Gigged Page 7

“Down here,” he reiterated, “there ain’t no jumping on the bus.”

  Gary didn’t get any jobs through Upwork. But Terrence had found him placement at a huge customer service company called Arise. Nine of Terrence’s students qualified for similar jobs, but only three, Gary included, had internet access fast enough to meet the companies’ specifications.

  Gary wouldn’t be directly employed by Arise. He wouldn’t even be directly contracted to work. Arise hires subcontractors it calls “independent business operators” (IBOs), who in turn hire the people who actually answer phones. Terrence had found an IBO that was looking for new independent contractors.

  On the website of Gary’s new employer, under a slideshow of white women in headsets with too much makeup and photoshopped white teeth, an application page explained why this employer was superior to others like it: “We offer above minimum wage with pay increases,” one bullet point said, “when others offer [pay] by the minute.” Offering more than the minimum wage, it seemed, had become something to brag about. After all, the law does not require companies to ensure that independent contractors make more than a minimum wage.

  Imagine a nesting doll with Gary at the center: Gary was the smallest doll, an independent contractor working for the IBO (the company with the bullet points and smiley slideshow). Go one layer bigger, and you’d see the IBO (the small business that hired Gary). Another layer bigger, and you’d see Arise, the big customer service company that had made a contract with the IBO. Only after another layer would you find Sears, the company that the customer thought he was dealing with all along.

  Arise, no surprise, presented this setup as innovation: Under the heading “Leveraging the power of crowdsourcing,” the company’s “about” page at the time explained to potential customers that Arise takes advantage of “innovative breakthroughs in technology and our own award winning, proprietary and patented technologies” and “provide[s] entrepreneurial opportunities to many underserved populations, where small business owners have the ability to create flexible schedules based on their lifestyle needs.” Silicon Valley hadn’t been exactly original in the way it had pitched its services as world-changing innovation. Companies like Arise were the predecessors to the gig economy.

  Thanks to Terrence’s negotiations, Gary did not have to pay for his training, which some in his position did. But he also did not get paid for the three-week, four-hour-per-day program. And during that time, he had trouble paying his bills. “I had disconnection notices everywhere,” he said. In July, he’d received an official offer for (not quite) employment that seemed to contradict itself: “This is At-Will Employment and you are being paid as a contractor. You will be responsible for any and all applicable taxes due to State and Federal agencies.” Appended, a hiccup of seemingly self-contradicting good cheer: “Welcome to the company.” His pay would start at $9 per hour, $1.50 above Arkansas minimum wage at the time.

  Gary, a father of eight (one of whom lives with him) and a grandfather of eleven (with the twelth on the way, the last time I talked with him), was good at customer service. Workers like him were measured on three standard industry metrics: schedule adherence (whether they worked the amount of time they had agreed to work), average hold time, and call quality. He told me he usually scored in the top 5% on all three.3

  “My voice is pretty straightforward, pretty calm,” he said. One time, he took a call from someone who was so angry that he threatened to place a claim for every outlet, every light, and every ceiling fan in his house, and for ten toilets.

  Gary let him vent. Finally, the man admitted, “You know I don’t have ten toilets.”

  “I’m pulling up the claims, but I’m not putting them in,” Gary told him. “I was waiting for you to calm down.”

  Once he completed his training and started to work, Gary’s life appeared to be on the upswing. With his new paycheck and his new flexibility, he was planning a trip to Hawaii to celebrate his fifteenth anniversary with his wife. “We never went on a honeymoon,” he said, smiling already at the thought of his beach vacation. He was trying hard at his non-job, and it was working for him—at least for the time being.

  Gary, like Kristy and others who turned to the gig economy out of necessity, may have chosen it based on limited alternatives. But like Curtis, who had been drawn to the gig economy lifestyle, or Abe, who had been drawn to the opportunity to be an entrepreneur, he started out full of hope.

  PART III

  FINE PRINT

  CHAPTER 7

  A COMPETING STORY

  As the gig economy aged, it became clear that independence, flexibility, and freedom were not its only characteristics—that the experience wasn’t wonderful for everyone.

  One of the most startling reports was Washington Post reporter Lydia Depillis’s September 2014 profile of an independent cleaner named Anthony Walker. In it, Walker dropped his four-year-old daughter off at daycare and dragged a roller bag full of cleaning supplies onto a Washington, DC, city bus, which he rode for more than two hours before reaching the home he’d been assigned to clean. The job, assigned to him by the gig economy company Homejoy, paid $51, which meant that, including five hours of commute time, Walker made around $10 per hour—before any taxes had been withheld and without any workers’ compensation, unemployment, time off, or retirement benefits. This was better than nothing, perhaps, but it didn’t look much like the story that Silicon Valley had been telling about the gig economy.1

  Throughout 2014 and 2015, stories like these made it hard to accept the idealistic idea that the gig economy would provide quality on-demand work in an economy in which good jobs were becoming harder to find. There were reports of drivers who had been deactivated from Uber without explanation. Cleaners for Homejoy who didn’t earn enough to pay rent. And couriers who worked for gig economy delivery companies like Postmates and Deliveroo who didn’t clear the minimum wage.

  “I think Deliveroo wants to manufacture this image that we are all young, middle-class men who wear trendy clothes, making a little extra cash,” one courier told The Guardian. “But a lot of the couriers are migrants, or working-class people from the local area, and the majority are doing it full-time because they need the money.” (Deliveroo told the paper that 85% of its fleet used the gig as supplemental income.)2

  Workers in the gig economy were disproportionately poor. Compared with the American population, about twice as many gig economy workers earned less than $30,000 per year,3 below what MIT calculates to be the US living wage for a family of four. In New York City, where the living wage for a family of four is $46,000 in a year, a group that said it represents 50,000 ride-hail drivers told the New York Times that more than one-fifth of its members earned less than $30,000 in a year, before expenses.4 When gig economy leaders had conveyed their visions early on, they had failed to distinguish between the experiences of people with relatively scarce skills—freelance graphic designers, journalists, movie production crews, programmers—and those with less scarce skills, like house cleaners and drivers and Mechanical Turk workers.

  As a group, independent contractors earn more than employees who do similar work. Many of them are highly skilled freelancers like Curtis, the New York City–based programmer, and make six-figure salaries or more.5 But low-wage workers have historically been hurt rather than helped by the trend away from employees. One study found that contracted cleaners and security guards earned 15% less and 17% less, respectively, than their in-house peers.6 Another study found that the “outsourcing wage penalty” ranges between 4% and 7% for janitors and between 8% and 24% for guards. Both groups were less likely to receive benefits than their counterparts with direct-employment ties to their work.7

  A report published by the US Government and Accountability office in 2015 found that contingent workers across the board—a category that includes temp workers and subcontracted workers in addition to freelancers—earned about 10.6% less per hour than “standard workers,” and were about two-thirds less likely to have
a work-provided retirement savings plan. “These contingent workers are also more likely than standard workers to experience job instability, and to be less satisfied with their benefits and employment arrangements than standard full-time workers,” wrote the report’s authors. “Because contingent work can be unstable, or may afford fewer worker protections depending on a worker’s particular employment arrangement, it tends to lead to lower earnings, fewer benefits, and a greater reliance on public assistance than standard work.”8

  The economist David Weil argues in his book The Fissured Workplace that there are several reasons workers’ pay and benefits are stronger when workers are permanent employees at a larger company than when they work as independent contractors, for a contractor, or for a temp agency. He writes:

  Large firms employing a wide spectrum of workers—from highly trained engineers and professional managers, to semiskilled production workers, to janitors and groundskeepers—characterized the workplace of the mid-twentieth century. An important consequence of having people with diverse skills and occupations working under one roof was that companies shared the gains received from their market position with the workforce. They did so through how wages were set—in both union and nonunion workplaces. While some businesses shared gains out of corporate beneficence, many did so because of what might be called enlightened self-interest. Because feelings about fairness affect employee morale, fairness considerations have an impact on human resource policies, including wage determination. In particular, perceptions about what one is paid depend in part on what others are paid. If a large company employed executives, secretaries, engineers, mechanics, and janitors, it therefore needed to be cognizant of how the structure of wages was perceived among all those working underneath the common corporate umbrella. As a result, janitors’ wages were pulled up because of the wages lead employers paid their factory workers.9

  When companies instead look to contract a janitor, Weil writes, it is no longer a question of “What is fair?” but rather a question of “Which company is offering the best price?” Meanwhile, offering an independent contractor access to the company healthcare plan becomes a legal liability (because it may be used as evidence that the worker is misclassified) rather than a legal imperative.10

  You can see a stark divide between employees and non-employees on the campuses of rich technology companies like Facebook, where the highly paid knowledge employees have access to free perks, but the contracted cleaners, bus drivers, and security guards do not. “They have free laundry, haircuts, free food at any time, free gym, all the regular things that you have to pay for, but they have it for free,” Maria Gonzalez, a janitor at the company, told The Guardian in 2017. “It’s not the same for janitors. We just leave with the check.”11

  Facebook at least pays its contractors well, having set a $15 minimum wage. But other companies flat-out abuse their non-employee workers.

  Temporary workers have a higher rate of injury than traditional employees, reporting incidents between 36% and 72% more often than non-temporary workers.12 One of the more drastic examples of abuse against other forms of contingent workers demonstrates how large companies can escape responsibility for the safety and fair treatment of workers they don’t directly employ: A USA Today investigation in 2017 revealed that port truck drivers in Los Angeles often owed money to their employers at the end of the week despite working 20 hours per day. Companies took workers’ pay and put it toward the ownership of their trucks, but took their trucks without returning any pay if the workers failed to please (which in one case merely involved missing a day of work).13

  Los Angeles port truck drivers are part of a delivery system that moves products to big retail chains. In every case, the response to these allegations by companies that depended on these workers (but hadn’t technically employed them) was the same. When the USA Today reporter asked a Target spokesperson about labor violations by trucking companies in Target’s supply chain, the Target employee wrote that “Target doesn’t have anything to share here.” A JCPenney spokesperson told him the company “relies on its third-party transportation vendors to comply with all applicable laws and regulations.” A spokesman for LG Electronics said that “We’re not trying to wash our hands of this issue, but it’s frankly far afield” and “really very disconnected from LG Electronics.”

  Similarly, when the National Employment Law Project (NELP) sued grocery stores in Manhattan on behalf of workers, one of whom had worked 10- to 12-hour days, seven days each week, for a weekly salary of around $90, NELP reported to a US Senate Committee, “The stores said the workers were not their employees, and the labor brokers said the deliverymen were independent contractors.”14

  * * *

  Gig economy champions are fond of touting data that shows that workers like flexibility. But this data doesn’t take into consideration how much workers value this flexibility when weighed against factors like pay, job security, benefits, and safety. The National Bureau of Economic Research devised a study to try to understand how workers actually value flexibility, as opposed to whether they think it’s a good idea. Princeton economist Alexandre Mas and Harvard economist Amanda Pallais recruited call center workers and asked more than 3,000 job applicants to choose between a job that offered a standard 9-to-5 schedule and the same job, but with one of five flexible scheduling options. They randomly varied the difference in pay between the two jobs. Sometimes the jobs paid the same. Sometimes the alternative work arrangement paid more, or a lot more, than the traditional job, and sometimes the traditional job paid better.

  Mas and Pallais found that when workers chose between the two types of jobs presented to them—one an alternative work arrangement and one a traditional, office-based 9-to-5 job—workers overwhelmingly placed little actual value on flexible options. When the traditional and flexible scheduling options paid the same, for instance, only a slight majority—60% of applicants—chose the option to schedule their own hours. On average, they were willing to take a $0.48-per-hour pay cut to set their own schedules, but they weren’t willing to give up any pay at all to set their own number of hours. In other words, they placed some value, but not a huge amount, on flexibility.15 “If you ask people, do you prefer flexibility? Of course, everyone would say yes, they prefer flexibility,” Mas told me in an interview. “But when you pose it as, ‘You can choose a job where you get paid less, do you want to take that?’ That’s a different scenario. It’s rubber meets the road at that point, and people, at least [according to] what we found, largely say no.”16

  CHAPTER 8

  DON’T CALL US

  The online application involved a quiz: “What would you do if you found $10 on a table and there was no note indicating what it is for?”

  A.  Take it, since it’s meant to be a tip

  B.  Leave it where it is, since you don’t know if it was meant for you

  C.  Ask the client if the money is a tip

  The right answer was obvious to me: leave the money and do not ask questions.

  “Say you wanted to work 8 hours on Monday. On Monday morning, you realize you only have 2 hours of work scheduled. What would you do?”

  A.  Cancel the job since it’s not worth the commute

  B.  Complete the job since you committed to the job already

  C.  Call the support team and say you can only do it if you are given another job

  “Complete the job” seemed to be the right answer, even if it meant traveling longer than you’d work.

  “What is your opinion on taking personal calls when in a client’s home?”

  A.  I always take personal calls

  B.  I take personal calls only if the client is in a different room

  C.  I never take personal calls

  Not on company time!

  The gig economy company that administered this quiz was hoping to sign up new cleaners in New York City in 2015. I had responded to its Craigslist ad, which read, “We’re looking for hig
h quality independent cleaning professionals” and “Income potential is up to $22/hr when working; set your own schedule and work as much as you’d like. Many of our top active cleaning professionals make $1,000+ per week!”

  After entering my own name, address, and cleaning experience, I was referred to the quiz as part of my application.

  * * *

  Traditional freelancing relationships are fairly clear-cut. Independent workers take on projects that they can complete, well, independently. In the gig economy, companies like Upwork facilitate this type of work: Clients hand over assignments to workers, who complete them without any guidance from Upwork.

  But with the arrival of Uber and “Uber for X” startups, an inherent conflict emerged. On one hand, these companies wanted to develop a reputation for providing great service, so that customers would begin to rely on them. On the other, their lawyers advised them that providing independent contractors with training, uniforms, benefits, or regular work shifts—that is, the things that produce happy, well-trained employees—could put the companies at risk of being sued for misclassifying employees as independent contractors.

  Gig economy companies were in a pickle. They wanted to provide good service, but also to avoid accusations that they were treating their independent contractors like employees. Not training workers or setting expectations at all would lead to inconsistent service. And scheduling them to serve the same customers every week, motivating them with good benefits, and coaching them on how to improve put the companies at risk of lawsuits, which could force them to make an expensive shift to employees.

  In the United States, there’s no single test that determines whether workers are independent contractors or employees—it’s different in different states and under different laws. And similarly in Europe, laws are often so complicated that there’s no clear-cut way to define who is truly independent. Generally speaking, independent contractors should decide how to complete work, have potential for profit or loss, and, because they take on these responsibilities, have some bargaining power in contracts with other businesses. But are your particular workers being treated like employees? It will probably take a lawsuit to say for sure.