In a guest column published by several regional newspapers, Associate Professor Eric Fink at the Elon University School of Law points out shortcomings in federal labor laws as they apply to workers for app-based companies like Uber and Taskrabbit.
The following column appeared recently in the (Burlington, N.C.) Times-News, the (Greensboro, N.C.) News & Record and the Greenville (S.C.) News via the Elon University Writers Syndicate. Views are those of the author and not Elon University.
*****
By Eric Fink (efink@elon.edu)
App-based on-demand services have emerged as the latest hot business trend. Companies like Uber, Postmates and Taskrabbit enable users to arrange rides, deliveries and other services at a moment’s notice.
The business model has brought greater convenience and reduced costs for customers, while attracting enormous infusions of venture capital for the companies. But for the workers who actually perform the services, the picture is less rosy.
As a recent report by the National Employment Law Project explains, the success of companies like Uber is due in significant part “to the efficiency with which they squeeze labor from their workforces, spreading business risks downward to their workers, without whom they cannot succeed but to whom they have no commitment or accountability.”
These companies position themselves as intermediaries connecting people in need of services with other people willing to provide those services. They insist that workers are “independent contractors” operating their own micro-businesses. As a result, workers assume the legal risks and financial costs of doing business, which in a traditional employment relationship would be the employer’s responsibility.
Uber drivers, for example, must provide their own vehicles and pay for the maintenance, gas, insurance and various other costs of operation. These expenses put a substantial dent a driver’s income. While Uber touts typical annual earnings for drivers in the $90-100,000 range, figures that have repeatedly been called in question, after accounting for expenses, it is questionable whether Uber drivers really earn more than traditional taxi drivers.
Workers classified as independent contractors also lack protection under wage and hour, anti-discrimination, workplace safety, workers compensation, unemployment compensation and other employment laws. They are exposed to risks and vulnerable to exploitation that such laws are intended to shield against.
Nor do independent contractors have the protection that federal labor law extends to employees who seek to organize and act collectively to enhance bargaining power in dealing with their employers. Indeed, independent contractors who engage in collective action may face not only retaliation by the companies for which they work, but substantial liability under antitrust law.
The nature of work in the on-demand economy may also have an adverse impact on workers’ satisfaction and well-being. Jobs consist of discrete “gigs,” with workers performing “diassembled microtasks” that offer little opportunity for skill enhancement and can fuel alienation. Irregular and unpredictable schedules can prove disruptive and stressful.
The economic and social costs associated with these problems go unaccounted for in most discussions of the on-demand economy. To rectify the problem, NELP has proposed a set of legal reforms to ensure that on-demand gig workers do not sacrifice basic and essential protections when they enter the on-demand economy. These proposals include:
· Extending coverage under certain labor and employment laws regardless of nominal classification of workers as ‘employees’ or ‘contractors’
· Enabling workers to organize and bargain collectively over their terms and conditions of work
· Establishing standards for wages and working conditions in various service sectors
· Protecting workers’ privacy by regulating surveillance and data collection by companies
· Guaranteeing paid sick leave and retirement plans
· Enhancing access to jobs through universal broadband internet service and job-matching services
Of course, these proposals would entail costs that would either cut into company revenue or be passed on to consumers. Yet they are not absent from the existing on-demand economy. They are borne by workers, out-of-sight and out-of-mind to the public that enjoys their services and the companies that profit from them.
An important goal of the legal system is to allocate the costs of social activity in an efficient and equitable manner. Reforms like those suggested by NELP would help achieve that goal in the on-demand economy.
Eric Fink is an associate professor at Elon University School of Law who specializes in labor & employment law, and consumer protection.
*****
Elon University faculty with an interest in sharing their expertise with wider audiences are encouraged to contact Eric Townsend (etownsend4@elon.edu) in the Office of University Communications should they like assistance with prospective newspaper op/ed submissions.