My daughter recently moved to the Bay Area. She has a new job, her first out of college, but viewed the move with trepidation. Could she and her roommates afford west coast rents on their modest salaries? They worried about returning to their old bargain basement digs – unsavory but inexpensive – it got broken into twice, and one night they awoke to find a passerby smashing in their car windscreen with a brick.
They wanted safe – but could not afford it.
The hunt was on. The onset of COVID19 had driven all three home to their parents. But understandably, the itch to get on with grown up lives even in the new normal, intensified their search.
After four months of trawling through rental property websites, an Airbnb host offered the trio her charming San Francisco apartment at an incredible discount – much to their disbelief, it was well below its listing price. It appears that after the owner’s business took a nosedive in the pandemic, she was prepared to take a chance on newly minted graduates, offering them a long term rental they could just about afford.
Many gig workers like my daughter’s new Airbnb landlady took a hit when the pandemic struck. Once, they were the face of a thriving gig economy – Airbnb reported that its women hosts earned nearly $15 billion in the last year alone.. But as the pandemic unceremoniously sank the economy, forcing businesses to shut and jobs to vanish under the threat of infection, many gig workers – Airbnb hosts, Uber drivers, dog walkers, babysitters, Task Rabbit ‘taskers’ – faced with the prospect of layoffs, reduced hours and pay, had to invent new ways to supplement incomes in order to survive.
“Quite frankly, now is not a good time to be a gig worker, said Dr. Alexandrea Ravenelle, Professor of Sociology (UNC Chapel Hill), at an Oct 2 Ethnic Media Services briefing about the pandemic’s devastating impact on the gig economy.
Not only do gig workers find business drying up, but those who depend on app-based livelihoods risk exposure to the coronavirus.
Uber and Lyft drivers taking strangers to airports and Task Rabbit workers going into private homes to assist or run errands, are especially vulnerable, because they often work jobs “in close proximity with strangers that carries a high risk of exposure to COVID19,” warned Dr. Ravenelle, who interviewed 200 gig workers for a study. The danger of infection coupled with a huge drop in demand for their services, puts gig workers in a “lose lose situation.”
Challenges facing gig workers
Already enduring precarious circumstances, gig workers are now forced to compete for a smaller share of offerings. Even though the lockdown triggered increasing demand for food delivery apps – DoorDash, UberEats, GrubHub – and grocery shopping apps like Shipt and Instacart, which app-based workers have long relied on as dependable sources of income, the rise in demand hasn’t helped.
In fact, app-based workers now are fighting off growing competition from a surge of newly unemployed workers for food delivery jobs, even as they fight to keep the virus at bay. In Chicago, Saori Okawa, who worked as an Uber driver before the pandemic, told the Chicago Tribune she was making less money delivering food now than she did ferrying passengers in her car.
Growing numbers of unemployed workers are using what Dr. Ravenelle, calls the ‘side hustle safety net’ to keep afloat in a sinking economy. New ‘hustlers’ are flooding the gig economy, either because they do not know they are eligible to receive unemployment benefits, or, can no longer wait for funds; but many refuse to apply for what they perceive as the stigma of a government handout. Even documented and green card holders who are eligible have refused unemployment benefits, fearing it would jeopardize their legal status.
Newcomers are turning to gig jobs as “an occupation of last resort,” even though it pays less than unemployment benefits, said Dr. Ravenelle. Many want to escape being trapped at home without any work, but most unemployed workers are desperate to feed their families and pay their rent.
She revealed that this non-traditional workforce as a whole is slightly more educated than the overall workforce; the survey indicated that 36% of respondents had undergraduate degrees, while some even held PhDs and medical degrees.
Nevertheless, none of these workers will find allies in the multibillion dollar companies that hire them, especially in California (and San Francisco in particular), which has a higher concentration of workers, because that’s where many online platform companies got their start.
Prop 22 Hurts Gig Workers
In California, gig companies are trying to sidestep legislation (AB5) that reclassified gig workers as employees, to avoid paying benefits or guarantee a minimum wage to workers. App-based giants Uber, Lyft, Instacart and DoorDash spent almost $188 million to support Prop 22 – a ballot measure to reclassify app-based (rideshare) and delivery drivers as independent contractors instead of employees, and exempt themselves from compensating workers fairly. Prop 22 would deny drivers basic safety net protections like paid sick leave, workers compensation or unemployment benefits, that are crucial during this pandemic. It removes time-based wage protections, so drivers are only guaranteed $5 an hour. As 1099-based independent contractors, workers are not entitled to minimum wage, overtime, or unemployment insurance. Nor would there be protections for health and safety, family or workers’ compensation.
“Drivers in California are owed billions in dollars from back wages, said Dr. Veena Dubal, from UC Hastings School of Law, calling Prop 22 “the most dangerous labor law that I’ve seen in in my lifetime.”
“We need the benefits. We don’t want to depend on public assistance when we’re working for multi-billion dollar corporations,” said Robert Moreno, one of over 57 million US gig workers (according to the Bureau of Labor Statistics), who makes a living as an Uber driver. “The almost $200 million that Uber and Lyft spent on the campaign could have covered almost three years of benefits.”
After the pandemic Moreno saw his wages drop nearly in half from $850 to around $350 for a weekend shift, as the ride-share giant began to shortchange drivers with fee schedules and penalties. Moreno alleged his fee share dropped from 50% to 25% of the fare even as Uber charged passengers more than the fare shown on the driver’s app. Drivers are only compensated for ride time but not for awaiting a fare, so, if the ride time is just 5 minutes, asked Moreno, “What’s the profit in that?” Uber also penalized drivers who refused low rated passengers or end-of-shift pickups, by giving them inferior assignments.
“There is no flexibility. They own you,” said Moreno.
Layoffs, cost-cutting, decrease in demand and safety concerns are forcing gig workers to quit, even as the coronavirus threatens the economy, their lives and livelihood.
Will gig workers survive the pandemic?
In March, Airbnb reported that in the last 12 years, women’s percentage of five-star reviews had grown to 83 percent, but by July, Brian Chesky, Airbnb’s chief executive, told 1,900 employees – a quarter of Airbnb’s work force – they were out.
My daughter’s Airbnb host has renewed her lease for another 6 months.
The odds aren’t in your favor when gigs dry up in a gig economy.
Meera Kymal is a contributing editor at India Currents