App Workers in the Gig Economy

Precarious Labor During the COVID-19 Pandemic

BY NICOLE ASCHOFF | May/June 2020

This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org

This article is from the May/June 2020 issue.

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Smartphones have become ubiquitous over the past decade, offering users unprecedented access to each other, to information and entertainment, and to services, especially for well-off professionals. With a tap or a swipe people can restock milk and bread from Instacart; avoid the lunch-time rush with a tasty bite delivered through Seamless; or hail a Lyft when afterwork cocktails turn tipsy. Whatever you need—“there’s an app for that!”

It’s not entirely clear how many people are working in these app jobs—piecework gigs mediated through a smartphone app. In the United States, estimates of “on-demand” app workers who earn money via online intermediaries such as Instacart and Uber vary widely. The Federal Reserve estimated that 16% of adults earned money from app jobs in 2017 while the Bureau of Labor Statistics estimates the number of contingent workers to be roughly six million people.

Even absent concrete numbers, it is clear that the emergence of app jobs in the past decade is a significant development in the evolution of work in the United States. In fact, app workers have become so important that many have been deemed “essential workers” in the battle to quell the coronavirus pandemic. As Americans grow increasingly wary of venturing outside, many are relying on their Instacart app to get groceries delivered to their homes. Some are even calling an Uber to take them to the hospital when they fall sick. A driver in San Francisco recalled how halfway through a ride his young passenger commented that he was worried that he had coronavirus because he had been coughing up blood and was actually on his way to the hospital.

App jobs are part of what employment and labor market expert David Weil calls the “fissuring” of the workplace, whereby employers “change the boundaries of the firm itself” and “employment is no longer the clear relationship between a well-defined employer and a worker.” The spread of multitier subcontracting has enabled companies to plan their budgets around paying for services rather than paying wages. App jobs are the next step—a testing ground for companies to see how much they can force workers, consumers, and governments to take on the costs of production.

Pushing Costs onto Workers

Uber exemplifies the logic of app work. Drivers provide their own vehicle (paying for gas, repair costs, and insurance) and phone, while Uber provides only the software and its network. Uber takes a 25% cut from each ride, yet drivers are not considered employees and the company is not responsible for their safety. Uber is also not responsible for the safety of its consumers (riders), nor the increased congestion and pollution it causes in urban centers. In San Francisco, for example, transportation experts concluded that transportation network companies such as Uber and Lyft were responsible for more than half of the increase in roadway congestion between 2010 and 2016.

App jobs are appealing at first glance. There are few barriers to entry. You can work when you’re able, and the ads promise decent money. You just need a smartphone, often a car, and a willingness to work. Matthew Telles, a former Instacart “shopper” and member of the Gig Workers Collective, told Democracy Now! that, at first, he loved delivering for Instacart. It “paid great and gave [him] access to all the amazing buildings downtown, like the top of the Sears Tower.” In a landscape of degraded work, app jobs can seem like a step up from the frustrating world of scheduling software and low-paid, irregular shifts that are common in the retail and fast-food sectors. Some app jobs can even feel like being your own boss. Tech companies certainly push this interpretation, emphasizing how they provide the digital platform—the digital infrastructure that facilitates interactions (often commercial) between at least two people or groups—and you provide the hustle. Uber, for example, is adamant that it is not the employer of the roughly one million drivers worldwide who use its app to find people to ferry around.

Researchers at Carnegie Mellon’s Human-Computer Interaction Institute aren’t so sure. They call the Uber arrangement “algorithmic management.” App workers who use these platforms to earn money don’t have easy access to a flesh-and-blood manager. Instead they interact with an algorithm—a set of exact instructions to solve a problem or perform a computation. Algorithms can be written to perform simple tasks, like adding or subtracting numbers, or complex tasks, such as playing a video or, in the case of Uber, telling the driver where to drive, paying them what they are owed, and so forth. Algorithms effectively transform app workers’ phones into their boss.

Turns out, it’s not so great to have a smartphone as your boss. The modern work relationships enacted through our phones show not only how phones are a dream come true for the well-off, but also how the 21st-century working class is being made, and the divide between the haves and the have-nots is being reinforced.

In the United Kingdom, drivers for Deliveroo, a food delivery app—who are disproportionately immigrants and poor people of color—are closely monitored by Deliveroo’s algorithm. They have 30 seconds to respond to the app when it pings them, and they don’t know where they’re going until they swipe “accept delivery.” If the driver doesn’t accept, or is too slow, meaning the “time to accept orders,” “travel time to restaurant,” “travel time to customer,” or “time at customer” are longer than what the algorithm estimates they should be, her account can be deactivated.

Precarious Labor

Reliable data on how much pay app workers take home is hard to come by. Ridester’s 2018 Independent Driver Earnings Survey found that drivers of Uber’s most popular service, Uber-X, made a median wage of $14.73 an hour in 2018 after tips but before gas, insurance, and repairs—substantially less than a living wage. Pay can change from one day to the next following tweaks to the app by the company, and workers often have a hard time understanding how their pay is calculated. Last year Instacart and DoorDash drivers, for example, discovered that their companies had been routinely stealing the tips customers left them on the app.

In practice, app jobs are just the latest form of precarious labor. On-demand workers are not entitled to minimum wage, sick days, overtime pay, safety protections, unemployment or health insurance, a pension plan, or disability pay. App workers in service jobs are held hostage to the reviews of fickle customers, and if they have a problem, their app boss usually isn’t much help. Stories abound of app workers who have found it difficult or impossible to get help from a real person at their companies when they needed it.

The coronavirus crisis is a real-time demonstration of just how vulnerable app workers are. After the pandemic brought the economy skidding to a halt, tens of millions of Americans have been thrown out of work, including app workers. The U.S. government passed a stimulus bill, providing federal unemployment payouts to ease the financial pain of the crisis. Significantly, in crafting the bill, app workers were recognized for the first time as real workers and made eligible for stimulus funds. Getting access to these funds has proven difficult, however. Outdated software, understaffed state agencies, and a delay by the Department of Labor in providing official guidance on how the program should be administered have meant relatively few app workers have received relief payments nearly two months into the shutdown.

Moreover, for the millions of app workers still working, a lack of safety equipment and workplace rights have made app jobs increasingly dangerous. In a Medium post, the Gig Workers Collective say Instacart has “turned this pandemic into a PR campaign, portraying itself [as] the hero of families that are sheltered-in-place, isolated, or quarantined.” But Instacart, the collective argues, has “not provided essential protections to Shoppers on the front lines that could prevent them from becoming carriers, falling ill themselves, or worse.”

Thousands of Instacart workers “walked out” on March 30, refusing to fill orders on the app in order to call attention to their concerns. They demanded sick pay, hazard pay ($5 extra per order and a minimum 10% tip per order), and personal protective equipment to be provided by the company. The company brushed off the action claiming the walkout represented only a small fraction of the company’s 200,000 shoppers and did nothing to disrupt the app’s functionality.

App workers aren’t the only front-line workers who are anxious about safety and stress during the pandemic. Grocery store employees, health care providers, cleaners, warehouse workers, and truck drivers are just some of the workers dealing with a lack of protective equipment and demands to keep working while everyone else stays at home. This shared sense of struggle shaped the May Day walkouts and demonstrations by frontline workers at Amazon, Instacart, Whole Foods, Target, and FedEx. But app workers face additional challenges to organizing because they aren’t officially recognized as employees and often the only thing connecting them to fellow workers is an app they don’t control.

Organizing App Workers

Over the past few years app workers have been fighting back—demanding recognition and fair compensation for the work they do and developing strategies to overcome these organizing hurdles. In 2018 Uber and Lyft drivers, working with the New York City Taxi Workers Alliance and the Independent Drivers Guild, convinced the city to implement the country’s first cap on drivers, limiting the number of ride-hail vehicles that could hit the streets in an effort to boost pay for all drivers. Last year California legislators approved Assembly Bill 5, a landmark bill that forces app-based service companies (such as Uber and Lyft) to reclassify their workers as employees rather than independent contractors.

Some more traditional labor unions have made tentative efforts to organize app workers. The United Food and Commercial Workers Local 1546 in Chicago, for example, is trying to sign up Instacart shoppers. App workers are also forming new organizations. The Gig Workers Collective is nonprofit group that bills itself as a “first responder” designed to “take the lead in organizing immediate action to new grievances.” A number of state-based groups have also emerged. In California, Gig Workers Rising and Mobile Workers Alliance organized a three-day caravan of Uber and Lyft drivers in support of Assembly Bill 5.

Platform companies who desperately want to maintain the digital piecework model are pushing back hard against these initiatives. In New York City, Uber and Lyft sued the city over the driver cap and implemented a punishing new tiered quota system for drivers. The rideshare companies also sued the state of California to prevent their drivers from being considered employees and are working on a ballot initiative to be exempted from the new regulations. In the meantime, they are simply ignoring the legislation, prompting California Attorney General Xavier Becerra to file a lawsuit against Uber and Lyft in San Francisco County Superior Court.

The federal government’s belated recognition that app workers are real workers that deserve protection, even if only rhetorical at this point, is a positive shift, however. It is a signal that support for app workers is growing and that tech companies will find it more and more difficult to hide abusive employment relationships behind slick apps and feel-good stories.

NICOLE ASCHOFF is a writer, editor, and sociologist. She is the author of The New Prophets of Capital, an editor-at-large at Jacobin magazine, and managing editor of the Boston Institute for Nonprofit Journalism.

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