Hailing controversy: Rideshare apps pour $188m into CA marketing campaign | US & Canada Information
Los Angeles, California – Today anyone who welcomes ridesharing service in California is likely to get on with someone like Mostafa Maklad at the wheel. Maklad, a 36-year-old Egyptian emigrant who lives in Oakland, drives 10 to 12 hours a day for up to six different app-based US companies. He switches between Uber, Lyft, DoorDash, Grubhub, Postmates, and Amazon, and makes a living delivering people, packages, and groceries across the San Francisco Bay Area.
Maklad said it wasn’t always like that. When he started driving for Uber three years ago, he worked 10 to 12 hours a week while attending school to become a cybersecurity specialist.
“Back then we made money because the prices were higher and there were far fewer drivers than today,” Maklad told Al Jazeera. But since the beginning of the coronavirus pandemic, the waiting times between trips have been harder to bear, so he’s jumping from app to app on a carousel that he can’t escape.
Uber and Lyft rely heavily on a burning workforce, and these drivers are unlikely to be battling over employee ratings.
In the gig economy, app-based employees value their independence and flexibility. But there are sometimes costs associated with these things, including the lack of a safety net when business slows or workers get sick. Partly, this is why there is an ongoing argument in California – the most populous state in the United States – over how workers like Maklad should be categorized.
A 2018 California Supreme Court case resulted in a controversial labor law called AB5 that forced dozens of industries to classify their freelance workers as benefits and health and safety workers. There was an immediate backlash, and the state parliament reacted with exceptions for a number of professional professions. But lawmakers wouldn’t rule out rides like the one Maklad drives for.
There is no flexibility in not having benefits or sick days, especially during a pandemic.
Enter California’s Proposition 22, a November 3rd election created by Transportation Network Companies (TNCs) to counter AB5. The primary bankrollers – Uber, Lyft, and DoorDash – spent an unprecedented $ 188.9 million to make it – and count. The ridesharing and grocery suppliers are spending 20 to one on the union-supported no campaign. The measure aims to classify drivers as independent contractors, but with some modest new benefits.
Ridesharing apps Uber and Lyft as well as the food delivery app DoorDash outperformed the Anti-Prop 22 campaign by a ratio of 20 to 1 [File: Mike Blake/Reuters]These include a guaranteed earnings of 120 percent of the local minimum wage for drivers while driving, a grant for health insurance if they drive at least 15 hours a week, a 30 cents per mile reimbursement for gasoline, and some additional costs. and reimbursement of some medical expenses if they are injured at work. Critics say these changes don’t go far enough: there is no pay for overtime or time drivers spend waiting for tariffs, no sick leave, and no union formation, including standard protection.
If Prop 22 fails, however, the big tech companies behind it predict upheaval: 80 to 90 percent of drivers could lose jobs and labor costs could rise by 30 percent, resulting in higher fares for passengers and lower service in suburbs and cities rural areas. Uber and Lyft have also threatened to leave California altogether.
Prop 22 also challenges politically progressive ridesharing to go the way. Will they choose to support workers’ rights over the apps that make their lives more enjoyable?
Flexibility v stability
Ridesharing or TNC companies claim that their drivers do not want to be tied as employees and that the majority still work part-time. Lyft told Al Jazeera that 86 percent of its California drivers still work less than 20 hours a week on their own schedules, and full-time drivers account for 17 percent of Lyft’s passenger hours. Uber declined to participate in this story.
“More than 70 percent of drivers want to remain independent contractors,” Geoff Vetter, a yes-to-22 campaign spokesman, told Al Jazeera, speaking of the key role of the TNC’s ad blitz.
A Pro-Prop 22 message will appear on the Uber app for users in California [Courtesy: Uber]Jan Krueger, a retired California government employee named “MomLyft,” started driving for Lyft seven years ago.
“Instead of coming home and sitting on the couch, you go out and make money and meet people,” Krueger told Al Jazeera. She has since appeared in advertisements supporting Prop 22, and drivers are determined to keep their own flexible hours.
However, other drivers say ridesharing companies are capitalizing on the loopholes in the gig economy that allow people to work full-time without the benefits of full-time employment. Cherri Murphy is a former Lyft driver who worked for the company 10 to 12 hours a day for three years.
“There is no flexibility in not having benefits or sick leave, especially during a pandemic,” Murphy told Al Jazeera.
Murphy eventually decided the wages weren’t worth the compromise for her safety and stopped driving for Lyft in mid-March.
“The bonuses went down,” she explained. “We are committed to the growth rates. And it became clear that the cost of gasoline, consumables and wear and tear on the car did not add up. “
But Krueger said she saw this work as a stopgap financial solution.
“You can’t make a career out of that. It’s just an appearance, ”she said. “When people quit their jobs to drive, I tell them they’re crazy.”
Churn and burn workforce
A study of online platforms by economist Dmitri Koustas found that most gig workers start such jobs after a significant loss of income, but don’t stay with app-based companies for long. According to experts, this temporary nature of the workforce also makes it difficult to organize the work.
“Uber and Lyft rely heavily on a workforce, and these drivers are unlikely to compete for employee ratings,” said Tia Koonse of UCLA Labor Center, who has jointly authored studies of the nature of gig work in Los Angeles County and California in the broader sense.
Cherri Murphy is part of the campaign against Prop 22 [Courtesy: Brooke Anderson]Koonse research shows that more and more drivers are working full-time for an average of 13 months, and these workers are typically older, immigrants and people of color supporting their families. However, full-time hours are not necessarily associated with a living wage, and the latest UCLA survey found that 80 percent of gig workers were unable to cover their household expenses.
Berkeley University of California Labor Economist Michael Reich released the numbers for Prop 22, noting that the proposed benefits don’t mean much to drivers – just $ 5.64 an hour, factoring in expenses and unpaid waits for tariffs. This is nowhere near the state’s minimum hourly wage of $ 13 an hour, according to Reich’s analysis by the UC Berkeley Institute of Labor and Employment.
Setting a precedent
Reich also said what happens to Prop 22 is having an impact on other industries, states and countries in the gig economy.
“This is a really important battle. We’ll see it spread to other industries, ”Reich told Al Jazeera. “It’s not just a problem in California. This has a huge impact on the workforce – more of a race to the bottom, removing worker protection through outsourcing and subcontracting. “
Some workers travel for multiple ridesharing or delivery services to make ends meet [File: Richard Vogel/AP Photo]A recent study by the Berkeley Research Group, funded by Uber and Lyft, found that drivers in California actually make an average of $ 19.55 an hour. Lyft told Al Jazeera that “waiting time” allows drivers to earn more by working for multiple companies – a prospect that was not enthusiastically received by drivers who spoke to Al Jazeera.
The impact on passengers is also up for debate. The Berkeley Research Group study estimates that if Prop 22 were to fail, fares would rise 25 to 111 percent, and an Uber analysis said travel demand would decrease 23 to 59 percent, mostly in less populated areas .
Reich’s most recent industry research at UC Berkeley, however, only predicts a 10 percent increase in the rate when drivers become employees – and a reduction in passengers of up to two percent. Reich argues that the rise in labor costs would be borne industry-wide, resulting in more revenue for the large ridesharing companies themselves. Greater efficiency in labor management would also absorb some of the increased costs, Reich said.
A competitive and developing industry
Meanwhile, Uber and Lyft are battling two California lawsuits against them for non-compliance with AB5. Earlier this month, companies lost their calling with a decision to reclassify drivers as employees.
Last week, a new lawsuit brought by a group of gig workers against Uber called for $ 260 million in fines for aggressive in-app messages urging them to support Prop 22.
It’s not just a problem in California. This has a huge impact on work – more of a race to the bottom, removing the protection of workers through outsourcing and subcontracting.
Now, just a week before the elections in California and the rest of the US, Uber and Lyft are hoping voters will stand on their side even if the judges don’t. A recent poll by UC Berkeley shows that 39 percent of voters are in favor of Prop 22, 36 percent against and 25 percent undecided. The measure must cross a 50 percent threshold to exceed and requires a seven-eighth majority of California lawmakers to overturn it.
Regardless of the Prop 22 outcome, UCLA labor researcher Koonse believes the ridesharing industry is poised for a shift. A California legislative proposal called the Cooperative Economy Act would introduce worker-owned cooperatives and restructure the relationship between gig workers and various platforms.
Koonse also points out that giants like Uber and Lyft could offer drivers flexibility at any time.
“That’s fine to want as a worker, and it can be the norm,” she said. “Why should it be a zero-sum game?”