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If you spend enough time in San Francisco, you’ll notice sharing economy workers everywhere. While you’re waiting to get some food, look for the most frantic person in the lineup and you can bet they’re working with an app. Some of them are colour-coded: workers in orange T-shirts are with Caviar, a food delivery app; those in green represent Instacart, an app for delivering groceries. The blue jackets riding Razor scooters are with Luxe — if you’re still driving yourself around this city, these app workers will park your car.
In the Bay Area, there are thousands of such people running through the aisles, fidgeting in line and racing against the clock. They spend most of their time in cars, where it can be harder to spot them. Oftentimes they’re double-parked in the bike lane, picking up a burrito from inside an adjacent restaurant or waiting for a passenger to come down from the apartment on top. If you look closely, you’ll see a placard in the window that says Uber or a glowing pink moustache indicating they drive around Lyft’s passengers. Last summer, I was one of them.
Oh, Canada! I’m writing you from Berkeley, California to warn you about this thing called “the sharing economy.” Since no one is really sharing anything, many of us prefer the term “the exploitation economy,” but due to its prevalence many in the Bay Area simply think of it as “the economy.” Whatever you want to call it, the basic idea is that customers can outsource all the work or chores they don’t want to do to somebody else in their area.
You can be chauffeured around the city while somebody picks up and launders your dirty underwear. You can have groceries delivered to your door and your bathroom given that deep clean that you don’t have time to do yourself. The best part is you can do it all on your phone! Sharing economy companies promise their customers all the luxuries of the rich and famous — and they can do that by taking advantage of the system and, in some cases, bending or simply avoiding labour laws.
I know this because I spent a month driving, shopping and in other ways serving the users of apps like Uber, Lyft, Postmates and Instacart. I recorded the whole thing for a podcast called Benjamen Walker’s Theory of Everything. Benjamen wanted to see what it was like to work for an app, but he didn’t want to do the work himself. In the spirit of the sharing economy, he convinced me to “partner” with him. There is so much ridiculous stuff I can’t get to in this short space that you should listen to my full adventures online at www.sharingeconomy.fail or by searching for “Instaserfs.”
I signed up for as many sharing economy jobs as I could, but they’re not really jobs. I was never an employee; I was a “partner,” or a “hero” or even a “ninja” depending on the app. Sharing economy companies are just middlemen, connecting independent contractors to customers. When I signed up to work with (not for) these apps, I was essentially starting my own ride-sharing/courier business.
As a freelance filmmaker, I knew the deal: being your own boss is a big responsibility. In the U.S., we independent contractors have to pay an additional self-employment tax and we have to find our own health insurance. We’re also not guaranteed a minimum wage. As sharing economy workers, we use our own cars, which means paying for our own gas and maintenance costs. We are on our own.
We do still have a boss. It just isn’t a person. It’s an algorithm.
Becoming a five-star driver
It is generally quite easy to become an Uber driver; all you need is a relatively new car and a driver’s license. Unfortunately, my 2012 Scion xB has a few scratches on the passenger side. Uber’s car inspectors told me it wouldn’t have been a problem had the scratches been on the driver’s side, but they would be too visible to customers, so I was rejected! I turned to Lyft — essentially an Uber clone and just as popular in the Bay Area. They didn’t care about the cosmetic damage to my car. After submitting my insurance info, and going for a quick drive around the block with another Lyft driver (to prove the car actually works), I was good to go.
I was excited to get started. I like talking to people, and in the movies being a taxi driver always seemed really interesting. Almost everybody I picked up was great, but it is a problem when the passengers aren’t cool, like the group of racist, self-righteous venture capitalist bros who smoked in my car. If I was really running my own business, I could have let them know I thought they were all assholes, but with Lyft, and a lot of other apps, the customers are rating you. And if your average rating falls below 4.7 out of 5 stars you are removed from the platform — fired.
Whether it’s Uber, Lyft or any other ride-share app, when you’re in the car, the passengers have the control. The rating system is essential to the sharing economy’s ability to function because the companies aren’t legally allowed to train their independent contractors like they would employees. They test the workers in the field and drop those who get low ratings, which passengers can give for any reason. The venture capitalists, for example, told me they didn’t like drivers who had a hard time with English.
Defenders of the sharing economy often tell me they’ve talked to a driver who loves it! Many drivers do, but consider that, as a passenger, you’re going to be rating your interview subject, and that anything under five stars will bring the driver one step closer to getting kicked off the platform. That can have some implications as far as how honest drivers are when their passengers ask about how much they like it. Depressing workers don’t get high ratings. Nobody wants to feel guilty about using an app they like.
Realistically, people aren’t driving around strangers because they love it. They do it because they need to earn a living and it’s been hard in America since 2008. Workers are grateful for what they can get and here it’s the companies who have all the control. The standard ride-sharing or courier app’s business model looks something like this:
- When introducing your app into a new city, take heavy losses by overpaying drivers and undercharging customers.
- Offer drivers cash bonuses to get their friends to sign up.
- Once you’ve got a steady supply of drivers invested in the app, start lowering their pay.
The companies don’t send out an apologetic email letting drivers know a pay cut is on the way. It happens inconspicuously through “upgrades” to the app, which can often change fare and payment rates. Only drivers with enough extra time to carefully analyze their earnings will notice that the new terms don’t work in their favour. After enough pay cuts, some will quit, but many in the workforce buy cars specifically to become a part of the sharing economy and end up stuck, continuing to work for less money or switching to one of the other apps.
Independent contractors are allowed to work for as many companies as they want, but Lyft doesn’t want you driving for Uber and vice versa. In January 2015, Uber announced it would guarantee earnings of between $10 and $26 an hour depending on peak hours. But to qualify you have to accept 90 per cent of all ride requests, accept one ride per hour and be online for 50 minutes of each hour worked. Lyft has a similar deal where you can earn a 10 per cent bonus for driving 30 hours in a week, a 20 per cent bonus for working 40 hours a week, and a 30 per cent bonus for driving 50 hours a week. The idea is to reward loyalty and prevent drivers from having Uber and Lyft open at the same time. The thing is, if you’re working 40 or 50 hours a week with one company, that looks a lot less like a gig and a lot more like full-time employment.
Connecting to the workforce
In Los Angeles, September 2014, a group of Lyft drivers burned their pink mustaches in protest of the pay cuts. These kinds of actions aren’t very common because most of us don’t know our co-workers and there is no physical location to congregate. Lyft doesn’t allow their drivers at the head office. The main place for “sharing economy” workers to connect is through online forums and Facebook groups. All of the apps out there have at least one and my favourite is the Postmates Couriers group.
Postmates is a delivery app. As a customer, you can order anything you want and have it delivered to your house within an hour. Most often, people are ordering food, but every once and a while you’ll get an order for Whip-It canisters or an HDMI cable. It seems like a relatively simple job, but it actually can be quite a challenge, which is why it’s important to have a community of drivers that can learn from each other.
The official Postmates courier group on Facebook is fairly innocuous, made up mostly of people asking for advice on how to make more money and some posting their earnings with pride. The responses are all optimistic and inspirational, making Postmates seem like a pretty decent gig. So I was surprised when I joined the unofficial Postmates group, which restricts membership to couriers, and the very first thing I saw was this pinned message from the moderator:
Be mindful that there are people in this group spying for corporate. Your words in here can lead to your being suspended or banned from the platform. We do our best to keep any corporate employees out but that is a near-impossible task. We don’t want to see anyone get banned from the platform over a Facebook post so please give your words thought before hitting post.
Yes, people have been kicked off Postmates for complaining. I’ve talked to them. And yes, the official Postmates courier group on Facebook is censored to erase anything that could be perceived as a complaint. But more importantly, it’s clear that Postmates is not preparing its workers for the realities of life as an independent contractor. Many are shocked about how much they have to pay in taxes and how little they’re making doing the work. There are plenty of screenshots showing that some are making less than minimum wage.
One way to ensure you won’t make a lot of money over a shift is to accept orders for Postmates’ “promotional offers.” One time, I entered a self-serve frozen yogurt shop (for the third time that day) and saw two people frantically looking from their phones to the display of toppings. I started making the frozen yogurt combination listed on my phone when I heard, “you guys don’t have any raspberries?!” He was also a Postmate. When the answer came back (they had run out of raspberries), the three of us realized that we were all in the same boat and took a moment to commiserate.
“Yeah, hold on, I’m gonna call my customer.”
Both of their customers asked for a substitute topping. Mine wanted to cancel the order. But I had already started filling a cup with froyo! The cashier was looking at me. What was I supposed to do? I threw on some M&Ms and bought it for myself. I had to run — if you want to make more than minimum wage working for Postmates you have to “stack” orders, which means accepting a new job before you finish the one you’re working on. There was only 45 minutes left before a guy across town needed a burrito in his hand.
I ended up having to take on all kinds of little expenses like these. It’s part of the risk of starting your own business. That time, I just had to buy a $3 froyo but it can be a lot worse (parking tickets in San Francisco can be over $80). Oftentimes you have to choose between parking illegally or being late with an order.
One Postmates employee suggested I park in driveways because I would be less likely to get a ticket than if I double-parked. When I stopped by the Postmates office to ask if they reimburse tickets (they don’t), they gave me a parking placard that would inform meter monitors I was a Postmate who would be right back to move my car. All the risk falls onto the worker and the company is free of liability — despite the placard being an explicit suggestion that it’s okay to break the law if that’s what you’ve got to do to get the order done on time.
When you start a shift driving for Uber, the first thing you do is look for hotspots. Drivers and customers have different interfaces on their phones. For drivers, a red area on the map supposedly identifies where the most people are (or will be) requesting rides, so you drive to that area hoping to find a passenger. But since all the available Uber drivers are moving to the same places, the red zones can change before you get to them.
Why doesn’t Uber just tell its drivers exactly where rides are needed? Giving direct orders would transform their independent contractors into employees with rights and benefits. The result is a system that is much less efficient (for the drivers) than it should be simply because the ride-share app companies want to avoid the responsibilities of being full-blown employers.
Postmates once allowed their drivers to see the details of an order before accepting a job. This was great for couriers because we could estimate how much money we would make on an order. It also meant we could reject bad jobs, which created a situation where it could take a long time — or even be impossible — to find a courier who would accept a low-paying job. Postmates responded by “updating” the app to a “blind system” in which we could still accept or reject jobs, but without enough information to determine whether it would be worth our time or not (e.g., a huge grocery store order). To make sure we accept jobs quickly without analyzing them, the app plays an extremely loud and annoying beeping noise designed specifically to harass couriers into submitting to the algorithm.
One of the best companies I worked for is called Washio. I picked up dirty laundry and delivered clean laundry. It was the best paying and least stressful of all the apps I worked with that month because there was no illusion of choice. Washio tells you exactly what to do and you do it. It is simple and honest. But it also betrays the spirit of the independent contractor, and that’s important for a number of reasons.
In the United States, as I suspect in Canada, all the worker protections in our legal code are specifically designed to help employees. For example, employers are required to pay a minimum wage, to provide medical insurance, and to supply certain benefits such as sick days. By pretending that their employees are actually self-starting entrepreneurs, sharing economy companies can avoid these obligations and save an enormous amount of money in the process — savings that are both passed on to the customer and pocketed in profits. It sounds great until you ask about things like insurance.
True story: an Uber driver hits a six-year-old girl in the crosswalk and kills her. Uber doesn’t take responsibility because the driver wasn’t carrying a passenger at the time and so technically wasn’t working for Uber. His insurance company, on the other hand, doesn’t cover the accident because by working for Uber without a commercial driving insurance policy he was violating the terms of the policy he did have. Uber settled for an undisclosed amount after a year and a half of litigation.
Your auto insurance company can terminate your policy if they discover you are driving passengers or cargo for profit. I know this because I called mine to say I was “thinking about” signing up for Uber. They told me not to, since I’d be driving without coverage. Hopefully, they’ll never hear the podcast!
Regulators! Mount up.
Some simple Google searches led me to a number of articles about Canada’s response to the sharing economy. I can see you’re struggling with Uber in particular, from Vancouver to Halifax, and the word that keeps popping up is “regulation.”
I understand that it’s hard not to give in to the lower prices and the convenience of getting whatever you want on demand with an app. It’s kind of awesome, actually! But I would argue that the exploitation economy is just as unhealthy and dehumanizing for the customers as it is for the workers.
Postmates couriers are told that it is strictly against the rules to shake a customer’s hand. Like all rules, this didn’t come from nowhere. The truth is that using sharing economy services can breed contempt for the workers. One creepy Uber driver can nurture disdain for all the lowly drivers. You never even have to see the person who is cleaning your house or your clothes. Plenty of people requested that I drop off their food at the door. Customers grow to love apps that make the worker anonymous. That way, you don’t have to feel guilty about having servants.
The most common defence of the sharing economy I hear is, “if it’s so bad, why are so many people doing it?” Many do it out of desperation. I’ve talked to a number of drivers who will work over 30 hours every weekend in addition to a full-time job just to have enough money to pay rent and take care of their kids. It can also seem like you’re making a lot more money than you really are if you’re not diligently adding up your expenses, many of which are invisible. For example, taxes aren’t taken out of your paycheck, so when April comes around it can be a shock to discover how much you owe.
On the other hand, the sharing economy can be a great thing for some of the workers. If you listen to the third episode of the “Instaserfs” series you will meet Brooklyn, an amazing TaskRabbit worker I hired to help me finish the show. She quit a six-figure salary to pursue her passion (a fashion blog at www.boisclub.com) She can do that and still pay the rent because of the flexibility she enjoys as an independent contractor. But she is legitimately an entrepreneur, not the average sharing economy worker..
There is a place in this world for the sharing economy, and it could be a beautiful thing, but where I live these companies run the show. There are no rules. The apps are breaking the spirit of the law by abusing the independent contractor loophole and actively encourage (e.g., through dubious car placards) actually breaking the law. But it will only ever be the workers, not the companies, who are punished. If you’re going to let the sharing economy into your country, dear Canada, please take control of the situation. Don’t just let the invisible hand lead you wherever it wants you to go.
Andrew Callaway is an independent San Francisco-based filmmaker. Mostly he directs, but he’s also a cinematographer and editor, always thinking about the underlying story. He recently started podcasting, producing a multi-part show called Instaserfs, about life as a “sharing economy” worker, on which this article is based.
This article was published in the January/February 2016 issue of The Monitor. Click here for more or to download the whole issue.
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