Nationwide, workers who attempted to strike were regularly attacked by the police or members of the Pinkerton National Detective Agency or Baldwin-Felts Detective Agency. Particularly bloody battles occurred with miners and railroad workers. For instance, in 1894, workers for the Pullman Palace Car Company went on strike in Chicago. The American Railway Union asked its members not to handle Pullman cars. Since nearly all trains included a Pullman car for passengers, this resulted in a nationwide train strike and led to President Grover Cleveland ordering federal troops to Chicago. After hundreds of cars were burned by strikers, the state militia was also sent to the scene. When the strikers threw rocks, the militia opened fire, killing thirteen people and seriously wounding fifty three others. Before the strike was over, more than thirty people were dead and seven hundred had been arrested. The Chicago Times reported, “The ground over which the fight had occurred was like a battlefield. The men shot by the troops and police lay about like logs.”19
At the turn of the century, strike struggles were multiplying: in the 1890s, there had been about a thousand strikes a year; in 1904, there were four thousand strikes. It soon became clear that “the state stood ready to crush labor strikes, by the law if possible, by force if necessary.”20
Perhaps the most vicious attack on striking workers occurred in April 1914, in southern Colorado. Before that, in September 1913, when eleven thousand immigrant workers for the Colorado Fuel and Iron Corporation, owned by the Rockefeller family, had gone on strike protesting low pay, dangerous conditions, and their almost feudal existence in the company-owned mining towns, they had been quickly turned out of their company-owned shacks. Assisted by the United Mine Workers Union, the workers took up residence in tents in the local hills and continued their strike, even as the Baldwin-Felts Detective Agency attacked with Gatling guns and rifles.
Eventually the National Guard was sent in, its wages supplied by the Rockefellers. The guardsmen brought in strikebreakers (not telling them that there was a strike) and beat and arrested miners by the hundreds. They also utilized a “death special,” an improvised armored car that would periodically spray machine-gun fire. On April 20, 1914, in the mining town of Ludlow, two National Guard companies began a machine-gun attack on a tent colony of twelve hundred men, women, and children. While the miners fired back, the women and children dug pits below the tents to escape the gunfire. Then, at dusk that day, the guardsmen approached the encampment and set the tents on fire with torches. Families fled into the hills, with thirteen people killed by gunfire. The next day, as the remains of the tent colony was removed, the charred bodies of eleven children and two women were found in a pit below one of the tents. This earned the battle the title of the Ludlow Massacre and national attention, including editorials in the New York Times; and five thousand people marched on the state capital in Denver in protest. In the end, sixty-six men, women, and children were killed; none of the militiamen or guardsmen were indicted for crimes; and the miner’s union was not recognized.21
During the First World War, labor efforts were less prominent, but in February 1919 the Industrial Workers of the World (IWW or Wobblies) led a hundred-thousand-worker walkout in Seattle. Immigration quotas established in 1921 and further reduced in 1924 meant fewer new workers to be exploited; and until the stock market crash of 1929, most attention was paid to prosperity, as opposed to continued labor efforts.
During the Great Depression, worker organization was perhaps best described as the original sharing, or bartering, economy. In Seattle, in particular, the fishermen’s union traded fish to fruit and vegetable pickers, and food was exchanged for chopped wood. In Pennsylvania, unemployed coal miners dug small mines on company property and then sold the coal for below-market prices, eventually mining and selling five million tons of “bootleg” coal. Nationwide, by the end of 1932, there were 330 self-help organizations in thirty-seven states, with more than three hundred thousand members, although as the economy deteriorated further those organizations, too, collapsed.22
In 1934, 1.5 million workers went on strike, including longshoremen on the West Coast, 325,000 southern textile workers, and 2,500 Lowell mill workers. In 1935, the Wagner Act was passed, which established a National Labor Relations Board and gave employees the right to form and join unions and engage in collective bargaining and strikes. Then, in 1938, President Roosevelt signed into law the Fair Labor Standards Act, which banned oppressive child labor, set the minimum hourly wage at twenty-five cents and the maximum workweek at forty-four hours (later shortened to forty hours under the Fair Labor Standards Amendments of 1966).23
The Wagner Act was challenged by steel corporations, but the Supreme Court found it to be constitutional on the basis of the federal government’s right to regulate interstate commerce, which was hurt by strikes. In 1936, rank-and-file workers developed the idea of a “sit-down” strike, where they sat down on the job and refused to leave. The sit-down made it harder for strikebreakers to be moved in, helped keep workers unified, and provided more pleasant conditions than marching outside. The sit-downs were especially popular: 477 such protests in 1937 alone.24
In these grassroots strikes, involving union leadership was often seen as an afterthought, and local unions were often not aware that a strike was brewing until one was well under way. As a result, corporations eventually embraced the Wagner Act as a way of controlling direct labor action. The National Labor Relations Board and the unions “would channel the workers’ insurrectionary energy into contracts, negotiations, union meetings, and try to minimize strikes.”25 After the National Labor Relations Act was passed in 1935, the number of workers and the percentage of the workforce in unions grew rapidly, from 7 percent of total employment to a high of almost 35 percent in 1954.26
The labor movement was successful in many ways. For nearly fifty years, from the beginning of the Great Depression and until the early 1970s, the trend in income distribution in the United States was toward greater equality. In 1928, the height of the Gilded Age, the top 1 percent of families in the US income distribution held 23.9 percent of national income. By the end of World War II that share had fallen by nearly half, to 12.5 percent, leveling off to around 10 percent by the mid-1950s, where it remained for nearly twenty-five years.27
DEVOLVING EMPLOYMENT PRACTICES
Today, many workers benefit from policies fought for by early unions and their striking workers: the minimum wage, a forty-hour work week, and even the simple recognition of unions as representing workers. But for workers in the sharing economy, it’s as though none of these labor battles were ever fought, much less won. Gig economy workers are often second-class citizens in the labor world, denied many of the same rights taken for granted by workers in the mainstream economy. For instance, even though the right to organize and form a union was established in the 1935 National Labor Relations Act, most sharing economy workers are considered independent contractors and outside the coverage of the act. As a result, as of this writing, only drivers in Seattle have been granted the right to unionize, under a law approved by the Seattle City Council.28
The lack of union or employee status for Uber drivers has led to an ironic twist—a lawsuit alleging that Uber’s technology unlawfully coordinates fares and surge-pricing fares as part of a large-scale price-fixing conspiracy.29 Much in the same way that early efforts to prevent collective bargaining hinged on the idea that independent workers couldn’t unite to secure rights that they were otherwise unable to negotiate on their own, the lawsuit argues that drivers don’t compete with each other but charge fees based on the Uber algorithm. As a result, the app may violate antitrust law, which prohibits collusive practices such as price-fixing.
Meanwhile, in an effort to prevent further attempts at organizing, Uber has taken proactive actions in New York, one of its largest markets. In May 2016, Uber entered a partnership with the International Association of Machinists and Aerospace Workers to develop the Independent Drivers Guild. As part of the guild, drivers can a
ppeal deactivation decisions and can have guild officials represent them in their appeals. Yet unlike a traditional union, guild members do not have access to collective bargaining: they cannot negotiate fares, benefits, or protections—Uber will continue to make those decisions unilaterally, albeit with more input from drivers. The preliminary agreement is for five years, but in the meantime, the union will refrain from trying to unionize drivers, encouraging them to strike, or waging campaigns to have them recognized as employees. Instead of receiving benefits, drivers will be given information on where to purchase discounted legal services, life and disability insurance, and roadside help.30
Offering information on services, as opposed to offering services, isn’t a new strategy. Peers, a grassroots organization that aimed to “to grow the sharing economy” was started in 2013 with the support of twenty-two partners, including Airbnb, TaskRabbit, Lyft, and several foundations. While not directly funded by the platforms, donations from “mission-aligned” independent donors, such as platform executives and investors, have raised questions.31
Originally, Peers focused on a petition tool that encouraged members to “step up and defend the sharing economy,” but in 2014 the organization switched its focus to helping workers. Toward that end, the organization launched an “income discovery” tool that could be used by workers to find platforms that matched their assets, skills, and interests; a review tool for rating platforms; a discussion forum; and a “support marketplace,” where workers could access health insurance, accounting businesses, and other services. But the “support center” was a database of services for sale, some of which came from other sharing economy platforms, such as auto repair by YourMechanic, Airbnb listing management by Guesty, and insurance from the Freelancers’ Union. And the “income discovery tool” featured ads from companies seeking more workers for their apps.32
In its heyday, Peers reportedly had more than 250,000 members, identifying itself as “the world’s largest independent sharing economy community” and positioning the tools as a way to “support workers by making the sharing economy a better work opportunity.”33 But by the end of 2016, the organization appeared defunct: its Twitter account hadn’t posted a tweet since March 2016, and its Facebook feed had been static since September 2016. At the end of 2017, the website was no longer available.
Peers isn’t the only site that has been thought to be in the pocket of sharing economy services. Some have suggested that UberPeople.net, the discussion forum for drivers, is a lurking ground for Uber executives or at least monitored by Uber staff. Discussion threads have even been created to “expose Uber employees.”34
Most sharing economy services are a far cry from company towns where workers were paid in script and housed in units owned by the company. One notable exception to this was CrowdFlower, a online platform that allowed for data cleaning and was similar to Amazon’s Mechanical Turk. Although Mechanical Turk has been criticized for paying low wages, sometimes CrowdFlower didn’t even pay workers, instead giving them points for various online reward programs and videogame credits.35
While company towns were most common in the United States in the late 1800s, Uber’s recruiting playbook reaches back much farther. In 2013, Uber offered a partnership with Santander Bank that promised auto loans with a “low weekly payment” that would be “automatically deducted” from drivers’ Uber earnings. In a promotional video released by Uber, the Preferred Financing Program sounds suspiciously like subprime lending, with the voice-over noting, “If you’ve been turned down for a loan before, even if you have bad credit or no credit at all, we can help you get behind the wheel in a week.” As explained by Uber’s CEO, Travis Kalanick, the loan program, with payments deducted directly from Uber earnings, meant drivers “have to [keep] working with us a certain amount.” But being bound by debt to an employer is essentially indentured servitude, a practice that declined with the American Revolution and was outlawed in 1917.36
Uber’s program was halted in mid-2015 but then resurfaced later that year through Xchange Leasing, LLC. The Xchange leases offered unlimited mileage and regular maintenance, such as oil changes, tire rotations, and air filter replacement. Verge reports that when the lease ended, either through early termination or at the end of a three-year term, the driver owed a final $250. Leases with Xchange did not help build credit, but an early termination also didn’t damage a driver’s credit score. Yet the rates were high, and drivers who kept a car for the three-year term would pay thousands of dollars above the standard purchase price.37 In an article written for Bloomberg, Eric Newcomer and Olivia Zaleski discussed one driver who leased a 2016 Chevy Cruze, “If he keeps the lease to the end of its term, he’d end up paying Uber about $31,200. To buy the car, he’d need to pay Uber another $6,000 to cover the car’s residual value. The fair purchase price of the car, according to Kelley Blue Book, is $16,419.”38
Uber executives expected to lose roughly five hundred dollars per car, a small price for increasing the number of drivers on the platform. But in August 2017, just two years later, Uber executives learned that the actual losses were almost eighteen times higher: around nine thousand dollars, or half the price of a new vehicle. According to the Wall Street Journal: “By charging high-lease fees in exchange for the risk, many drivers worked longer hours and returned the vehicles in poor shape, damaging their resale value, people familiar with the matter have said.”39 Additionally, Uber found that established dealers were pushing drivers into leasing more expensive vehicles, lowering their likelihood of turning a profit. As of this writing, it was uncertain if Uber would pursue additional lease opportunities.
Just like the workers in company towns, where the loss of one’s job could also result in the loss of one’s home and the social safety net was nonexistent, today’s sharing economy workers are on their own in many ways. Workers pay for their transportation between gigs and while on tasks or rides; they (or taxpayers, through Medicaid) provide their own health insurance; they must calculate and pay payroll taxes such as Social Security/Medicare; and they must personally finance any time off (owing to illness, vacation, or a lack of work). Workers are also financially responsible for any workplace injuries, a topic discussed more fully in the following chapter. While workers can utilize online discussion boards to chat about their experiences, they remain much more isolated than other low-income workers, such as Caribbean nannies.40
It’s hard to imagine the National Guard being called on striking Uber drivers or to imagine TaskRabbit workers unionizing. But most worker strikes generally revolved around several broad issues—pay cuts, work hours, and “workplace arbitrariness,” such as policy changes and sudden firings—issues that remain particularly salient in today’s sharing economy. Much like miners and mill workers, gig economy workers experience considerable pay cuts. Both the erratic hours, where work today doesn’t mean work tomorrow, and worker income often seem to be based on the whims and desires of the platforms as much as a worker’s effort.
In the United States alone, Uber changed driver payment rates in sixteen cities in January 2014, forty-eight cities in January 2015, and one hundred cities in January 2016. Not counting the changes in guarantees and bonuses or weekly promotional rates (such as $2.75 uberPOOL rides between Manhattan and Brooklyn), the company reduced rates in New York in July 2014 by 20 percent and in January 2016 by 15 percent. Although in many cities Uber partially subsidized the cuts by temporarily reducing the commissions it collected from drivers, that wasn’t the case in New York in July 2014, when Uber continued to collect 20 percent of the reduced fares. While drivers who utilize both platforms often view Lyft more favorably, Lyft has also cut rates—reducing fares nationwide in April 2014 by as much as 30 percent.41
Table 2 shows how some New York City uberX rates have changed. Within four years, uberX drivers saw their per-minute rate cut in half, their mile rate reduced by 42 percent, and their base fare slashed by a whopping 58 percent. The minimum price for a ride decreased by about a t
hird.
Table 2 UberX Rates in New York City, 2014 to 2018
In addition to reducing rates, both services have also changed their commissions. When Lyft reduced rates in 2014, it “temporarily eliminated its 20% commission ‘to provide our growing driver community with peace of mind’ during the price drop.” In 2014, Uber temporarily decreased its commission from 20 percent to 5 percent, before returning it to 20 percent in April. Then in September 2014, Uber increased its uberX commission to 25 percent, up from 20 percent for new drivers in select markets, and quickly expanded to additional cities. However, the commission doesn’t include platform booking fees, which range from $1.40 to $2.15, or more, depending on market. The rate drops, commission hikes, and booking fees have led the Rideshare Guy website to point out that in some markets, on short trips that are charged a minimum fare, platforms take more than 40 percent of the price of ride.42
Adding insult to injury, in May 2017 the Wall Street Journal revealed that Uber had been mistakenly underpaying New York City drivers for more than two years by charging the platform’s 25 percent commission before deducting sales tax and Black Car Fund fees. The company planned to refund the overage, with interest, which it estimated would result in a payment of roughly nine hundred dollars per driver, although at least one driver expected to receive over seven thousand dollars.43
Uber has also experimented with paying some drivers on a tiered commission system. In 2015, in San Francisco and San Diego, Uber increased its commission to 30 percent. The program, described as a pilot, involved new drivers paying a 30 percent commission on their first twenty rides in a week, 25 percent on their next twenty rides, and then 20 percent on any rides beyond that; the San Diego version ran on tiers of fifteen rides. Uber’s commission for its premium products, like black cars and SUVs, ranges from 25 percent to 28 percent.
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