The Real Fees of Gig Economies

Adrian Machado
Dec 30, 2018 · 5 min read

Originally, I was planning on blogging about my last two internships at Facebook, but while I was trying to find themes that tied the various events together, I found myself starting almost every recollection with the same few phrases; “I grabbed a Lyft to…”, “We booked an Airbnb at…”, “We ordered food from…” which made me realize two things. First, the fact that ordering food counted as an event for me speaks volumes about how uneventful my life is. Second, and more importantly, how ingrained gig economy apps have become in my lifestyle.

Just for a quick refresher on what I mean by Gig Economy, I will borrow Investopedia’s definition:

In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees.

I don’t want to dwell too much on what gave rise to the gig economy, or how it’s affected employers, but rather how it’s affected employees -err… contractors, and how they are treated.


The Cost of Employment

For many gig employees, being able to take control of their employment, and schedule instead of being tied to a fixed hour job that’s an hour drive away is quite liberating. For others, gig apps provide a low barrier to entry job in an otherwise tough job economy. Companies like Uber and DoorDash are all too aware of the appeals of gig economy jobs, and have taken advantage of the system by labelling workers as independent contractors. This makes workers solely responsible for services typically provided by employers including workers’ compensation and employment insurance. By giving workers this designation, judgement about what injuries warrant compensation is placed into the hands of the employer, leading to cases where workers are left hurt and uncompensated. One anonymous Uber Eats worker had broken his left hand during a delivery, but instead of receiving medical attention or compensation, he was asked to complete his delivery instead!

But surely the large amount of quick cash earned through the app can more than offset the costs of a few pesky medical bills, right? After-all, Uber does say that you can make $30/hour driving!

Make $30 an hour driving! (possibly contingent on being a blonde model)

Well that independent contractor status rears its ugly head again as expenses like fuel costs and car depreciation, as well as income taxes are all left to the worker to handle. After expenses are accounted for, Uber and Lyft drivers make roughly minimum wage or less depending on which costs are factored in. To make matters worse, due to competitive fare price reductions, and larger margins, gig economy workers are set to make even less in the future. It is worth noting that drivers in certain regions like NYC and SF do make significantly more, with some of my driver’s claiming to make two thousand dollars a week, however the hours required to do so are usually quite high. These hard workers become the poster-children for gig economy companies, touted as the embodiment of the American dream.

It’s fitting that the photo is in black in white, as these are 19th century level employment standards

The introduction of tips has been praised as a way for workers to be rewarded for good service, at least in an ideal world. Needless to say, we don’t live in an ideal world, and tips have become an avenue for companies to pass the bill to users instead of paying appropriate wages and bonuses to top performers.

The Cost of Usage

Employers can’t take all of the blame when it comes to mistreatment of gig economy workers. Even though many of us are aware of the issues stated above, we continue to use and support gig economy companies due to the convenience they supply. I won’t lie and say that I will boycott all of these apps, but I will try to cut down on my usage, and try to build cognitive empathy with workers.

How many times can you remember cursing to yourself or getting frustrated at Lyft drivers missing their turns or taking a long time on their way to pick you up. Next, think about how many times you probably don’t even remember doing this. We don’t think about the person in the car (grainy thumbnail), whether they are stuck in traffic (we only see a car floating on an empty street in the app), or if they are new to the area (or even country for that matter). All we know is that we paid our goddamn $7.95 fee and want to get to our destination that we… honestly aren’t even in a rush to get to. This dehumanization doesn’t stop at the passenger doors either.

Think back to how many times you’ve entered into a vehicle and at most mumbled a hello before the driver departs. Any continued attempt at conversation from the driver is met with unenthusiastic replies until they give up. To be honest, I don’t see why people are afraid of autonomous Ubers, we often treat them like they are driverless already. To me, building empathy with drivers means talking with those who are willing to talk — you’ll be surprised by what you can learn. On a recent ride, I talked to a driver who had recently moved from Kenya, and became a driver to make some money (his qualifications from home didn’t carry over) and improve his english. He taught me about how many other East Africans were moving to Seattle, but many of them relied on driving to support themselves. In another trip down in the Bay Area, an elderly Indian man told me about how he needed to drive at least 12 hours a day, 7 days a week to afford his family’s home due to rising costs and gentrification. I asked him about his most memorable ride, and he told me about a facebook employee that had once signed him in as a guest so he could eat breakfast in the campus cafe.

Even if you personally haven’t given driver’s the cold shoulder, or gotten frustrated, it seems that a culture of entitlement around gig economy services has formed. There are countless videos of driver abuse, but who can blame them when the former Uber CEO was found arguing with a driver too?

Entitlement in a nutshell

Drivers are often left with little recourse, as was the case with the driver in the video above. This is of course an extreme example, but it does highlight the entitlement mindset: “There are fifty of you, but one of me who spends the money”. Spending money means that you get a worker’s service, it doesn’t mean that you can treat them like a tool.

If you knew that your driver was pulling 60+ hour weeks to support their family, would you still care that they were a couple minutes late? If you knew that the platform both promoted and left nearly no other option but to work 60+ hours in order to make ends meet, would you still use it? For many, despite fervently denying it, our actions answer with a resounding YES. That’s the true fee of the gig economy, its not just costing us money, its costing us our principles.

Note: I encourage you to watch CBC’s video on food delivery, the hidden markups were surprising

uWaterloo Voice

uWaterloo Voice is an unofficial student run publication aiming to showcase articles created by University of Waterloo students. These articles can be of any topic and anybody from the University of Waterloo is able to write for this publication.

Thanks to Bilal Akhtar

Adrian Machado

Written by

uWaterloo Voice

uWaterloo Voice is an unofficial student run publication aiming to showcase articles created by University of Waterloo students. These articles can be of any topic and anybody from the University of Waterloo is able to write for this publication.

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