In The Sharing Economy, Workers Find Both Freedom and Uncertainty - NYTimes PDF

8/18/2014 In the Sharing Economy, Workers Find Both Freedom and Uncertainty - NYTimes.
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TECHNOLOGY | NYT NOW
In the Sharing Economy, Workers Find Both
Freedom and Uncertainty
By NATASHA SINGER AUG. 16, 2014
Just after 4 a.m. on a recent Friday, while most of the neighbors in her
leafy Boston suburb were still asleep, Jennifer Guidry was in the
driveway of her rental apartment, her blond hair pulled back in a tidy
French braid, vacuuming the inside of her car. The early-bird routine is
a strategy that Ms. Guidry, a Navy veteran and former accountant, uses
to mitigate the uncertainty of working in whats known as the sharing
economy.
Ms. Guidry, 35, earns money by using her own car to ferry around
strangers for Uber, Lyft and Sidecar, ride services that let people
summon drivers on demand via apps. She also assembles furniture and
tends gardens for clients who find her on TaskRabbit, an online
marketplace for chores.
Her goal is to earn at least $25 an hour, on average. Raising three
children with her longtime partner, Jeffrey Bradbury, she depends on
the income to help cover her familys food and rent. That has become
more unpredictable of late. Uber and Lyft, her driving mainstays,
recently cut certain passenger fares. Last month, TaskRabbit
overhauled the way its users select their helpers; immediately after the
change, Ms. Guidrys stream of new clients dried up.
You dont know day to day, she said. Its very up in the air.
In the promising parlance of the sharing economy, whose sites and
apps connect people seeking services with sellers of those services, Ms.
Guidry is a microentrepreneur. That is, an independent contractor who
earns money by providing her skills, time or property to consumers in
8/18/2014 In the Sharing Economy, Workers Find Both Freedom and Uncertainty - NYTimes.com
search of a lift, a room to sleep in, a dry-cleaning pickup, a chef, an
organizer of closets.
For people seeking a sideline, these services can provide extra
income. Beyond the ride services, there are businesses like Airbnb, the
short-term-stay broker; task brokers like TaskRabbit and Fiverr; on-
demand delivery services like Postmates and Favor; and grocery-
shopping services like Instacart.
Someone on Sidecar doing the same commute they do on a daily
basis and picking up a rider, its really free money for the driver and
reduced cost for the rider, notes Nick Grossman, the general manager
for policy and outreach at Union Square Ventures, which is an investor
in Sidecar.
In a climate of continuing high unemployment, however, people
like Ms. Guidry are less microentrepreneurs than microearners. They
often work seven-day weeks, trying to assemble a living wage from a
series of one-off gigs. They have little recourse when the services for
which they are on call change their business models or pay rates. To
reduce the risks, many workers toggle among multiple services.
Having a diverse portfolio is the best protection, says Sara
Horowitz, the founder and executive director of Freelancers Union, an
advocacy organization. People are doing this in the midst of wage
stagnation and income inequality, and they have to do these things to
survive.
To try to insulate herself from the uncertainty, Ms. Guidry makes
herself available to drive most weekdays in the predawn darkness. At
that time, she figures, ride seekers are likely to be business travelers
headed to the airport, a profitable fare.
Around 4:30 a.m., Ms. Guidry ushered me upstairs to her home
office, careful not to wake her family sleeping down the hall. She pulled
up TaskRabbit on her laptop to check if any new offers had come in.
She scrolled through Craigslist, where she occasionally picks up work as
a private chef. Nothing doing.
She glanced at the sofa bed by her desk, musing aloud whether she
could rent it out on Airbnb. The thing is, I have kids, she said,
gesturing to a child-size desk on the other side of the room where her
son Aden, who is 5, does his schoolwork. So much for the couch-rental
idea.
Resigned, Ms. Guidry activated her Uber iPhone, a device that the
company issues to its drivers. On her personal Samsung Galaxy phone,
she activated the driver modes for her Lyft and Sidecar apps.
Moments later, the Uber phone pinged with a ride request. She
accepted immediately. But, ever in risk-mitigation mode, she waited
two minutes before leaving, lest the rider change his mind.
Theres nothing worse than driving all the way over to some place
and then having them cancel, she explained, heading down to the
driveway.
A little over an hour later, Ms. Guidry returned home, having
completed an airport drop-off. She had made $28, not accounting for
the cost of gas. She would do a second airport run, then come back to
wake her family and make breakfast.
The Precariat
Piecemeal labor is hardly a new phenomenon. But as expedited by
technology and packaged as apps, it has taken on a shinier veneer under
new rubrics: the sharing economy, the peer economy, the collaborative
economy, the gig economy.
Gigs hold out the prospect of self-management and variety, with
workers taking on diverse assignments of their choice and carving out
their own schedules. Rather than toiling at the behest of some faceless
corporation, they work for their peers.
Providers in the peer economy really value the independence and
flexibility; for lots of people, it has been transformational, says Shelby
Clark, the founder of RelayRides, a car-sharing marketplace, You meet
great, interesting people. You have great stories.
Certainly, its a good deal for consumers. Peer marketplaces
democratize luxury services by making amateur chauffeurs, chefs and
personal assistants available to perform occasional work once largely
dominated by full-time professionals. Venture capital firms seem
convinced.
Uber has raised more than $1.5 billion from investors; Lyft has
raised $333 million; and TaskRabbit, $38 million. Part of the attraction
for investors is that the companies can avoid huge employee payrolls by
effectively functioning as labor brokers.
If these marketplaces are gaining traction with workers, labor
economists say, it is because many people who cant find stable
employment feel compelled to take on ad hoc tasks. In July, 9.7 million
Americans were unemployed, and an additional 7.5 million were
working part-time jobs because they could not find full-time work,
according to estimates from the Bureau of Labor Statistics.
There are no definitive statistics on how many people work in the
gig economy. But according to a report from MBO Partners, a company
that provides consulting services to independent contractors, about 17.7
million Americans last year worked more than half time as independent
contributors, among them project workers.
With piecemeal gigs easier to obtain than long-term employment, a
new class of laborer, dependent on precarious work and wages, is
emerging. In place of the proletariat, Guy Standing, a labor
economist, calls them the precariat.
They may be able to paint someones shed this week, says Dr.
Standing, a professor of developmental studies at the University of
London. But they dont know what will happen next week.
He views peer marketplaces as part of a larger global phenomenon,
in which labor brokers encourage people to work on contingency
without basic employment benefits or protections. The companies
essentially channel one-off tasks to the fastest taker or lowest bidder, he
says, pitting workers against one another in a kind of labor elimination
match.
The flexible timetables of project work are a trade-off for regular
employment income and benefits. Retailers, restaurant chains and
other employers may require more rigid work schedules than piecemeal
gigs, or, worse, keep their workers guessing from week to week about
which hours they will work. But many of those employers also offer
workers benefits like disability pay or commuter discounts.
Uber, Lyft and TaskRabbit, for instance, do not regard the workers
who provide services to their users as employees. The companies say
they are simply arenas, like eBays for gigs. They require their service
providers to work as independent contractors and, as such, the workers
dont qualify for employee benefits like health insurance, payroll
deductions for Social Security or unemployment benefits.
Jamie Viggiano, senior director of marketing at TaskRabbit, says
the company is trying to improve the situation for its 30,000
contractors in 19 cities in the United States. It recently instituted a
sitewide minimum wage of $15 an hour. It also adopted a $1 million
insurance policy, covering both clients and contractors, for any
property damage or bodily harm that occurs while performing a job.
Still, Ms. Viggiano says that across the industry, we have only
scratched the surface of helping freelancers work in the gig economy.
One issue for contractors is that the companies can alter their
terms with impunity. Workers are often reluctant to challenge these
changes because the companies can drop them or deactivate them, in
industry lingo at any time.
Executives at Lyft say they are sensitive to the implications of price
changes for drivers. The company, which has more than 60,000 drivers,
recently decreased fares 30 percent in many cities as part of a price war
with Uber, its chief rival. To compensate drivers, Lyft temporarily
suspended charging them its 20 percent commission fee on fares.
We have an internal culture of putting drivers first, John
Zimmer, Lyfts president and co-founder, told me last Monday.
Later that same day, Lyft reinstituted its 20 percent commission,
but with an incentive for the most active drivers. It reduced its cut to 5
percent for those who work from 40 to 50 hours a week and suspended
the fee altogether for those who work more than 50 hours a week.
The sudden imposition of tiered commissions on drivers didnt sit
well with Ms. Guidry. Its a penalty for part-time drivers, she said.
By now, workers are accustomed to companies rapidly switching
edicts.
They can do whatever they want with pricing and compensation;
they can deactivate you as a driver whenever they want, said a man
who drives for three ride-sharing services in San Francisco and asked
that his name be withheld for fear of being blacklisted. Nobody has my
back.
Painter, Caterer, Dog Sitter
On Saturday morning, canvas tool bag in hand, Ms. Guidry drove
to a house a couple of miles from her apartment on a TaskRabbit
assignment.
The clients, a professional couple, were repeat customers. They had
previously hired Ms. Guidry to assemble a rolling wooden cart for their
young son, an energetic toddler, and to install child-resistant latches on
their kitchen cabinets. Now she was to childproof a chest that contained
their wedding china and crystal goblets.
For the past year, Ms. Guidry has devoted most weekends to such
gigs.
Its regular people who dont own a drill and have never hung
anything on drywall. It can be daunting for people, she said of the
chores. She feels invigorated by the variety of the work and the
applicability of her skills: Ive done everything from painting and
catering to dog sitting.
For about 30 minutes, she worked on the cabinet. Later, she
adjusted a child-safety gate at the top of a staircase. After that, she
hung a wind chime off the back porch.
For two hours of work, her take came to $50. Some of her
competitors on TaskRabbit do similar chores for $15 an hour.
I probably get fewer gigs than people who bid less, Ms. Guidry
acknowledged. But its a sustainable model for me.
Six years ago, she had a full-time job as the controller at a small
company. After she gave birth to her youngest son, her office asked her
to work extended hours. She couldnt both accommodate the company
and take care of her newborn. So she ended up leaving her job.
I started applying for part-time jobs, but those are very rare and
highly competitive, Ms. Guidry recalled. Midcareer, there is very little
available part time for stay-at-home moms.
Her partner, too, was out of work for a while, although he now has
a full-time job as a network administrator. At the time, she was also
coping with the aftereffects of a back and hip injury she had sustained
in 2000 when in training for the Navy. With reduced mobility, she
needed a cane to get around.
So Ms. Guidry, who has training in electronics, accounting and
cooking, began taking on projects in different fields. Peer marketplaces
have greatly improved her ability to find gigs that she can fit into her
child-care schedule. TaskRabbit has become one of her income
mainstays.
Until recently, TaskRabbit functioned as an auction site where
clients posted tasks and its rabbits bid for them. The system allowed
workers to communicate with potential clients in order to make more
accurate estimates for bids.
You could chitchat, find out more about the task and see if they
were flexible on time, says Erin Mata, a single mother in Austin, Tex.,
who has delivered flowers and designed birthday invitations for
TaskRabbit clients.
But last month, TaskRabbit overhauled its approach, replacing
open bidding with an algorithm to match a client with people who have
specific experience in the requested task and are within the clients
budget.
Ms. Viggiano, the TaskRabbit marketing executive, says the new
model makes it faster for consumers to find the right helpers and for
workers to secure gigs. The company now asks workers, rebranded as
taskers, to respond to offers within 30 minutes.
There was a lot of inefficiency, Ms. Viggiano says. There was a
lot of back-and-forth before the task was assigned.
After the redesign, some active taskers ended up receiving even
more offers. Under the new system, for instance, Ms. Guidrys stream of
new clients initially slowed to a trickle. But she expanded her range of
tasks on the site and ended up with a flood of new offers, often at a
higher rate of $35 an hour.
Ive been five times as busy, without having to hunt down jobs,
she told me.
Some others are seeing fewer work offers.
Although she has a regular office gig with a longstanding
TaskRabbit client, as of late July, Ms. Mata in Austin said she had not
received new offers. I guess it makes sense on the business end, but it
takes all the personal interaction out of it.
She said she was glad to have another gig to fall back on, with a
local delivery service called Favor.
Favors and Fees
Inherent in Favors name is the peer-economy rebranding of labor
as a kind of good-will effort toward others, rather than an old-
fashioned exchange of work for remuneration. Instead of one-off gigs,
however, Favor offers workers delivery shifts of several hours or more at
a time.
Consumers can use the Favor app to select items from local
restaurants or stores. Then, for a fee from $5 to $10, depending on the
cost of the order, the service sends a messenger to pick up and deliver it.
Favor runners earn tips plus a percentage of the fees. But the
company has tried to insert some predictability into the process by
allowing workers to schedule shifts a week ahead of time. Should their
tips fall short, Favor currently guarantees them a minimum wage of $9
an hour.
If they dont make that in tips, we will bump them up, says Zac
Maurais, the co-founder of Favor. So they dont have to worry that they
arent going to be fairly compensated.
The income floor appeals to Ms. Mata. In January, she was laid off
from a job as a manager of customer-service employees at General
Motors. She now works 20 to 40 hours a week for Favor, earning an
average of $15 an hour in tips and commissions. She signed up for
health insurance through the state health exchange.
One humid evening in Boston, I accompanied Kelsey Cruse, a Favor
messenger, as she picked up and delivered burritos from a Chipotle
outlet. Favor had just come to town, and Ms. Cruse, a student at the
University of Massachusetts, Boston, had been one of the first people
selected to make deliveries.
On average, youre going to make $7 per favor, Ms. Cruse
explained, using the companys euphemism for a delivery. If you are
running two favors in an hour, thats $14 an hour. Its pretty awesome.
She hadnt yet racked up enough favors to earn that much
consistently. So far that week, she had worked about 20 hours and
earned $179 the company minimum.
Many gigs may seem to offer decent pay. But they may not look that
great after factoring in the time spent, expenses, insurance costs and
taxes on self-employment earnings.
If you did the calculations, many of these people would be earning
less than minimum wage, says Dean Baker, an economist who is the
co-director of the Center for Economic and Policy Research in
Washington. You are getting people to self-exploit in ways we have
regulations in place to prevent.
What about the potential risk to Favor drivers or bike messengers if
they have an accident while making deliveries? Mr. Maurais, Favors co-
founder, says that the company itself has $1 million in insurance
coverage per incident; it requires delivery drivers, but not bike
messengers, to provide proof of vehicle insurance.
Good Gigs, or Wage Slavery?
After her TaskRabbit work on that Saturday morning, Ms. Guidry
spent time at a local farmers market, where she bought squash and
basil for a meal she was making on a private-chef gig. Later that
afternoon, she ferried passengers for a few hours. She spent an hour in
her home office, combing through discount websites like CouponMom
and printing out a stack of grocery coupons. She took them to the
supermarket to buy more ingredients for the client meals.
Around midnight, she returned to driver mode, taking Bostonians
to downtown clubs and local house parties. Others she drove home to
far-flung suburbs. Her self-assigned shift ran until around 5 a.m.
Combining all this stuff together, I dont know that it adds up to a
career, Ms. Guidry ruminated. But it definitely makes things easier.
Technology has made online marketplaces possible, creating new
opportunities to monetize labor and goods. But some economists say
the short-term gig services may erode work compensation in the long
term. Mr. Baker, of the Center for Economic and Policy Research,
argues that online labor marketplaces are able to drive down costs for
consumers by having it both ways: behaving as de facto employers
without shouldering the actual cost burdens or liabilities of employing
workers.
In a weak labor market, theres not much of a floor on what
employers, or quasi employers, can get away with, Mr. Baker contends.
It could be a big downward pressure on wages. Its a bad story.
Labor activists say gig enterprises may also end up disempowering
workers, degrading their access to fair employment conditions.
These are not jobs, jobs that have any future, jobs that have the
possibility of upgrading; this is contingent, arbitrary work, says
Stanley Aronowitz, director of the Center for the Study of Culture,
Technology and Work at the Graduate Center of the City University of
New York. It might as well be called wage slavery in which all the cards
are held, mediated by technology, by the employer, whether it is the
intermediary company or the customer.
(Disclosure: For two weeks in the summer of 1988, I had a gig as
the au pair for Professor Aronowitzs daughter, then a toddler.)
Peer-economy experts and executives recognize that many gig
workers are laboring largely without a safety net. Mr. Clark, the
industry veteran who founded RelayRides, reels off a list of lacunas:
health insurance, retirement saving plans, tax withholding and even the
kind of camaraderie and mentoring that can be available in full-time
office jobs.
Looking at this as a new paradigm of employment, which I think it
is, the question is, What are you giving up? Mr. Clark says. At the end
of the day, theres a metalayer of support services that is missing.
He predicts that new businesses will soon arise to cater to the needs
of project workers: There are opportunities to focus on providers,
finding ways to make it easier, more stable and less scary to earn in the
peer economy.
TaskRabbit has started offering its contractors access to
discounted health insurance and accounting services. Lyft has formed a
partnership with Freelancers Union, making its drivers eligible for the
advocacy groups health plan and other benefit programs.
That may not be enough. Dr. Standing, the labor economist, says
workers need formal protections to address the power asymmetries
inherent in contingent work. International rules, he says, could endow
gig workers with basic entitlements like the right to organize and the
right to due process should companies seek to remove them from their
platforms.
There should be codes of good practice at an international level
that all companies should be required to sign, he said.
As for Ms. Guidry, she had joint implant surgery a few months ago
to address the back and hip injury she sustained in Navy training. For
the first time in years, she can stand and walk at length without chronic
pain. Now she is trying to decide whether to continue patching together
an income from multiple gigs, or to start looking for more formal
employment.
I like my freedom fixing someones cabinet, driving, pulling up
weeds, cooking, she told me as we sat in her dining room on Monday
morning, recapping her weekend of work. I would not like to do any of
those things as a full-time job.
Yet she recognizes that her current routine may not be sustainable.
Between 10 a.m. on Saturday and 5 a.m. on Sunday, she had earned
about $263. But that had required working marathon hours and
running a sleep deficit.
It was a good day I would say, all in all, but a long day, Ms.
Guidry acknowledged. I cant do many of those.
A version of this article appears in print on August 17, 2014, on page BU1 of the New York
edition with the headline: Check App. Accept Job. Repeat..
2014 The New York Times Company

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