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Gig-Working Through the Apocalypse

The app-based economy was already a race to the bottom. The pandemic raises the question of how much lower things can go.

Pascal Guyot/AFP/Getty Images

Last May, Postmates notified Darren Lyn in an email that it had “updated” its payment structure. From that point on, he found, a given delivery job no longer came with a $4 minimum guarantee. Soon after, Lyn, a nursing student who generally works 35 to 40 hours every week driving food and goods around Miami for multiple gig platforms, received a message from Uber Eats informing him it would also be adjusting his pay rate.

Since first getting into gig work in 2016, Lyn told The New Republic, he has “watched pay decline drastically,” adding that things have gotten even tighter during the coronavirus crisis. Working normal hours over a week in mid-March, screenshots show that, with tips, he made around $220—clocking him, even before factoring in driving expenses, well below Florida’s minimum wage of $8.56 per hour. 

The law permits this because gig companies classify Lyn as an “independent contractor,” and in the United States, labor protections generally only extend to those classified as an “employee.” The term’s slippery definition, which was historically written to exclude workers of color in sectors like farm work and domestic work, varies between statutes and in common law. But at least in theory, employees have legal protections around wages and overtime, collective action, and benefits like workers’ compensation and unemployment insurance. These protections reflect a sentiment, codified in the 1914 Clayton Act, that “the labor of a human being is not a commodity”—that workers are not essentially interchangeable and that the workforce is different in kind from generic economic staples like oil or wheat or copper. But today, with gig companies at the vanguard, major businesses are challenging this premise with the backing of conservative politicians across the country. And the pandemic sweeping the nation has only brought their worldview into starker relief: More than a century after the U.S. labor regime began to take form, the idea that concern for the well-being of workers transcends the amoral logic of the market feels more like a quaint aspiration than a description of the world as it is. 

This commodification of labor reflects a “seismic shift” in the structure of the American economy in recent decades, as more businesses have found ways to operate outside the bounds of U.S. employment law. As former Obama labor official David Weil documented in his 2014 book, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It, businesses have increasingly placed their workers at arm’s length, spinning the purchase of human labor—once a messy, worldly matter with attendant responsibilities—into something like a market transaction with a contractor (or an “entrepreneur,” as Postmates might put it). Businesses, under pressure from investors and enabled by technologies that allow them to monitor work from afar, are essentially trying to “have it both ways,” according to Weil: controlling work done on their behalf while evading the obligations that come with being an employer. Where, perhaps, a tech business once employed its own janitors, now it contracts the work to an outside vendor. Where a delivery company once hired its own drivers, it dispatches legions of individual “entrepreneurs” to do the work instead.  

In the fragmented world of gig-economy work, effective regulation and workplace organizing form the two major avenues by which individual workers can protect themselves from the whims of management—or the algorithm. But the business models of companies like Uber and Postmates are organized, with uncommon brazenness, around the steady erosion of these bulwarks. Workers, organizers, and worker-allied policymakers are drumming up strategies to push back, but—stopgap measures to support struggling gig workers notwithstanding—the coronavirus crisis threatens to accelerate a race to the bottom. And as far as Lyn can tell, these companies “seem intent on testing the market floor.” 


Research is mixed as to how much of the U.S. workforce has moved into the app-based gig economy. Millions participate in some capacity, but for many the work is a side-hustle on top of their primary job, rather than their main income stream (itself a revealing trend). And at the policy level, efforts to bolster worker protections in the gig economy have gained momentum in recent years, but there’s also been fierce pushback from businesses eager to avoid the costs and liabilities that hiring human labor traditionally entails.

Meanwhile, gig workers struggle to muster leverage of their own. On March 30, Instacart workers went on strike with demands for things like protective gear and hazard pay while working amid the coronavirus outbreak. Instacart made minor preemptive concessions. But the Associated Press observed that, even as some workers intended to join the strike for at least a day, “other, newer workers are content to have a paying job at a time of mass layoffs in other industries.” This dynamic, driven by high turnover and the precarious finances of those moving in and out of the industry, would be familiar to Lyn. He got more active in conversations with other gig workers after the Postmates pay change, when a link on Reddit directed him to the labor group Working Washington. The Seattle-based outfit was helping organize workers to act in concert by only taking certain kinds of jobs at certain times, manipulating the app’s pricing system as a way of registering their displeasure with the company. An organizer estimated that more than 1,000 Postmates workers nationwide joined in the campaign. 

But Lyn said the new pay rates remained. “Every once in a while,” organizers “try to do something where they tell drivers to go off-line in an area,” said Ben Goehring, a Postmates worker in Arizona. “There’s always someone it doesn’t reach, and there’s always somebody who needs to make a couple dollars to stay afloat. It’s hard to be united when the system is designed to keep everybody disconnected.” 

While honing this system, gig companies have launched formidable campaigns to convince the public that they have innovated the bold new future of work. For the most powerful of these businesses, the “strategy all along has been to ignore the law while amassing the money and political power to change it,” Ken Jacobs, chair of the University of California, Berkeley, Labor Center, told The New Republic. Uber, for example, frequently flouts local laws and has generally gotten away with it (or been penalized in ways that don’t pose a serious challenge to its fundamental structure). Gig companies have also made effective use of mandatory arbitration agreements to make it difficult for workers who challenge their classification status to take their grievances to court. And at the state and federal level in the United States, app-based gig companies, with the help of other industries anxious to roll back regulations, have advanced policies to effectively or explicitly deny their workers the protections of basic employment law. 

Misclassification allegations run rampant throughout the U.S. economy, but “gig companies have done us a favor by making this issue front and center” by “so directly and so clearly thumbing their nose at any responsibility toward their workers,” said Rebecca Smith, the director of work structures at the National Employment Law Project. While the argument that labor reforms would pose an existential threat to a business are nothing new (and while it’s not uncommon for these platforms to compensate executives on the order of tens of millions of dollars annually), it is true that the model is distinctly fragile. Uber, for example, is not profitable. In fact, it lost $8.5 billion in 2019. Thus far, the company and its ilk, buoyed by a seemingly endless stream of venture capital support, have worked to drive out market competition by subsidizing relatively cheap services and taking constant losses. “Workers are squeezed in the middle of that,” said University of Washington historian Margaret O’Mara. Many of these businesses are “reluctant to spend any more on their workforce because their bottom line is precarious as it is.”

But the anti-regulatory zeal runs deeper than a desire for profits. Many of these platforms’ leaders see themselves not as service industry titans, but as visionary technologists, their worldviews of a piece with a prevailing Silicon Valley ethos characterized by a libertarian skepticism toward government. When Uber’s “co-founders were standing on the street corner in San Francisco unable to get a cab and said ‘Man, we gotta fix this problem—let’s be ballers and get black cars to pick us up on demand,’” said O’Mara, “they were not thinking about … worker classification and the Department of Labor.” In the grand vision, workers were to be little more than an input. During his time as Uber’s CEO, Travis Kalanick, as the journalist Mike Isaac reported, referred to the company’s fleet of drivers as “supply.”


If myopia about its workers’ lives is, as O’Mara puts it, a “reflection of Silicon Valley not thinking about the world beyond itself,” the world has still been thinking hard about Silicon Valley. Experts I spoke with cite the 2018 New York City decision to establish a minimum wage in the rideshare industry as a tipping point when the gig-app model began to face serious resistance. Sexual harassment scandals, reports on unfair work practices, and collateral damage to the environment and competing industries have made workers and the public more skeptical of gig-company rhetoric—emboldening politicians to resist aggressive lobbying.  

Many public officials have focused their attention on worker classification. The most prominent example of this right now is California’s Assembly Bill 5, which aims to make companies classify more of their workers as employees, who would then be brought under the auspices of employment regulation. The law went into effect January 1 this year, and other states are looking to follow suit. But while Uber, for example, has loosened some aspects of control over workers to bolster its extremely steep climb of an argument that it falls outside even the newly codified classification standards, the company and others like Postmates have pushed back on AB5 hard, bankrolling a potential referendum for the 2020 ballot that would exempt them from the law. 

Monitoring developments from Miami, Lyn respects California’s willingness to proceed with such a significant piece of legislation, but remains wary: Gig companies have effectively advanced the argument that classification reform will undermine worker flexibility—the essential promise of gig work. This has made classification reform controversial among workers, and unity in numbers is where “we get our power,” he said.  

Which is how he came to support the arguably more straightforward and nimble, if less comprehensive, approach rolled out in Seattle last month, just before the coronavirus crisis upended the livelihoods of service workers around the country. As part of the “#PayUp” campaign, Working Washington, the labor outfit that helped organize the June action against Postmates, aims, in specific gig-economy sectors, to uncouple basic benefits from the bureaucratic and rhetorical mire that can accompany classification disputes. It proposes a law that would establish a minimum base pay plus expenses, as well as mandate increased transparency for workers on many gig platforms like Postmates. (The city is exploring a similar policy for rideshare companies like Uber.) The approach resembles New York City’s rideshare regulation and the Domestic Workers Bill of Rights, two major examples of U.S. jurisdictions enshrining certain protections for workers regardless of their “employee” status. 

Neither proposal is perfect—Lyft and Uber responded to New York’s rideshare regulations by restricting how many drivers can log in at once, a bane for many drivers. They’re also not mutually exclusive: Working Washington spokesperson Sage Wilson said he would welcome classification reform at the state level. But “from a worker’s point of view, the immediate issue is not what legal category they ought to be in.” The question for workers, he added, is “what are they getting paid, and what rights do they have at work?” (Postmates told The New Republic in an email that its Seattle workers make an “on-delivery average” of $24.50 per hour, a figure that Wilson, citing local pay rates and Postmates job postings, disputes.) 

Media can also play a role in ensuring better working conditions. As Weil points out, businesses in a fissured economy have heightened concern for their brand reputation, making them sensitive to negative press. Against concerns that their workers are vulnerable to the new coronavirus, some gig-economy businesses, like Postmates, have taken ad hoc measures to cover some of their fleet’s medical costs with policies that—while sparse in detail—loosely resemble modest employee benefits. But the media’s gaze is fleeting, and these P.R. measures have an element of noblesse oblige: Without actual laws governing their operations, they reserve the right to take just as they give. 

In early March, some Postmates workers began to find that the pay floor on a given job had dropped once again. Gig workers often complain of a lack of clarity when it comes to pay—platforms found to be factoring customers’ tips into worker base pay were the villains of one of Working Wahington’s most successful organizing campaigns—and it can be difficult to get clear information in the face of abrupt, sometimes idiosyncratic pay changes. Postmates’ pay system is actually relatively transparent, and The New Republic reviewed sets of itemized pay-stub screenshots from workers in three different U.S. cities. The screenshots and interviews with Postmates workers indicate minimum pay was automatically bumped up to at least $4 until May 2019, when Postmates sent Lyn the email about the pay update. In the email, Postmates told Lyn it was removing the minimum pay guarantee. Screenshots from Lyn and others show that it seemed to be lowered to $3.

But beginning in early March, screenshots show, the minimum pay guarantee appears to have been either eliminated entirely or at least lowered further. For a single delivery, one worker made as little as $2.45, a screenshot showed. For car-based workers like Lyn who generally take higher-paying jobs, the change may make little difference. But for Ben Goehring, who in addition to his work at an Amazon Warehouse, delivers goods part-time on an electric skateboard around Arizona State University, the missing income “adds up.” He said he received no notification from Postmates about the change: It “feels kind of scummy.” Postmates did not address repeated inquiries about the apparent pay cut, but in a statement to The New Republic, the company said it “is a stalwart advocate for the couriers, small business owners, customers, and the neighborhoods in which we operate. We believe all workers should have access to a livable income.” 

Platform workers tend to be more active on digital forums like Facebook groups and Reddit than their counterparts in traditional service industry contexts, said Wilson, and lately the forums have buzzed with activity. Amid the apparent pay cut and the coronavirus crisis, online commenters, as well as some who spoke with The New Republic, were questioning whether they should continue working for Postmates. In recent days, Lyn, who worries he’ll accidentally get an older live-in relative sick, has stopped delivering altogether. But he could prove to be the exception. Unemployment rates are skyrocketing. Absent a robust government response, desperate workers abound. And in the coming months, gig companies, already leveraging the crisis to recruit cheap labor, may well find that it’s a buyer’s market.