As Forbes writer Ellen Huet explained, an increase in rates could be used to increase company coffers: “Uber’s CFO Brent Callinicos apparently said that the company saw raising commissions as a valid way to earn more and bolster its valuation, said Fortress Investment Group president Michael Novogratz in a panel on Sunday. He said that Callinicos had described this dynamic to him when Uber was raising money this winter. When Novogratz asked Callinicos why Uber would risk upsetting drivers by raising rates 5%, he said Callinicos didn’t hesitate and said, ‘Because we can.’”44 As reported in The Guardian, while some have raised questions about Uber’s future, given worker discontent, the Uber chief product officer, Jeff Holden, reportedly explained, “We’re just going to replace them all with robots.”45
Generally, pay cuts are used when a company is struggling to stay afloat; or in the case of a pay cut for just one person or portion of the workforce, it’s an effort to convince someone to quit. But many of these sharing economy services are fairly well funded. According to Crunchbase, a crowd-sourced database to track start-ups, TaskRabbit had, by August 2015, received $37.68 million in six rounds of investments from thirteen investors, before being bought by Ikea in 2017. In August 2017, the New York Times reported that Uber had a valuation of more than $68 billion; and by February 2018, the platform had received $21.1 billion in twenty-one rounds from ninety-three investors.46
Outside of the sharing economy, many companies, rather than suddenly reducing pay, rely on layoffs, which is hardly an improvement. But for gig economy workers who have been told that they can determine their own pay, a sudden pay cut—especially when it’s marketed as being for their own good—can feel like the proverbial slap in the face.
For instance, when Uber dropped uberX rates in New York City by 15 percent in January 2016, the company issued a statement on its website explaining that the price cut had made Uber more affordable for passengers in the five boroughs: “Drivers will feel the benefits of lower prices too—because when demand increases there’s less idle time between trips, and that means more time with a rider in the car. . . . This means higher hourly earnings for drivers. For example when we cut prices in July 2014, the average idle time fell by 42% and average hourly partner earnings increased by 33%.”47
Drivers were split on the rate changes for Uber. For instance, Gerald, a fifty-nine-year-old African American man who began driving for Uber in 2012, saw an immediate drop in his income: “When they reduced that fare back in July by 20 percent—and this is the thing I’m getting with clients as well, ‘Oh, the fare has improved, the tip is included.’ I say, ’No, it’s not, not anymore.’ If you do the math, when they reduced the fare back in July by 20 percent, where do you think that 20 percent came from? Out of their pocket?”
An additional income cut may have resulted from the public perception that the tip was included. CNET reporter Dara Kerr suggests that the confusion comes from Uber’s app registration process. When passengers set up a new Uber account, they’re asked what percentage of “gratuity for Taxi” they’d like to include with every ride. The drop-down menu includes options ranging from nothing up to 30 percent. “Many people likely believe this choice applies to all rides they take with Uber, but a reading of the fine print says it’s only for the company’s UberTaxi service. . . . [S]ervice is only available in a few cities, like New York and San Francisco.”48
The idea that Uber is taking money out of the pockets of drivers was also repeated in an explosive exchange, captured on video in 2017, between Uber’s then CEO Travis Kalanick and his UberBLACK driver, Fawzi Kamel. In the video, Kamel confronts Kalanick, noting, “You’re raising the standards, and you’re dropping the prices. . . . I lost ninety-seven thousand dollars because of you. I’m bankrupt because of you. Yes, yes, yes. You keep changing every day. You keep changing every day.”
In the video, Kalanick argues that rates were not dropped on UberBLACK, but on services such as uberX as a way to compete with Lyft, before going on to lose his temper and blame the driver for his own financial woes: “Some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!”
Bloomberg notes that in San Francisco between 2012 and 2017, the per-mile rate for UberBLACK (the premium version of Uber) dropped by 23.5 percent, and the per-minute rate was cut by 48 percent. Drivers such as Kamel, who had purchased expensive luxury cars, banking on the higher rates, found themselves being paid less even as they faced more competition from other drivers.49
For some, it’s not the fare decrease that has caused them financial problems—it’s the policy changes or policies that were not clearly communicated up front. Bryan, a forty-three-year-old married father of four and a former handyman and welder, started driving for Uber in New Jersey thinking that it would serve as a flexible second job and a way to make additional money. When he lost his full-time job, he moved his registration to New York so that he could drive in the city and make more money. He hoped that driving for UberBLACK and another luxury car service would eventually land him a job doing something else; he doesn’t expect to keep driving for Uber.
When we spoke, Bryan was receiving emails from Uber advising that he needed to accept more jobs or risk being deactivated. Even though he has a luxury SUV and should be able to command the higher UberBLACK rates, Uber also wants him to take the cut-rate uberX jobs.
I didn’t know that you would have to take uberX jobs, so I didn’t think if you sign up with them, and if you refuse a certain amount of jobs, they could end their relationship with you. . . . They are so greedy. You know if you book a flight in American Airlines and you get upgraded to first class, the airline is paying for that. If you send an UberBLACK to do an uberX job because there is no other car around, and you want to do the same prices, the driver is paying for that.
Bryan thought he was going to be free to make decisions about who he would pick up, like a true “driver-partner” (what Uber calls its drivers). “But then it’s like, if you don’t like it, too bad, you can leave.” he said. “You can’t tell people that after they have made that investment.”
Likewise, the TaskRabbit service pivot in 2014, when the company switched from operating as a bidding marketplace to functioning as more of a temp agency, similarly caused problems for Taskers. Sarah, twenty-nine, the Tasker profiled in the opening chapter, explained, “There were people complaining and in tears because they were like, ‘I don’t have any income now. I was your top TaskRabbit and you are treating me like shit,’ and [it] kind of felt like a betrayal.”
The pivot also introduced strict requirements in terms of response rates and task acceptance. “You know,” said Sarah, “they have these performance metrics, which is not a very good way to measure. You have to accept 85 percent of what’s given to you. The way that the metrics work is a thirty-day kind of thing, so sometimes it just doesn’t add up—and you don’t know what you are going to get or when you are going to get it.” As a result, Taskers who don’t accept several tasks within a relatively short period may find themselves flagged. Sarah explains, “They pause your account, and you have to take some kind of test to say, ‘Yeah, I understand the guidelines,’ And they kind of talk to you like you are an eighteen-year-old. It’s kind of insulting. And they say if this keeps happening then you can be taken off.”
The pivot wasn’t the only change. In the summer of 2015, TaskRabbit increased its service fee to 30 percent, from 20 percent, and tacked on an additional 5 percent trust-and-safety fee to be paid by the consumer. Taskers were told that the rate change was intended to incentivize them to grow their business and focus on promoting themselves more. But some suggested that the rate increase was TaskRabbit’s response to people trying to go off the platform. Natasha, twenty-eight, put it this way:
It’s pretty awful. The funny thing is that was exactly at the point when I was trying to be good and diligent about staying within the app. And then they raised the rate, which I think: why no
t just do 25 percent and gradually raise it? But to just jump to 30 percent for [an] incentive to keep people coming back, that’s a terrible idea, because almost all of my tasks are people who are first-time clients of mine. It’s very rare that people rebook. And if they do rebook . . . For me it’s difficult because consistency in my schedule is not really there. I mean, I usually schedule myself whenever I feel like working, and so if someone wants someone every third Sunday, I’m not going to be available every single month, every third Sunday. I travel. I do other things. So I lost my job. I lose my opportunity for 15 percent, which is stupid because 15 percent is still my money.
As with many TaskRabbit changes, the new pay structure was communicated to workers through email, but a few highly productive Taskers received personal phone calls. That didn’t make the news any easier. Richard, fifty, a former finance professional, was one of the few Taskers to get such a call. Flattered that they considered him to be one of their top Taskers, he listened to the representative’s “dog and pony show” explanation for the increased commission rate.
I said, “I’m professional.” I listened first. [They said,] “Advertising: you’re going to see it’s going to help you in the community. But your repeat clients’ rate is only 15 percent. Did you know that?” I let them finish. Then I said, “Look I’ve been doing this three months, I can guess-timate that my repeat business is probably around 3 or 4 percent. It doesn’t equate. . . .” I said, “You can do what you want because it’s a company, but you asked me how I feel so I’m telling you. You just gave yourself a 50 percent increase.” She said, “Fifty percent?” I said, “Yes.” She should have done the math already. If you’re going from 20 percent to 30 percent, you’re giving yourself a 50 percent increase.
And I’m pretty good with math, so I was sure of that. So I explained. . . . I said, “If I earned a hundred dollars, I was making eighty dollars; now I’m making seventy dollars. And I’m one of your best, and you’re telling me this. So now let’s pretend this is not virtual, and you’re coming to the office. And you’ve got a hundred Taskers sitting at desks, and you will say, ‘Richard, I’m sorry but we’re cutting your pay. You’re our best, but we’re cutting you.’” I said, “It doesn’t make me happy.” I said, “You want to know; that’s how I feel.”
Why not just leave? In Richard’s example above, a worker who suddenly has his pay cut might think that the boss was trying to force him to quit. In some cases, workers stay with the sharing economy because of a lack of employment alternatives, whether attributable to the stigma of long-term unemployment, middle age, a lack of experience, or the need for a flexible work schedule. In other cases, workers have invested a good deal of time, effort, or resources (ranging from an Uber-approved car to extra sheets for an Airbnb rental) that increase the opportunity cost of starting over. Finally, in many jobs, even if people aren’t getting regular raises—or if, owing to inflation, they’re actually making less each year—most people don’t quit. Why would gig economy workers be any different?
A second issue previously addressed by early labor reformers is the issue of work hours. Although the sharing economy markets itself to workers as offering a chance to set their own hours, the reality is often much more nuanced. Uber drivers can set their own schedules—but the monthly income guarantees generally require that they accept a certain percentage of rides (90 percent), and often, that they drive during certain hours or for a certain number of hours per week. As of April 2016, Uber’s six-thousand-dollar-a-month guarantee in New York City applied only to a driver’s first month, and, according to the website, it further required that the driver do the following:
• Be online for at least 50 hours, 15 hours of the 50 hours falling within the peak hours [Monday–Friday 6 a.m.–9 a.m., 9 p.m.–12 a.m.; Saturday 12 a.m.–1 a.m., 10 p.m.–12 a.m.; Sunday 12 a.m.–3 a.m., 10 a.m.–3 p.m.]
• Complete at least 1.3 trips per hour
• Accept at least 90% of trip requests dispatched, including uberPOOL requests
With those requirements, driving begins to seem less independent and more like a regular job, but one without any of the usual protections or perks—especially since the guaranteed income is only for the first month. By January 2018, even the monthly guarantee was gone, replaced by an eight-hundred-dollar credit toward vehicle expenses for new drivers. For other sharing economy workers, there’s less focus on working a specific number of hours, but workers are often expected to be on call. Freelance chefs working with Kitchensurfing have just twenty-four hours to respond to potential work. Airbnb hosts have more time, but those who don’t respond quickly enough can find their accounts temporarily deactivated.
Gabriele, twenty-seven, rents out her apartment when she and her son go out of town for a weekend. Originally, she left her listing up all the time, but her low-cost rental was popular and she received an influx of emails that she described as “really, really annoying.” She said, “Sometimes I can’t make it to answer in time, and then Airbnb blocks my access. They do it if you don’t answer within, I think, one or two days. They have this specific—I think it’s even hours, forty hours or something, then they block. People can’t see your apartment anymore. . . . Until you go in and unblock and answer all the emails.” As a result, Gabriele opens her listing only when she plans to go out of town or when she really needs the money.
For TaskRabbit, the response requirements are even more arduous. As noted previously, the 2015 policy changes included a requirement for a thirty-minute response time. As TaskRabbit’s website explains it, “Taskers are available to respond to task assignments between 8 a.m.–8 p.m. local time.” The same page is quick to note that Taskers can “go off duty at any time.” But there are consequences: “By doing this, they are not available for direct hire on the platform and will not show in search results.”
For Taskers who are known entities, former clients can reach out to them directly to request work. But for most Taskers, showing up in the algorithm research results is key to getting work. At the same time, workers who don’t respond to a request within thirty minutes lose that specific task invitation and may fall below TaskRabbit’s 85 percent task-acceptance requirement, risking deactivation. Christina, thirty, explained,
[My percentages] were pretty high, but then there was one task—you were supposed to accept the task within thirty minutes. So there was one task that I saw, and I still had time to respond, but then, all of a sudden, that task was no longer available to me. I don’t know why that happened. So, [TaskRabbit] took that and said that I had not accepted one task. I called them, trying to explain to them what happened, and they’re really bad. Like, they barely listened: they did not try to understand what I was trying to say. They were like, “Well, we see that it took you more than thirty minutes to respond.” I was like, “Okay, but I was on my phone, and I saw how much time went by, so that’s not true.” And they were like, “Oh, okay, we’ll just send you a form that you can fill out, and then someone will get back to you.” So I filled out the form explaining what happened. Nobody got back to me. And the percentage still looks bad because of that one task. . . . And it’s ridiculous, ’cause I think half an hour is not enough time for anybody. Because if you work, you might be at lunch, or you might be in a meeting, or you might be underground. I don’t understand why it’s only thirty minutes.
Just like the Airbnb host Gabriele, Christina has decided to temporarily remove herself from the platform until she needs it for work: “I also haven’t made myself available, ’cause I’ve been busy with other things on the weekends and evenings the past couple weeks. After that happened, that one task happened, I just changed my availability for the past few weeks, ’cause I didn’t want that to happen again.”
The response requirement applies even when workers are occupied with an active task or traveling on the subway, where there is often limited cell phone reception. This puts workers in a difficult situation. They can either be on call for as many as eighty-four hours a
week (8 a.m. to 8 p.m., seven days a week) or not get any work. Although sending a quick text message or email response to a work request is something that white-collar workers do regularly, even the strictest of bosses generally allows at least an hour for a reply, and taking a few hours to respond is unlikely to cost someone her job. Numerous Taskers mentioned that the thirty-minute deadline adds an increased level of stress. Donald, fifty, said, “[It’s] nerve-wracking at times, because you can’t always constantly be thinking about TaskRabbit. You know, thirty minutes, I think, is a decent amount of time, because usually, I almost always have my cell phone on. But say I’m cleaning the bathroom in my apartment. I may not realize that thirty minutes have gone by. You can make yourself unavailable, but [then] you’re not getting any business. So it’s sort of a double-edged sword.” Likewise, Jasmine, twenty-three, observed, “I think it’s silly. I think it’s unnecessary. Because sometimes I’m like, ‘Do I want to do this?’ Or sometimes I just don’t see it on my phone. It’s like they assume everybody’s glued to their phone, or if your schedule says you’re available, that you need to respond immediately.”
A white-collar worker facing the need to respond to emails promptly is generally paid a higher salary to compensate for such time infringement. TaskRabbits have to put in unpaid time if they want to be paid at all. Eighty-four hours a week of being mentally “on call” is more than double the standard work week, and there is no overtime pay. Michael, forty-nine, explained,
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