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The Future for Uber and Lyft Drivers if Their Employers Win the California Fight? Listen to Their Cambodian Counterparts.
Gig workers the world over face false arguments about app-based business models providing “flexibility” and “independence.”
Research & Commentary
August 31, 2020
by Bama Athreya
The fight over so-called “gig” work has come to a head in California. Lyft has even threatened to suspend all operations in the state. Why would the company even think of pulling out of such a lucrative market? This particular showdown is about what we consider employment, and it has global implications for the future of work.
The fight started in 2018, when California’s highest court had the audacity to suggest that Lyft, Uber, and other platform companies abide by the nation’s employment laws. The companies refused to comply. So in 2019 California’s legislature passed a new law, Assembly Bill 5 (AB5) to reinforce the point. The companies continued to misclassify their workers, so California’s Attorney General brought suit against them in May. Now, nearly a year later, Lyft’s response to a court order to obey the law was to threaten to close down.
While they fight California’s Attorney General and courts, the companies are aggressively pushing a ballot initiative to repeal AB5. The initiative, Proposition 22, relies on false premises to make the case that it would be good for drivers, as UC Berkeley’s Labor Center has helpfully noted. When the California Attorney General created an accurate description of what was in the measure, companies sued to change the language to suit their PR spin.
The Attorney General’s language will be on the ballot, but the spin continues, and the battle will be intense. Supporters recently stooped to tweeting the home address and other personal information of Veena Dubal, an employment labor law professor at the University of California Hastings College of the Law and a vocal critic of Uber and Lyft.
Platform companies are spending upwards of $110 million to convince Californians to accept working conditions that are more common to developing countries. The companies are also placing gig worker statements in major media outlets and social claiming that they benefit from their supposed “flexibility” and “independence.”
I wish Proposition 22 supporters could meet some of the platform workers I’ve met and interviewed in other countries. In many countries, workers have always had “flexibility” and “independence.” They call it informal work. And now that the apps have entered their economies, they are actually losing their autonomy in frightening ways. Here are two stories of how apps changed their lives, but not in the ways they had imagined.
In Cambodia, a country where the minimum wage is just a few dollars a day, motorcycle rickshaws (tuk tuks) have been common for many years. In the past, drivers would negotiate fares directly with passengers. On a good day, a driver in the country’s capital city might net $10 or so. They had “flexibility” and “independence.”
They also have had very few other options for better, more stable, higher-paying jobs. It wasn’t a great life — but today, it’s even worse. Drivers I met last year told me you can no longer get a passenger without an app. Drivers no longer have freedom to haggle over fares or even know what fare will be paid before they accept a ride. Take “Vuthy,” who told me he can no longer refuse a ride even if the fare isn’t profitable. If he doesn’t accept rides at whatever fare is set by the platform, he risks being “deactivated” or removed from the platform. And this could mean losing his livelihood.
Another story comes from India. Jude had been a successful entrepreneur prior to the apps entering the market. He owned a half dozen cars, employed a few other drivers and provided private hire car services for clients in Chennai, a major Indian city. When Uber entered the market, it promised it was looking for “partnership” with independent contractors like him. Jude thought this seemed promising. After all, his business experienced the normal friction of getting the word out to clients, and the apps seemed like an easy way to enhance his client base.
Little did he know that the apps would actually take away his existing longstanding client base. Uber took client data not only from Jude but from larger private hire companies, as well, and far from providing freedom or flexibility, meted out information in small bits as to where and when to pick up passengers. Jude and his drivers lost the ability to negotiate fares and other terms of service. And he found he couldn’t leave the platform without losing his entire client base.
This is the model that the companies seek to defend in California. The scripted testimonials for the Prop 22 campaign site been revealing. Spokespeople admit they use gig work to supplement regular income. They talk about the need to “hustle.” Here’s a typical recent response from @ChopstixKisser on Twitter: “The whole gig economy/on demand model is what made it successful. It’s one of my two hustles, the other being managing 6 apartments, which is enough work where it would very difficult/impossible for me to also manage a W-2 Style job.” It all sounds very much like India or Cambodia.
In the Prop 22 campaign, the companies cheerfully claim that “80 percent of drivers work less than 20 hours a week.” And this misleading statistic belies a critical feature of their business model: the platforms rely almost entirely on 20 percent of the workforce to do almost all the work. They couldn’t survive without that 20 percent of the driver base that works full time and handles 80 percent of the actual gigs. Mary L. Gray and Siddarth Suri describe this lopsided distribution of gig work in detail in their excellent book Ghost Work.
So why do the companies need the 80 percent, who only provide a fraction of the labor? One way to see it: the 80 percent are being used as a huge on-demand scab labor force. So those who are extolling the virtues of their “flexible” gigs should keep firmly in mind that this “flexibility” exists because of the full-time workers who keep the company solvent.
By debasing California’s labor classification laws, it’s possible the companies are creating a slippery slope to undermine even our most basic labor protections. Might we descend into a return to child labor and modern-day slavery? While this may seem farfetched, the U.S. economy is no longer “developed.” It’s converging with other informal economies around the world.
So it’s important to consider the situation of a Cambodian tuk tuk driver in debt for his vehicle and unable to make payments because of decreasing fares. Or in India, where a union has reported that drivers are committing suicide because their vehicles are being repossessed by the banks. In both these countries, debt bondage can lead whole families into slavery. We know tech is transforming economies so we have to imagine these ways in which the United States might be transformed.
From Cambodia to California is a shorter distance than we may think. Prop 22 will only accelerate the pace of exploitation.
Bama Athreya is a Fellow with Open Society Foundations. Follow her at @bathreya1 or @PodcastGig