Growing voices say gig workers need protections, benefits

Above: Lyft driver Christopher Carbins (left) receives the company’s new logo mustache for his car. Below: Rosa Sanchez of HomeJoy cleans a rug. More people are calling for things like minimum wage and collective bargaining for such workers. less Above: Lyft driver Christopher Carbins (left) receives the company’s new logo mustache for his car. Below: Rosa Sanchez of HomeJoy cleans a rug. More people are calling for things like minimum wage and ... more Photo: Amy Osborne / The Chronicle Photo: Amy Osborne / The Chronicle Image 1 of / 5 Caption Close Growing voices say gig workers need protections, benefits 1 / 5 Back to Gallery

Does the gig economy exploit workers?

Uber and Lyft drivers, HomeJoy cleaners, TaskRabbit handypeople, Amazon’s Mechanical Turk odd-jobbers, and others who provide on-demand services through new online marketplaces work as independent contractors, without the protections afforded to employees. They lack benefits such as minimum wage, overtime pay, workers’ compensation, Social Security contributions and the right to collective bargaining.

The new companies, backed by huge amounts of venture capital, say that they are allowing “microentrepreneurs” to flourish, creating new ways for people to make money. Their business models depend on contractors, allowing them to quickly expand and contract — as well as sidestep some expenses.

Now a national spotlight is illuminating the status of these workers.

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Lawsuits by Uber and Lyft drivers and Handy.com cleaners seek reclassification as employees. Former Secretary of Labor Robert Reich, a professor of public policy at UC Berkeley, fueled the debate this month with an essay saying the “share economy” is a euphemism for the “share-the-scraps” economy because it shifts risk onto workers, circumvents labor laws and limits workplace protections.

The fundamental question is whether it’s right to let workers shoulder all the uncertainties and risks while highly profitable corporations reap all the financial rewards, he said. “In effect, on-demand work is a reversion to the piece work of the 19th century — when workers had no power and no legal rights, took all the risks, and worked all hours for almost nothing,” he wrote.

The National Employment Law Project chimed in with an opinion piece calling for new policies to shore up the social safety net for freelancers.

On-demand workers are the latest and most visible representatives of the nation’s rapidly growing contingent workforce. Any changes in labor law could affect a much broader segment of freelancers, who now account for about a third of the nation’s workforce and could grow to 40 percent by 2020.

So far, regulatory battles over disruptive technologies have focused on their social impact. For ride services, that meant public safety issues such as insurance, driver background checks and vehicle inspections. But some advocates hope lawmakers’ attention will shift to protecting workers.

'Better balance’

“What do we do to better balance the future?” Reich said in an interview. “We’ve got to do everything possible under the law to make sure they have the best deal they possibly can.”

He sees positives in the on-demand sector, especially for younger people who can work part time while they’re in school. But in talking to older drivers for Lyft and Uber, he found they feel “a continuous state of uncertainty about how much they will bring in and whether they can meet the bills. They join the two-thirds of Americans living from paycheck to paycheck.”

“The rules defining regular employees need to be modernized,” Reich said. For example, if someone pays 20 percent or more of their income from clients to a company that arranged those gigs, “that’s a strong indication that that company is actually an employer.” Under that metric, Uber and most of the other on-demand markets, which take commissions of around 20 percent, would be considered employers.

Rebecca Smith, deputy director of the National Employment Law Project, said the marketplaces could be mandated to provide some benefits even without being employers. Some states require temp agencies and labor brokers in agriculture and garment industries to provide minimum wage, overtime and other benefits, she said.

“You could deliver the equivalent of a workers’ bill of rights,” she said. “It’s not an application of current law so (it) would take a legislative process.” She thinks such things will soon occur at the local and state level, the laboratories for new policy ideas.

Both Smith and Reich say group bargaining could be key for these workers.

While the National Labor Relations Act says that only employees can form unions to engage in formal collective bargaining, the power of the group remains the most potent voice, they said.

“They clearly should have the right to organize,” Reich said. “They should be able to pool bargaining power to get better terms of employment.”

Joining guilds

Contract workers already join guilds such as the Freelancers Union and Peers.org to pool buying power for products such as health insurance.

Uber drivers, of which the company says there are some 160,000 nationwide, have banded together in local and national groups that have started to make demands — so far unsuccessful — over issues such as commissions and tipping. Although they work in isolation, social media provides a potent organizing tool. Drivers from San Francisco to Maryland have held protests and strikes, started petitions, and looked into joining the lawsuits seeking class-action status.

Uber declined to comment for this story.

At San Francisco’s TaskRabbit, where many workers complained when the company retooled the way jobs are allocated last year, CEO Leah Busque defended the contract-work model.

“Taskers are freelancers and have complete control over their schedule, hourly rates, where they work, and how they choose to perform their work,” she said in an e-mail. “TaskRabbit is a true marketplace.”

Freelance flexibility

A company survey showed that many workers prefer the flexibility of freelancing and don’t want a typical 9-to-5 job, she said. TaskRabbit has begun offering such perks as access to individual insurance plans through Stride Health, discounted transportation through Zipcar and discounted telecom plans, she said.

Some Uber drivers acknowledge that being traditional employees may not be the answer.

“Flexibility is key, the freedom to create my own schedule,” said Karen, who drives in San Francisco for Uber, Lyft and Sidecar, and will soon add Shuddle, a service for chauffeuring children. She asked to withhold her last name because she fears her auto insurance carrier would drop her for using her car for commercial purposes. “It’s almost imperative that you are multiservice, being able to run several apps simultaneously to get the most ride requests.”

That means she would not want to be aligned with a single company. “I’d love to have all the protections, like workers’ comp, covered, but it wouldn’t have to come from just Uber,” she said. “It would be better if it were some kind of package for drivers.”

While Karen drives 40 hours a week, some other drivers work as little as 10 hours a week, for instance just turning on the app while they commute to a traditional job, she said.

Some say there are ways to ensure fairness that don’t require regulation.

Berin Szoka, president of TechFreedom.org, a free-market think tank in Washington, termed Reich’s views “just one step removed from Marxism” and said there is a simpler approach: Have the companies disclose relevant information.

“We’re moving away from the old paradigm of top-down regulations,” he said. “We need these markets to evolve (from the) bottom up. Transparency, requiring reporting of data in a way that is structured and rich, will allow people to make informed decisions.”

For instance, he said, the Federal Trade Commission could require Uber and other services to publish data on driver accidents. He pointed to an Uber-commissioned study that say its drivers average about $6 more per hour than taxi drivers, while acknowledging that the study didn’t account for expenses such as gas and car maintenance.

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid