply chains. Retail, healthcare, home services, and fintech are also areas of focus,” he said.

Balakrishnan further stated that the demand for blue-collar workers has increased by 50 per cent in Maharashtra, Telangana, Tamil Nadu and Karnataka, which are more industrialised.

“The majority of the hiring is taking place at Delhi, Mumbai, Hyderabad, Ahmedabad, Kolkata, Pune and Lucknow. Even as India’s gig economy is an unorganised sector where wages are not fixed, we anticipate that the workforce will earn an additional 25 to 30 per cent as a result of the increased workload,” he added.

Meanwhile, CIEL HR Services Director and CEO Aditya Mishra said hiring of gig workers has gone up due to the sales and marketing push by e-commerce players, consumer durables, apparels, footwear, food and beverages, beauty and wellness sectors.

“We see gig workers in a wide variety of roles, the largest being in last-mile delivery. We see rise in gig workers in the domains such as content, digital marketing, supply chain operations, sourcing consumer loan applications, beauticians and technicians for cleaning services, installation of electronic appliances.

“On an overall basis, blue- and grey-collar jobs are the most in number, about 90 per cent,” he said.

Metros, tier-II and -III cities have created these jobs for the festive season because the end customers have been in a buying spree, Mishra said.

“As the scare of COVID-19 has receded, we see an upswing in consumer sentiments and the pent-up demand is finding the release.

“Another important reason is the fact that many people have moved back to their home towns and the spending power is no more concentrated in the metros as they used to be pre-COVID-19 era. As a result, we see a rise of over 50 per cent in demand of gig workers in tier II and III cities,” he observed.

The earnings of gig workers will increase in the season because they will get to perform 40-50 per cent more gigs than what they did on an average month, he added.

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