09 May Just a Mis-Understanding Between Companies and Workers?
A big misunderstanding? Uber and Lyft drivers are protesting across ten U.S. cities this week, as well as in the U.K., South America and Australia, saying that the companies are treating them unfairly. The companies say that they are a great deal for the drivers, many of whom are thrilled to get a bit of extra money working at what is not their main source of income. The drivers want to be treated like employees and the companies say that that was never what they were intended to be. Some wires seem to have gotten crossed, to say the least.
Ride sharing is going through something of a transition. A few years ago I got caught in traffic when Toronto taxi drivers staged a protest over the fact that ride-sharing services were being allowed in the city. A cyclist weaving his way around the taxis went a little beserk at the slowdown and he and a taxi driver got into some kind of shouting match. I didn’t hear it all, but I did catch the cyclist screaming ‘Your days are numbered, everybody wants Uber instead of you!’
That was over three years ago and at the time Uber still seemed kind of cutting edge and cool. In a way it still does, at least to me. I find it convenient to call and to take and have always found the drivers to be friendly and the cars to be nice. The people who do not like Uber (a company that is just on the brink of launching an IPO) are their drivers. The drivers find a whole list of things about the companies that facilitate their paychecks (who are not actually their employers) and their working conditions uncool, to say the least.
Although the demands vary a bit from group to group, the ride-share drivers from Uber and Lyft basically want to be treated like employees, getting better compensation, benefits and working conditions. They claim, with some justification, that they have built these companies and it is appalling that Uber can launch an IPO for a cool $10 billion or so that does not benefit them in any way. The companies points out that they have upped driver compensation over the past few years and will be doing more in future, so all should be good.
To understand the disconnect between the two it is helpful to look at an analysis of gig workers done by consulting firm McKinsey a few years ago. McKinsey divided gig workers into four categories with the biggest group being casual earners, those that choose to work gigs like being ride-share drivers for a bit of extra income. McKinsey figures they are 40 per cent of the total. The sweet retired cafeteria lady who drove my family from the airport in Charleston, S.C. a few years ago (she was working a few hours a week to get out of the house a bit and also so she and her husband could go on an anniversary cruise) would fit into that category. Casual earners are by and large happy gig workers. Free agents, who McKinsey pegs at 30 per cent choose freelance work and make full time incomes from it are also happy. These are the systems professionals or photographers or interior designers who take contracts or gigs, maybe using platforms to find work.
So that gives up 70 per cent of total gig workers who are outside of the ones you see protesting Uber or Lyft or anything else. That leaves us with 30 per cent of the total who are in the
final two categories McKinsey identifies: reluctants (16 per cent) and the financially strapped (16 per cent). The financially strapped are what used to be called ‘Moonlighters’ those who have a different main job but who use the gig economy to supplement it. They could be uber drivers or babysitters or they could assemble Ikea furniture on the weekends, maybe finding gigs from sites like Task Rabbit. They may not be ‘happy’ gig workers exactly, but they are apparently less unhappy than the ‘Reluctants’. This is the group that would like to be working actual, old-fashioned jobs with employment protections and benefits and the like. They are very much the ride-share drivers you hear in the media and they have become the poster-children for the gig economy.
The disconnect, such as it is, seems to be between the ride-share companies who insist that their drivers are mostly in the first three categories and are mostly casual earners or financially strapped (and happy for the work) or else free agents of a sort. In my unscientific polling of drivers across several cities, I would tend to agree with that assessment. From the guy I met in Florida who had sold a restaurant and was gearing up for his next venture to the retired Ottawa driver who told me he had bought his dream car but wanted other people to pay for it to the packaged-off tech guy in Phoenix who said he really didn’t need to work but his wife wanted him out of the house a few hours a day, I have met a lot of people who seem to have an agenda beyond just getting paid. But of course everyone wants to get paid too and there are definitely those who have no other options than to drive ride-shares. They are the reluctants and they want to turn something that the company never envisioned as a job into one.
The ride-share drivers have a point and maybe they will get the concessions they want. Some jurisdictions have put in gig economy protections already, or banned companies like Uber altogether and to avoid more of that the companies may well work on creating happier drivers.
Still, it might be a good thing for everyone to remember that the gig economy is still a work in progress, and characterizing it one way and creating blanket policies around it are not likely to work for long.