Double Standards and the “Gig” Economy

Farmers who want to provide an incentive for their harvest crews to work faster use a pay system called “piece rate”.  Workers get paid a certain amount for every pound or other unit of strawberries or tomatoes they harvest.  State and federal labor laws require that the “piece rate” to be set so that the slowest worker in the field still makes minimum wage.
Due to Terra Firma’s wide diversity of crops, we do not use the piece rate system but rather a standard, per-hour system.
I know from speaking with workers that the piece rate system can be lucrative for both workers and employers when done properly.  But labor regulators have always been suspicious of the piece rate system, and farms that use it are frequently audited to make sure that they are not abusing the rules.  Most recently, two farms in Oregon were fined heavily because their workers’ underage children were helping their parents harvest blueberries after school.
So I was fairly shocked to hear a podcast this weekend about people who work in the “Gig Economy”, using ride-sharing and other apps like Lyft, Task Rabbit and Insta-Cart to make a living.
These folks use their own cars to give people rides, pick up their groceries, and whatever else the app users want them to do.  The apps of course generate the business and collect the money.
I am familiar with controversy over whether Uber drivers are “independent contractors” as the company claims, or employees as the State of California’s lawsuit claims.  But I didn’t realize the full extent of the controversy over this system, which the podcast refers to as “Instaserfdom”.
The podcast makes it clear that even before subtracting costs like car insurance, gas and maintenance that drivers have to pay themselves, people can easily fail to make minimum hourly wage doing this work.  The law is pretty clear on this for employees:  It’s not enough for a business to make promises that someone could earn minimum wage or more.  You have toguarantee they will.
None of these companies pay people “between gigs”, so to avoid sitting around — unpaid — waiting for work, many or most of them sign up for multiple apps to try to ensure they will make a full day’s income.  But the apps have caught on, and some now penalize users who reject pickups or deliveries because they are busy doing something else.
And independent contractors don’t receive Workers Compensation insurance. So a driver hurt in an accident would receive no income despite having been injured while on the job.
If you listen to the podcast, you will hear numerous other ways that the app companies have cleverly designed their technologies to maintain the illusion that their “partners” are independent contractors.  But it’s pretty hard to argue that very many of them are really their own bosses.
Our society can and does argue about the rules and regulations that we apply to our businesses, and if companies like Uber and Insta-Cart can add their voices to the mix.  But it’s another thing entirely to say “The rules don’t apply to me” and talk about some “new paradigm” of work.  They have an unfair advantage, period.
If a farm selling $2 billion a year (Uber’s sales) worth of strawberries or tomatoes designed an app system to organize and pay its workers, and started calling them independent contractors, it would get a cease and desist order in a week.  It’s not an unfair analogy; it appears that the pay scale for farmworkers and Uber drivers is pretty similar.  So it is profoundly disturbing that “Sharing Economy” companies have been allowed to continue using this system for so long already.  They need to grow up and play by the rules like every other business in the U.S.
On the other hand, if Uber wins the class-action lawsuit against it, it will cause a massive pushback from other large companies against any number of labor laws that are seen as outdated and archaic.  I’m hoping the state has a good legal team.
Thanks,
Pablito

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