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Lyft : Gig companies’ push for state-level worker laws faces divided labor movement

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June 9 (Reuters) – Uber and other gig economy companies are
trying a new approach to ending their battles with unions, and
getting ahead of possible federal regulation that could upend
their business based on classifying workers as independent
contractors.

In New York, for example, gig economy companies are working
with several unions including the Machinists and Transport
Workers Union to strike a compromise that would allow drivers
and food delivery workers to organize in a union and negotiate
minimum pay and other benefits without being reclassified as
employees.

With the support of the unions, the gig economy companies
are pushing state lawmakers in Albany to pass a bill that would
allow workers to negotiate wages and caps on company commission
fees, and provide unemployment insurance in some circumstances.

Among the most vocal opponents of a proposed bill to achieve
that goal is the Service Employees International Union’s (SEIU)
northeastern Local 32BJ, which says the compromise would
enshrine gig workers’ misclassified status and create a
company-sanctioned union that would only further erode workers’
rights by setting no floor for the negotiations.

“This legislation moves workers backwards,” Kyle Bragg,
32BJ’s president said. “There’s too much company manipulation.”

Amid the controversy, efforts to have the bill introduced
before the end of the state’s legislative session this week
failed.

New York is just one of several states where gig economy
companies led by Uber, Doordash, Lyft
and Instacart are courting unions and state officials in an
effort to cement their workers’ status as independent
contractors across the United States.

FAULT LINES

The push by the gig economy companies has exposed divisions
within organized labor over whether to bargain with the
companies, or insist on workers being reclassified as employees
with full protection of U.S. labor standards – and a clear legal
right to join unions.

The rifts at times also run within the same union. For
example, while 32BJ rejects the New York bill, SEIU President
Mary Kay Henry in the past said she would back workers’ demands
in reaching a deal with companies. The SEIU declined to comment
for this story.

Similarly, the New York chapter of the AFL-CIO, the largest
U.S. labor federation, backs the compromise proposal, while
members of its Colorado chapter said they were opposed to
bargaining agreements with the gig companies.

According to a Reuters review, the companies over the past
few months set up lobbying groups in Massachusetts, New York,
New Jersey, Illinois, Colorado and Washington to push for laws
that declare app-based ride-hail and food delivery drivers
independent contractors, while proposing to offer them some
benefits. In some states the companies hope for buy-in from
labor groups, company and union officials said.

The companies are trying to build on their success in
California, where voters approved an industry-backed ballot
measure that exempts ride-hail and food delivery workers from
rules that require other types of contractors to be classified
as employees, and provides them with limited benefits.

The companies say they pursue tailored policies for each
state to combine flexibility for their mostly part-time workers
with benefits and protections. They have yet to offer concrete
proposals in most states.

Some executives hope state-based independent contractor laws
can also forestall federal action by the labor-friendly Biden
administration, which has vowed to end the misclassification of
workers as independent contractors.

“The models that are developed at the state level can be
given a framework at the federal level,” Lyft President John
Zimmer said during an interview last month.

While any state law could be superseded by federal rules,
Zimmer’s calculation assumes that the U.S. Labor Department is
less likely to act once facts on the ground are established.

The companies’ race for state backing runs counter to the
labor movement’s single biggest legislative priority, the
passage of a far-reaching labor reform bill known as the PRO Act
in Congress. The bill would make worker organizing easier and
among other things reclassify most independent contractors as
employees for the purpose of collective bargaining, though not
for wage laws and benefits.

The bill is unlikely to pass the Republican-led U.S. Senate,
but even if it did, several years of regulatory and court
wrangling would ensue, a time during which gig workers’ rights
would remain unchanged, said Wilma Liebman, former chair of the
National Labor Relations Board.

SKEPTICS ON BOTH SIDES

Some union figures have therefore taken a more pragmatic
approach. Andy Stern, former president of the SEIU and at the
time one of the most politically influential labor leaders, for
the past six years has been trying to strike deals between the
gig companies and unions, including failed attempts in
California to ward off the ballot measure.

The California referendum, a costly victory for the gig
companies, was also a cautionary tale for unions, as well as for
drivers, who are now left without any avenues to organize or
object to the terms stipulated by the companies.

Stern said internal union surveys in New York had repeatedly
shown that a majority of drivers did not want to be employees
and said debates focused solely on reclassification were based
on unrealistic and purist sentiments.

Stern instead advocates for drivers’ rights to organize in
unions and negotiate their own contracts.

“Give a worker a union and collective bargaining and they’ll
decide themselves what kind of status, wages and benefits they
want. People who believe litigation and legislation are the
solution have failed these workers,” Stern said.

Stern and others dubious of reclassification point to
Seattle and New York City, where years of union efforts to
organize drivers have led to the only driver minimum wage laws
in the country.

Uber and Lyft have rocky histories with unions and workers
who want to organize. The companies in 2015 enlisted the U.S.
Chamber of Commerce for a years-long court battle against a
Seattle law spearheaded by the Teamsters union that would have
allowed ride-hail drivers to bargain collectively.

Uber more recently appears to have opened up to such
agreements, however. The company last month recognized Britain’s
GMB union as the collective bargaining unit of its 70,000
British drivers. Lyft’s Zimmer said the company was having
constructive conversations with labor leaders.

Many union officials remain skeptical about basing workers’
fate on the goodwill of companies.

“You never get everything you want out of collective
bargaining…and it would be better to give drivers more options
and protections under the law,” said Kjersten Forseth, political
and legislative director for the Colorado AFL-CIO, which plans
to make state-based gig worker policy solutions its focus over
the next two years.
(Reporting by Tina Bellon in Austin; Editing by Andrea Ricci)

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Gig Workers in Limbo Amidst California’s Reopening

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A window of a Subway Restaurant with a black sticker that reads: "Order with Uber Eats"
Source: Wikimedia Commons

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). 

Thin cloth mask sent to Ivan by Postmates (Photo: Ivan Salinas)

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.

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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.

Pervasive Paranoia

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.”

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Transforming accountancy for the gig economy’s “job gold rush”

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The Covid-19 pandemic had a significant impact on everyday work life, not only were employees forced to work from home, but for the first time in a long time, permanent employment faced a stark drop due to unprecedented job losses. Businesses had to cut back on in-house resources and reliance on the temporary labor market has meant this sector has boomed. The ‘gig economy’ is up 25 percent in the last two decades and now includes one in seven UK workers. 

Now, as Covid restrictions are eased, this has triggered a “gold rush” of employment vacancies to fill, with recent research showing demand for workers is at its highest rate for over 23 years, with another sharp growth in the temporary labor market. Industries, like hospitality which have been closed for over a year, are opening their doors once again and need the labor. 

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