A November ballot question in California known as Prop 22 will determine whether app-based delivery drivers in the state must be classified as employees or not.
The proposition would give Uber, Lyft, Instacart, DoorDash, and other app-based transportation companies an exemption from the new state labor law known as AB5, which makes it harder for California workers to be classified as independent contractors.
If Prop 22 passes, the companies promise to provide drivers with a new benefits package, including limited healthcare subsidies and accident insurance, a per-mile reimbursement to account for gas and other vehicle costs, as well as a “new minimum earnings guarantee” equal to 120% of the minimum wage applied to the drivers’ “engaged” time (defined as the time between accepting a ride request and completing the trip), all while preserving their independent status.
If the companies fail to persuade voters to pass Prop 22, their whole business model could be at risk.
One of the gig companies’ primary arguments in favor of the ballot question is that it would keep drivers’ jobs flexible. But what exactly does it mean to have flexible work?
Most jobs don’t fall into two neat categories—you’re either an employee or an independent worker who keeps independent hours. According to a 2019 working paper by Princeton University researcher Alexandre Mas and Harvard University researcher Amanda Pallais, the majority of today’s jobs, particularly for more educated workers, have some nontraditional component. Usually that’s due more to the characteristics of the job than the worker’s preferences, they found.
But what about Uber and Lyft drivers, or DoorDash and Instacart delivery workers? While gig work generally allows workers to adjust their hours and earn money almost immediately, the reasons for why they go into this work presumably varies, including choosing the job for its flexibility, or choosing it because they are unable to find more stable work.
While flexibility in work schedule and location have been touted as a means of achieving work-life balance, Mas and Pallais say they “do not find evidence that practices lead to reductions in job stress or family life interruptions. In fact, the opposite is generally true.”
There’s no question that driving for Uber and the like provides a safety net for people in other lines of work who suddenly find themselves unemployed. Mas and Pallais found that workers who start a gig job tend to have falling income, declining assets, and increasing debt. But even if the work offers a much-appreciated lifeline, over time it can evolve into something less desirable for the worker, due in part to the relative lack of structure to these roles.
For those in traditional office jobs, the struggle with “flexibility” often comes down to balancing work with a personal life. For on-demand workers like Uber drivers and Instacart delivery workers, the struggle typically is with having irregular schedules and no benefits—and the pandemic is testing these job traits.
Flexibility as a narrative
Hector Castellanos is an Uber driver against Prop 22. He started driving for the company eight years after he and his wife bought a house in Antioch, California. His wife owns a housecleaning service, and he was helping her out with her business, but started driving on the side to help pay the mortgage. He began part-time, driving about eight hours a day. He was making “good money,” he says, and took up driving full-time about three months in.
But over the years the pay got worse, he says—no longer were there as many incentives for drivers—and then in 2017 he had to get surgery on his shoulders and was unable to drive for eight months. As a gig worker, he didn’t receive any injury-related compensation from Uber. His daughter dropped out of college to work and help with the bills while he recovered.
Recovered now, he says he drives about 12 to 14 hours a day to “put food on the table.”
His attitude toward gig work has shifted. “I didn’t receive any help in those difficult times,” he says. “I want Uber to stop spending so much money to keep denying the benefits that we really need—especially in these difficult times, they can support us more.”
While gig workers who put in full-time hours make up a small minority of app-based drivers, Uber and Lyft have depended on these drivers for years. A study in July from UC Berkeley’s Institute for Research on Labor and Employment found that nearly one-third of drivers provide more than half of all Uber and Lyft trips in Seattle. Full-time drivers are more likely than the part-timers to depend on Uber for their income.
Economist Michael Reich, a co-author of the study, says the findings from Seattle are “not that far off” from the situation in San Francisco and other parts of California. Uber has said in response that the 9% of California drivers who averaged at least 40 hours a week with Uber completed 25% of trips.
The flexibility “myth”
Uber has long claimed that most of its drivers want flexible work. Here’s former CEO Travis Kalanick, in his 2015 article titled “The future of work: independence and flexibility”:
“…[T]he people who spend most of their time driving with Uber seem to value this flexibility and independence as much if not more than the majority who drive just a few hours each week. That’s because a typical 40-hour job rarely offers the ability to visit an elderly parent, go to a job interview or tend to family emergencies without asking for permission beforehand.
And here’s current Uber CEO Dara Khosrowshahi on the company’s second-quarter earnings call:
“The vast majority of drivers who drive either on our platform or on Lyft or couriers, etc., do so on a part-time basis, do not want to be employees, and value the flexibility that they get using our platforms.
Uber’s rhetoric suggests that classifying drivers as employees would somehow make the job less flexible. But Brian Chen, a lawyer for the National Employment Law Project, says that’s simply not the case.
“The app-based companies have taken insecure work and dressed it up through a myth of ‘flexibility,’” says Chen. “The point is that workplace flexibility exists independent from employee classification.”
When we asked Uber for a comment, a press rep referred us to an August blog post by Alison Stein, an economist at Uber. She makes the case that flexibility at Uber, where drivers can choose when and where they work, is different from flexibility at, say, Starbucks, arguing that “baristas can’t just walk in unannounced, decide they will only make lattes while refusing all orders for cappuccinos, leave during the morning rush to go pick up their kid from school (without permission from their boss), and return to work at a Peet’s Coffee.” The blog post continues:
Being an employee ultimately means making a tradeoff. An employee gets paid at least the state minimum wage, the possibility of unemployment support, workers’ compensation for injuries on the job, an employer contribution for payroll taxes, health insurance (for workers meeting minimum hours thresholds) and, in some states, sick leave. But being an employee also means you have to show up when your employer asks, you must do exactly what your boss says, and if you miss too many shifts, aren’t productive, or come in late, you risk getting fired. You also can’t work for a few weeks and then stop to do something else, like school or caregiving.
And yet for all the supposed benefits of flexible work, the number of independent contractors in the US has held relatively steady the past 20 years. According to the Bureau of Labor Statistics, independent contractors represented 6.9% of the total employed in 2017, versus 6.7% in 1997.
Meanwhile, the pandemic is forcing some drivers to reconsider working on-demand. If Prop 22 passes, Castellanos says he will look for alternative work—maybe with the US Postal Service—but this time in a traditional job with benefits.