California moves cruelly on gig economy workers

The gig economy got a boost in this week's US election, thanks to the passage of a referendum measure on California's state ballot, Proposition 22. This will allow rideshare companies Uber and Lyft, and delivery company Doordash, to treat its gig workers, such as drivers, not as employees but as independent contractors.

This backward-stepping measure was written by Uber, Lyft and Doordash – yes, really – which have been involved in ongoing litigation over a recent California law that mandated such workers be treated as employees, entitled to full worker benefits, including health coverage and unemployment insurance.

Some of the campaigning was questionable, to say the least.

Uber drivers in the state were subject to screens pushing them to advocate for the measure when they checked in to start a driving shift, and passengers booking a ride had to click through screens warning them of the likelihood of increases in fares if the measure failed to be approved.

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The gig economy is based on Big Tech exploitation of job seekers with the least power and the fewest rights

In terms of the advertising money spent by its tech company proponents – more than $200 million, according to the New York Times – Prop 22 is the most expensive referendum proposal ever on the state ballot.

After the victory, campaign spokesman Geoff Vetter said: "Prop 22 represents the future of work in an increasingly technologically driven economy."

If so, what a depressing, and deceptive, vista that presents.

The gig economy is based on Big Tech exploitation of job seekers with the least power and the fewest rights. Its workers tend to be younger, and often are immigrants, people who often find it difficult to get more stable work.

In a country like the US, such workers are far more exposed than in Europe. One of the most basic, alarming differences is that American gig economy workers live in a nation without a national health service, and with extraordinarily expensive medical costs. Most US workers still depend on healthcare coverage from an employer.

EU citizens, of course, all have medical coverage as a norm, as well as entitlements to work breaks and paid holiday time. In addition, the European Parliament gave gig workers significant additional rights in April, passing a law that sets a baseline for workers' rights and requires greater transparency from the companies that employ them.

EU gig workers now have better protections around reliable working hours and compensation when work is cancelled, and there are new limits to so-called “zero-hours” contracts that provide no guarantee of work.

The EU described gig workers, who often work multiple jobs of this sort to make ends meet, as “the most vulnerable employees on atypical contracts and in non-standard jobs”.

The World Economic Forum also highlighted this vulnerability in March, stating: “Wages, employment status and working conditions are among the most common causes for protests, strikes and other forms of industrial action being taken by people for whom ‘gig’ work doesn’t add up to a decent living, or provide the basic respect to which people are entitled.”

Ethical context

Or, to put it in an ethical context, here's what Dr James Caccamo, an associate professor of theology at St Joseph's University in Philadelphia, told me in 2019 during a discussion of a paper on ethics and the gig economy that he presented at a conference in Munich.

Work, he said, “shapes who we are”. The gig economy “likely fails to provide the things that would support integral human development – wages, collective bargaining, health coverage, unemployment benefits. It effectively removes all the liabilities of a company and shifts them on to the public sector.”

The pandemic has exposed just how vulnerable – yet critical to society – such employees are. We now rely on them, yet they have had little choice but to work, in jobs that require regular contact with others.

Media stories have highlighted how some have continued to work even when they have felt ill, because they have no other income, creating the risk of virus spread. Again, this situation is exacerbated in the US, where such workers may have no entitlement to sick or severance pay, and may have long delays in receiving unemployment support.

The California vote, coming during the pandemic, is particularly insidious and cruel, because it enables tech companies to play those who have off against those who have not in a sad and false argument that appeals to passengers’ wallets. Why would service users vote for widely threatened higher fares and delivery costs?

Yet as Caccamo and the WEF suggest, many of those gig workers who continue outside a stable work net will end up depending on other taxpayer-funded supports across a range of social services. Meanwhile, fractures and divisions across communities continue to grow.

Other gig economy tech companies will look at ways of leveraging this vote in their own direction, too.

However, this is unlikely to be the end journey for gig economy workers’ rights. Federal agencies, and lawmakers in the US are, as in the EU, looking at greater regulation of the tech industry as a whole.

And federal rights would override state employment law. In this critical area, Big Tech shouldn’t be given a free ride – and the rest of us should stop feeling entitled to a cheap one.