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Uber’s loss of a UK labour case could impact gig firms

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Some months ago, soon after the US presidential election, I wrote of how Uber and other gig-economy firms had won a big legal victory in California. During a presidential election, other referendum choices are also on the ballot in each state. California carried a referendum in the 2020 election on a yes/no vote on a measure named Proposition 22. It was critically important to firms such as Uber, Lyft, DoorDash and GrubHub. These businesses that use ‘casual’ workers had threatened to leave the state had the measure not been voted in. They wanted their drivers and food deliverers classified as contractors and not as employees.

They have become a part of our day-to-day life and been valued in the private equity world as well as public markets at tens of billions of dollars, but gig-economy companies operate on precarious business models. For example, ride hailing or delivery companies such as Uber and Lyft often lose money on every delivery made and every ride given. Uber’s loss before interest and tax was $625 million in 2020’s third quarter. Over the 2020 financial year, its net loss was $6.8 billion. A lot of this has been attributed to the pandemic. Such companies have signalled that they can turn profitable as soon as the administration of covid-19 vaccines helps reopen economies across the world.

But running a profitable business needs a company to both attract new revenue as the pandemic recedes as well as keep its costs down. Employee classification would have given rise to a slew of labour rights that today’s gig-workers, as ‘independent contractors’, do not enjoy. It would therefore have raised costs for gig-economy firms, which in the face of the pandemic-induced decline in revenues, would mean that their expectations of turning a corner to profitability would have received a jolt.

Workers for gig-companies in California will not have the same rights as other employees to paid sick days, overtime pay, unemployment insurance or a workplace covered by occupational safety and health laws. California’s Assembly had tried to head this off earlier with a law of its own called Assembly Bill 5 (AB5), which would have guaranteed these rights. According to the Los Angeles Times, one lawmaker, who wrote AB5 and opposed Proposition 22, said: “Instead of paying their drivers, gig-corporations forged a deceptive $204-million campaign to change the rules for themselves and provide their workers with less than our state laws require.”

After spending over $200 million in California, Uber and other gig-companies managed, through slick marketing, to convince the state’s otherwise left-leaning electorate that they were actually going to pay their drivers and delivery agents well. But according to the National Employment Law Project (NELP), the truth was that someone driving an average of 35km every hour in a 40-hour workweek would make $287 less per week after Proposition 22 passed. This, is in addition to a slew of healthcare and other reductions. The NELP said a “permanent underclass of workers has been created”.

At the time, I said that gig-businesses would take heart from the California victory and hope to replicate this success across the US and beyond. Uber has faced its share of legal troubles outside the US. It conceded defeat in China and sold out to Didi Chuxing, its largest competitor there. It has also been facing flak in Europe and the UK. In France, Uber lost a decision at the country’s top court last year, meaning that its drivers had the right to be considered employees. In other parts of Europe, such as Germany, Italy and Spain, Uber’s labour practices have raised the hackles of local taxi unions, which have so far been able to convince lawmakers to limit its availability.

But beguiling an electorate into making a convenient choice, itself a gargantuan effort, would seem to be easier than convincing justices of supreme courts. On Friday, 19 February, Mint reported that (bit.ly/2ZCnDUD) Uber suffered a major defeat in Britain, one of its most important markets, when that country’s Supreme Court said a group of drivers should be classified as workers entitled to a minimum wage and vacation time. The British Supreme Court justices ruled unanimously that Uber behaved more like an employer by setting rates, assigning rides, requiring drivers to follow certain routes and using a rating system to discipline them, though it claimed it was only a technology platform that connected drivers with passengers. For now, this decision is limited only to the 25 drivers who originally brought the case. The ruling will be relayed to an employment tribunal to determine how it will affect all Uber drivers in Britain.

Unsurprisingly, Uber is playing down the court’s decision, saying it will press the employment tribunal to limit the ruling’s scope. However, anyone with a basic sense of logic can see how this would cascade down to the 60,000-plus Uber drivers in Britain and reverberate well beyond that country’s borders. Its impact will also go beyond Uber to other gig-economy firms that rely heavily on casual workers.

In India, we are somewhat isolated from such issues. Our disposition towards ‘informal economy’ workers has had laissez faire attitudes. It’s thus a surprise to see an attempt at ensuring that food delivery agents and ride-hailing drivers get some social security benefits under a revised labour code. How gig-employers will resist this in India remains unknown.

Siddharth Pai is founder of Siana Capital, a venture fund management company focused on deep science and tech in India

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Ruling in arbitration case bad news for gig workers – Massachusetts Lawyers Weekly

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A recent decision from the 1st U.S. Circuit Court of Appeals found that a housecleaner who claimed her employer had misclassified her as an independent contractor couldn’t sue because she was bound by a “clickwrap” mandatory arbitration agreement.

The plaintiff in Emmanuel v. Handy Technologies, Inc. had submitted an application through the website of a company that assigns housecleaning jobs to workers and clicked a checkbox agreeing to its terms of use.

She subsequently used the company’s mobile app to accept an independent contractor agreement, which was required for her to be connected with customers.

The 15-section agreement included a mandatory arbitration clause in section 12. That portion was not visible unless the user scrolled down through the entire agreement.

The plaintiff performed between 10 to 20 cleaning jobs for the defendant but stopped working because of payment issues. She then brought a putative class action alleging that she and others had been misclassified as independent contractors in violation of the state Wage Act and the federal Fair Labor Standards Act.

When the defendant moved to compel arbitration, the plaintiff argued that she did not have sufficient notice of the arbitration clause to be bound by it.

But the 1st Circuit disagreed. Applying the standard set forth earlier this year by the Supreme Judicial Court in Kauders v. Uber Technologies, Inc., it concluded that an online contract had been formed because the plaintiff had “reasonable notice” of the terms and made a “reasonable manifestation of assent” to those terms.

The court acknowledged that only a portion of the agreement was immediately visible on the plaintiff’s phone screen, and that portion did not include the arbitration provision. But it took the position that it was sufficiently clear that “additional text further specifying the terms of the Agreement could be viewed by scrolling.”

In doing so, it specifically declined to read Kauders as holding that for a user to be bound by terms visible only through scrolling, he or she must be required to scroll through the full text of the agreement.

The problem with that reading is that it fails to take into account that workers like the plaintiff are largely unsophisticated, low-wage gig workers. They are encountering long, dense agreements like the one in Emmanuel on their phones, which makes thorough review next to impossible. Moreover, they are not in a position to negotiate over the terms of such an agreement.

In fact, in some ways, these workers are more similar to consumers facing “take it or leave it” arbitration provisions than traditional employees.

It’s unfortunate that decisions like this one gloss over that reality.

 

Massachusetts Lawyers Weekly’s Editorial Advisory Board provides knowledge and guidance for the editorials that appear on this page. The board is an advisory panel only, with no official voting or participation record. The input from the board is a tremendous resource to Lawyers Weekly; however, the editorials represent the position of the newspaper and its editorial staff, not the members, nor any given member, of the board. 

BOARD OF EDITORS: Robert J. Cordy, Boston; Sophia L. Hall, Boston; Martin W. Healy, Boston; Hon. Margaret R. Hinkle, Boston; Thomas M. Hoopes, Boston; Regina M. Hurley, Boston; Shiva Karimi, Boston; Hon. Rudolph Kass, Boston; Marsha V. Kazarosian, Haverhill; Andrea C. Kramer, Boston; Renee M. Landers, Boston; Richard L. Levine, Boston; Elizabeth N. Mulvey, Boston; Eric J. Parker, Boston; C. Max Perlman, Boston; Patricia M. Rapinchuk, Springfield; Martin R. Rosenthal, Boston; Jeffrey Sacks, Boston; Carol A. Starkey, Boston

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6 Ways Gig Workers Can Invest for Retirement | Business

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In 2021, you can contribute up to $13,500 if you’re under 50, or $16,500 if you’re 50 or older.

There’s no Roth option, so you’ll be taxed upon withdrawal. There’s also a steep penalty if you need to withdraw your SIMPLE IRA funds within two years of setting up the account: 25%, instead of the usual amount, on top of taxes.

As the employer, you’ll have to contribute to your SIMPLE IRA on your own behalf, as well as for any employee who’s earned at least $5,000 in at least two of the past five years and expects to earn at least that much for the current year. You’ll have to choose one of the following formulas:

  • Automatically contribute 2%.
  • Match 3% of contributions dollar for dollar.

Due to the lower limits and the extra layer of rules, a Solo 401(k) or SEP IRA is typically a better option for solo gig workers. However, if you expand and add others to the payroll, a SIMPLE IRA may be a good option.

6. Taxable Brokerage Account

If you’ve exhausted your other retirement savings options or you want the flexibility to invest with fewer rules, a plain old taxable brokerage account works. Since you won’t get any tax breaks for investing in a brokerage account, though, aim to max out your Roth IRA or traditional IRA contribution before you go this route.

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Meet Your Driver: Film, Gig Workers and Big Tech

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Kris Hitchen in Sorry We Missed You, courtesy of Zeitgeist Films

“When you walk into an Amazon fulfillment center, it’s like walking into the Chocolate Factory, and you won a Golden Ticket,” says Janelle, one of the employees featured in videos posted to Amazon’s YouTube page. The introductions share a format, with titles like “Meet Ricardo” and “Meet Ron, military veteran and Amazon Delivery Service Partner.” These documentary-style videos sometimes air as advertisements on streaming services. One of the people interviewed just had a baby. Another narrates in American Sign Language. Janelle talks about providing for her young son. She says he loves packages from “Mommy’s work.” He appears briefly in phone-shot footage, lifting a cumbersome delivery box with joy. 

These short videos give an inside look at the warehouses that facilitate the world’s largest online retailer. Sped-up footage of workers on the floor and driving forklifts accompanies Janelle’s narration. Dressed in safety vests, they snake through a maze of pallets, robots and conveyer belts, while boxes slide down spiral chutes. The concrete floors are clean, and the space looks vast and orderly. The workers in the background of the videos don’t look happy, but they don’t look unhappy, either. They just look like people at work.


In “Meet Kent,” another worker talks about his son and his son’s admiration for his job. “Every time he sees the blue Prime trucks,” Kent says, “He says, ’Daddy! There’s your people!’” Whether Janelle and Kent are real people and their commentary unscripted isn’t really the issue. The point of this video collection is to cast doubt on allegations that Amazon warehouse staff are exploited and to bury the reams of reporting that depict the workplace as a living nightmare.

It would be easier on Amazon if its customers imagined all of its operations were conducted by robots. But, as a company with more than a million employees, it’s impossible to hide the existence of the humans on the route from a click on a website to a cardboard box on a front door. This year, plenty of customers, newly working from home, have even had the chance to meet their Amazon delivery drivers. The idea of who might be considered a “tech worker” also has shifted, and a few recent films have explored the change.

In the past, stories about tech companies, like Douglas Coupland’s 1995 novel Microserfs and the HBO program Silicon Valley, which debuted in 2014, have zeroed in on young upstarts working under slightly older tech industry lions. Think of the software developer Ryan Phillippe plays in the 2001 movie, Antitrust, versus Tim Robbins’s Bill Gates-like CEO. Even the cult classic Hackers positions computing as a generational battle: The young punks wish to free digital technology from the corruption and avarice of corporate adults. But in 2021, the lower-level tech insider’s tale has begun to sound predictable. Plus, given the number of stories in recent years about bad behavior by “tech bros,” it’s harder to find a hero in the computer guy who just happens to be a little less senior than the other computer guy.

In contrast with the vulnerable warehouse and gig labor that powers these newly global empires, tech office culture has banausic stakes. As people like Janelle—and the workers in the background—have grown more visible, films have begun to represent their struggles with more honesty than Amazon’s video team would allow. Alex Rivera’s Sleep Dealer (debuting in 2008, years before the “gig economy” had a name) was early to diagnose the problem. His film features workers in Mexico remotely powering robot laborers across the border. A decade later, another brilliant film, Boots Riley’s 2018 Sorry to Bother You, featuring Amazon-like corporation WorryFree, exposes bottom-rung work life, as well as the fig leaves and Potemkin villages that such companies create to deflect media scrutiny. This year, Lapsis, directed by Noah Hutton, cleverly leads with characters in a fictional gig position—part Google Map photographer and Instacart shopper. They face exploitation, but in Amazon-style promotional videos, the CEO declares that sustainability and “doing the right thing” are the company’s ultimate objectives.

Sorry We Missed You, released in 2019, is a direct hit, told as only the director Ken Loach could. The film reveals how the everyday burdens of this line of work can destabilize an entire family. Amazon goes unnamed, but it’s strongly implied when Ricky finds a job delivering boxes of products people ordered off the internet. He’d rather starve than go “on the dole,” and his pride and need makes him an easy mark for the hiring supervisor at the warehouse. “You don’t work for us, you work with us,” he tells Ricky.

The strength of Paul Laverty’s script lies in the scenes set at home. Ricky’s job, the means to provide for his family, has torn them apart. His wife gives up her car so that he can afford a van. Seb, his bright teenage son, skips school and has brushes with the law. Shouting matches between the boy and his father make clear that they want the same thing—for Seb to flourish, for Ricky to have an easier life—but know the deck is stacked, so they take their rage out on each other. When Seb shouts that he doesn’t want to “end up like you” to his dad, Ricky is devastated. I thought of Janelle and Kent when I watched this scene. What they said about their children delighting over boxes and branded trucks feels like a calculated response to those who might have anguished kids like Seb. Amazon has a lot to sell. It’s the “everything store.” What it sells in the video propaganda campaign became clearer to me through Loach’s film: Get a job at Amazon, and your son will be proud of you.

But Janelle has more to say in the video, which was posted online last year. She highlights how people on her team wear masks and have plenty of hand sanitizer. Workers are “going home to babies,” Janelle says, “[and] to grandparents,” and Amazon is trying to keep them safe. Last year, there were regular outbreaks in warehouses across America, and tens of thousands of workers were infected. Alec MacGillis, in his book on Amazon, Fulfillment, published in March, reports that workers relied on rumors about COVID infections because the company refused to inform them when someone was out sick. That’s just last year. Over the company’s history, workers have been injured and have even died on the floors that look so tidy in these videos.

Amazon’s video output coincides with the new style of tech worker movies. In one of the first employee introductions, posted in 2017, “Amazon Area Manager, Day in the Life,” the workers—managers, but on the floor—mention where they went to school (“Virginia Tech with a business management degree”). It is a perfect illustration of the mangled trajectories of tech disruption and social mobility in America: Dropouts can be tech billionaire CEOs, while college graduates end up in Amazon warehouses, and anyway, the opportunities for those without degrees are minimal for everyone besides a privileged class of white people. As Amazon attempts to stage manage its most vulnerable workers, movies like Sorry We Missed You and Lapsis bring the reality of the job in focus.




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