Gig Companies Are Disguising Exploitation as Social Justice
From California to Massachusetts, companies like Uber and Lyft are promoting legislation that misclassifies gig workers. What’s worse, they’ve convinced some people that their pursuit of cheap labor is actually a crusade for equality.
In November 2020, the people of California voted to pass Proposition 22, which classified workers for rideshare and delivery companies as independent contractors instead of employees. The ballot measure was a direct response to the California State Legislature passing Assembly Bill 5, which had classified app-based workers as employees, with all the legal protections that designation entails, just over a year earlier.
Companies like Lyft and Uber claimed benevolence. They argued that AB5 would force them to raise prices and cut their number of workers, if not withdraw completely from the state. They wanted to help their workers so much that they spent more than $200 million convincing voters that basic labor rights would harm drivers.
Labor experts, activists, and organizers collectively warned the public that Prop 22 would set a dangerous precedent for pay and working conditions, but their warnings were drowned out by the barrage of corporate propaganda. Big Tech even elicited support from some racial justice organizations, which proceeded to make the case that precarious gig work provides jobs to people of color and is therefore an anti-racist endeavor.
In the end, gig companies got the victory they paid for. And they won it by confusing voters: leading up to the election, polling showed that 40 percent of people who expressed concern about workers’ interests voted yes on Prop 22. The ballot measure was later ruled unconstitutional by a judge, but its success changed the game for gig companies, providing a blueprint for how to cut down on labor costs and maximize profits at workers’ expense.
One of the most progressive states in the country had just voted to gut worker protections. It was time for Uber, Lyft, and their contemporaries to take the show on the road.
The Massachusetts State House is currently considering Bill H.1234, which is essentially a Prop 22 clone. Now that the gig companies have shown their hand, labor advocates are using the lessons learned in California to fight for a different outcome.
Flexibility Is a Four-Letter Word
Prop 22 was framed as a compromise between providing benefits and protections to drivers and maintaining “flexibility.” Companies would provide training, guarantee a minimum wage, and make available a health care stipend to qualifying drivers.
Immediately after Prop 22 passed, the gig-economy companies announced price hikes to cover the cost of the legislation they claimed would keep prices the same. The promised minimum wage of $15.60 an hour proved to be just another piece of Silicon Valley vaporware: taking into account the loopholes, onerous qualifying metrics, and expenses for drivers, the UC Berkeley Labor Center calculated that the true average minimum wage for drivers would amount to $5.64 an hour. Accessing health care similarly remained out of reach to most rideshare and delivery app workers.
Big Tech spends a lot of time and money characterizing worker protections as unnecessary and restrictive. Wes McEnany is the director of the Coalition to Protect Workers’ Rights, a grassroots organizing campaign currently working to oppose H.1234 in Massachusetts, the sequel to Prop 22. He spoke to Jacobin about what the passage of H.1234 would mean to app-based gig workers:
Drivers want basic rights too. There’s no workman’s compensation. If you are a full-time employee in any other industry and you lose your arm on the job, that’s worth $25,000. If you’re a driver, that’s worth $0. They don’t get to contribute anything to Social Security, so if you do this for twenty years, well, you’re not going to have Social Security benefits.
The reason why workers are afforded basic labor protections is that the labor movement secured them through struggle: people have fought, bled, and died to secure these rights for the working class. But these sacrifices mean little to the Flexibility and Benefits for Massachusetts Drivers committee. So far it has raised $17.2 million to pass H.1234 in the Bay State, most of which came from a single $13 million donation from Lyft.
The bill focuses on the creation and implementation of portable personal benefit accounts. Drivers for rideshare and delivery companies would be able to create these flexible spending accounts, and the companies they work for would fund them. These accounts would be administered by banks or otherwise inclined businesses (presumably for a fee), and in theory, workers can use them for necessary expenses or when times are tough.
For a company to fund these accounts, drivers must earn $2,550 within three months. But one study, which looked at loan application data, found that the average rideshare or delivery driver earns well under $400 a month per platform, which is why most gig workers use multiple apps.
Myra Shane is a longtime driver for Lyft, and flexibility means very little to her when the bills come due:
These platforms seem to think we want more flexibility, but that cannot come at the expense of livable wages. With the low pay we’re receiving, many drivers are struggling with necessary costs like childcare, housing, and food. On top of that, we’re left without benefits. These expenses add up, and it’s nearly impossible to save for the future.
Gig companies have always maintained that people use their apps for the flexibility, not the wages, and that this flexibility is not available to full employees. However, the kind of flexibility in work that Uber and Lyft are trying to sell is not a guarantee for their drivers, nor is it definitionally exclusive with traditional employment. It’s a false choice, meant to obscure the real reason why this issue is so important to rideshare and app delivery companies: a precarious workforce of individual independent contractors competing for jobs and legally barred from collectively bargaining for better pay and working conditions means cheap labor.
Because their business model fundamentally relies on the precarity of workers, it’s particularly cynical that Lyft and Uber have decided to make “flexibility” a social justice issue.
At the height of the unrest sparked by the murder of George Floyd, Uber proudly put up billboards instructing self-identifying racists to delete the app. They were campaigning for Prop 22 at the exact same time.
The gig companies have a few prominent minority political voices on their side, like former Barack Obama advisor Valerie Jarrett, who sits on the board of Lyft. In an interview with Yahoo Finance, Jarrett described the founders of Lyft as “shrewd businessmen. But they also believe in diversity as a strength. They believe in a social conscience and a commitment to our cities.”
Among the litany of political consulting firms brought on to facilitate the passage of H.1234 is Conan Harris & Associates, whose founder, Conan Harris, is the husband of squad member Ayanna Pressley. It should be noted that Representative Pressley is publicly against the misclassification of gig workers. Her staff told the Boston Globe that her stance has not changed.
Back in California, Prop 22 was able to gain the support of ten NAACP chapters, the California Black Chamber of Congress, and Black Lives Matter Sacramento along with several other prominent social justice organizations. Meanwhile, across the country, gig companies have made donations to community groups that have then penned op-eds in local publications advocating for independent-contractor status. Pro-misclassification articles have appeared in minority-focused publications in states like New York, Illinois, and Massachusetts.
The message to communities of color, crafted by Lyft and Uber and disseminated through their activist group allies, is that flexibility is important for bringing economic opportunities to underserved areas. People who have difficulties in obtaining traditional nine-to-five work have a chance to earn money in their communities, the argument goes — never mind that gig companies constantly assert that gig work is mainly meant to supplement income and not replace traditional employment.
The unnamed authors of an op-ed in Chicago’s Spanish-language El Dia newspaper describe the dangers of forcing employee status on minority drivers:
Additionally, residents of the South and West sides are among the biggest users of ridesharing. If companies are forced to operate under these arbitrary, constricting rules, they will need to put drivers on shifts where demand is highest. That could lead to the same old story that we’ve seen so many times: downtown and North Side neighborhoods will get better service at the expense of the South and West sides.
The “arbitrary, constricting rules” to which the piece refers are in fact guarantees and protections that workers have spent over a century fighting for. Uber and Lyft aren’t trying to create opportunities for marginalized people — they are trying to deny basic workers’ rights, plain and simple.
Veena Dubal is a Law professor at University of California, Hastings College of the Law who studies the relationships between the law, technology, and worker precarity. She also sits on the board of the Coalition to Protect Workers’ Rights. Dubal spoke to Jacobin about how certain social justice organizations come to be co-opted by systemic forces of inequality:
Two things are going on with organizations that say they are committed to social justice and that support the economic marginalization of app-deployed workers. One is unquestionably that they are often being financially supported by the companies that exploit app-deployed gig workers — either directly or indirectly. The second reason is that they don’t have a clear theory of social change, and therefore do not understand how economic marginalization impacts racialized criminal justice issues, racialized environmental justice issues, and racialized gender justice issues. Some of these organizations have such limited analysis that they see these issues in silos, or they truly believe the neoliberal propaganda that people can pull themselves out of poverty through unpredictable, insecure work.
In her paper “The New Racial Wage Code,” published in the Harvard Law & Policy Review, Dubal provides a historical context for the fight over Prop 22 and presents what should be a sobering historical connection.
Like Uber and Lyft, early twentieth century industrialists campaigned for differential wage regulations and even sectoral carveouts for majority Black workforces, denying these workers access to minimum wage protections, unemployment insurance, workers’ compensation, and the protected rights to organize and collectively bargain. Over the protest of many African American workers, civil society leaders, and organizations, they succeeded.
Gig-work drivers are a majority–minority and immigrant population. Singling them out as independent contractors calls to mind the agricultural and domestic workers who were carved out of the first labor laws and later the New Deal. The cruel joke is that where capitalists once leveraged the naked racism of the time to ensure access to a cheap and disposable workforce, this time they are using the aesthetic of social justice and anti-racism to do the same.
Economic Justice Is Social Justice
Fortunately for workers, the conditions on the ground in Massachusetts are more favorable than they were in California. The Coalition to Protect Workers’ Rights boasts a much more impressive group of sponsoring organizations, and this time the NAACP is on the side of workers. Massachusetts has a strong tradition of labor organizing, and while it may not have as much of a treasure chest as Lyft and Uber, the “vote no” campaign knows how to knock on doors.
Perhaps most importantly, Prop 22 has a track record now. “A lot of drivers like myself, including those who are driving full-time, are barely getting by on our current wages, and Big Tech’s proposal would allow them to pay us even less,” said Manuel Santana, a current driver for Uber and Uber Eats. “It doesn’t matter what they’re claiming, we can look at what happened in California with Proposition 22. Riders will pay more, drivers’ wages will be slashed, and Uber and Lyft will continue to profit off of us all.”
For the Coalition to Protect Workers’ Rights and other labor rights groups, social justice isn’t about putting up anti-racist billboards; it’s about securing real victories for the people who are most marginalized in society. The exploitation of workers is a social justice issue, even if it is rarely discussed as such. This is what organizers like McEnany want to communicate to voters:
This is not only about skirting one hundred years of labor law, but also one hundred years of tax law, one hundred years of liability law where these companies have no liability placed on them at all, and everything is placed on the drivers. Part of the problem and why so many drivers are people of color is because, frankly, there hasn’t been enough done for other industries and in other opportunities, and so the only way to make ends meet is to pick up these types of short-money jobs.
The “vote no” on H.1234 campaign will be outspent by Lyft, Uber, Instacart, and the like. But just as California provided a blueprint for Big Tech to sell worker precarity as liberty for the oppressed, labor rights advocates have a long tradition of struggle that provides a blueprint for how to defeat them.