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Gig Companies Are Taking Their War on Workers Beyond California

Just as it did in its campaign for California’s Prop 22, Big Tech is claiming rideshare drivers in Massachusetts will earn as much as $18 an hour if a new pro–gig company law is passed. But new analysis finds a majority will actually make less than $5 an hour.

A new report finds that a majority of Massachusetts rideshare drivers would likely earn as little as $4.82 an hour under a proposed law backed by Uber and Lyft. (Dan Gold / Unsplash)

In news that should surprise no one, Uber and Lyft are seeking to build on their recent offensive in California — which saw Proposition 22 override a series of legislative and judicial obstacles to enshrine a new labor model, pushed by large companies associated with the so-called “gig economy.” For tech companies themselves, Prop 22 was a massive coup: opening the door to an exploitative tier of work that is neither employment nor independent contracting. In effect, firms like Uber and Lyft are now freed from even basic employer responsibilities like having to pay the minimum wage, offer overtime, or provide compensation in the event of injury. Workers, meanwhile, are now expected to shoulder even more of the risk.

As has become the dystopian trademark of all Silicon Valley “innovation” schemes, the plan’s public-facing rhetoric sold it as progressive and even pro-worker — so much so that many Californians thought they were helping to pass a measure in support of rideshare employees and quickly regretted their “Yes” votes. In execution, it’s become all too clear how brazenly deceptive tech companies were in pushing their model. One study, for example, estimates that, thanks to various loopholes and carve-outs, some gig drivers will be paid as little as $5.64 an hour on net — roughly equivalent to the minimum wage during the Harry Truman presidency and far short of the guaranteed 120 percent of the minimum wage promised by Prop 22’s proponents.

As Jacobin’s Alex Press wrote this summer, gig companies have unsurprisingly delivered on their promise (or rather, threat) to pursue the Prop 22 model nationwide, with Massachusetts being the latest front in their war on workers. With a bill before the state legislature and an initiative which could make it onto the ballot next November, a similar alliance of corporate giants is looking to replicate their success on the West Coast — and is even making the same absurd promises that their model will yield big benefits for workers. In this case, the imagined figure is a guaranteed pay of $18 an hour should the proposition take effect ($18 being roughly 120 percent of the state’s current minimum wage).

A new report from the Labor Center at the University of California, Berkeley, however, finds that (surprise, surprise) the majority of Massachusetts drivers are liable to earn as little as $4.82 an hour, while a smaller number who qualify for a health care stipend under the law could earn the princely wage of up to $6.74 hour. The disjuncture between these numbers and what tech companies claim comes down to several quite obvious loopholes in the proposition identified by authors Ken Jacobs and Michael Reich in their analysis.

From “Massachusetts Uber/Lyft Ballot Proposition
Would Create Subminimum Wage,” by Ken Jacobs and Michael Reich.

First, the companies’ $18 an hour wage guarantee applies only to time logged while drivers are “engaged” with passengers, which is just another way of saying they’ll only be considered “working” when directly en route to a job or in the act of ferrying customers. An estimated 33 percent of the total time a typical driver spends at work is spent waiting for ride requests or returning from a previous trip, and under the proposal, such time will not be compensated at all. Thanks to their rather creative definition of “engaged,” companies will also be offloading some insurance costs onto workers themselves. A similar logic would unsurprisingly apply to both payroll taxes and employee benefits. As Reich and Jacobs explain:

Since the drivers would be classified as independent contractors under the proposition, they would not receive unemployment insurance, workers’ compensation, and other mandatory benefits provided to employees under Massachusetts and federal laws. Instead, they would be required to pay both the employer and employee shares of payroll taxes and they would receive Occupational Accident Insurance from the companies, which is inferior to workers’ compensation benefits for comparable workers.

Thanks to a needlessly complicated and deliberately high eligibility threshold (drivers would need to log a certain number of “engaged” hours to qualify at all), a majority won’t receive health care benefits either — yet another sign that tech companies’ would-be “flexible” labor model is really about extracting the maximum amount of labor while owing as little to their employees as possible.

In California, Silicon Valley successfully mounted an expensive agitprop campaign to make sure Prop 22 got passed. In Massachusetts and elsewhere throughout the country, labor advocates can and should expect the same ruthlessness (though, with any luck, the model’s destructive effects in California will strengthen their own case). Should the latest ballot initiative succeed next year, many drivers who are already performing precarious and underpaid work can be expected to earn even less — whatever big tech’s well-oiled PR machine claims to the contrary.