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On-Demand Labor: Who Does It and What Do They Want For Their Work?

by | Mar 8, 2016 | BIA, Blog, Conferences

Why do people opt for on-demand work? Does flexibility make up for the reported lower pay and uncertainty in scheduling? How will on-demand work be regulated, and at what level of government? At BIA/Kelsey NOW | Seattle, we looked closely at both the workers motivations and the regulatory environment on two panels. We bundled them here for your viewing convenience in a single blog posting, because the aspirations and expectations of workers are closely related to their feeling about government’s involvement in the on-demand market.

We invited three on-demand workers, an Uber driver, a TaskRabbit “tasker” and a Microsoft communications contractor to the stage to explore the growing world of non-employment based work.

Driver Don Creery, who has been featured in The New York Times as a member of Seattle’s App-Based Drivers Association, a group organizing with the Teamsters to launch a union for Uber and Lyft drivers, has been driving for several years. In his early sixties and single, he had been a guitar teacher for many years and abandoned the business after the Great Recession began. Uber has provided a living, one that has become less remunerative as the company lowered ride prices to gain market share in its battle with Lyft. For Creery, Uber is his full-time job and he has purchased a new vehicle to improve the customer experience he provides.

Task work, such as organizing garages and office projects, is one part of TaskRabbit worker Allen Wills’ complex assortment of jobs. He is also a photographer and is interested in building small businesses, dedicating 12 well-defined hours of time each week to TaskRabbit, when he is on-call. Wills, a Millennial, represents a decidedly urban approach to work, using a cowork space to meet with colleagues and moving between several different types of work during the week.

BIA/Kelsey associate Roman Ryan, who moderated the panel, also interviewed Kellini Walter, a former Microsoft employee who now works on a project basis as a speechwriter and communications professional for senior Microsoft executives. Her work hews more to the traditional office, but she seldom works in an office for very long, moving between several different projects each year with the technology giant and occasionally other companies. While her work looks more traditional, her ability to balance parenting with a steady income requires extensive planning and personal marketing to ensure that she reaches her annual financial goals.

Why do they do it? Flexibility is an important factor, as is the sense they are in control of their own destiny, but in the case of on-demand marketplaces, the panelists said that in many cases the company that operates the market can take much of that control away. Creery, for example, has seen his pay decline by 40 percent over the last year, which leads to the next session, about Seattle’s legislation allowing on-demand drivers to organize.

Normally, we wouldn’t bury the news-making panel in an article. However, the workers’ perspective sets the stage for what came next, a discussion about Seattle’s law allowing drivers to unionize.

Mike O’Brien of the Seattle City Council, Seattle University Professor of Law John (Jack) Kirkwood, and Dawn Gearhart, a Teamster organizer working to build the App-Based Drivers Association joined me on-stage immediately after the worker panel.

O’Brien’s comments were covered several times after NOW, and Uber’s General Manager for the Pacific Northwest region, Brooke Steger, a panelist on the Localizing Global Logistics panel has published a letter laying out principles for drivers’ decision to unionize in the weeks after the discussion below. Seattle’s law, which became effective in December 2016, is a subject of intense debate and, this past week the U.S. Chamber of Commerce sued the city over O’Brien’s bill.

As Geekwire put it in its coverage of the panel, “the second floor meeting space at Galvanize in Seattle felt like City Hall for a few minutes on Thursday afternoon.” A group of taxi drivers who object to the union came to the conference and joined the conversation after filing a formal complaint with BIA/Kelsey that they were unrepresented. The company they drive for, Hired By Q, has adopted Uber’s platform and their protest was echoed by Uber in a pre-conference call to the conference chairman, as well. We invited the lobbyist, Henry Yates, whose client, Abdul Yusuf, CEO of Q for Hire, filed the complaint to add his comments from the floor. Several attendees also added their questions for a very cordial but intense 50-minute session.

We will not attempt to summarize the statements made by all the participants. Rather, let’s briefly examine the state of the law and whether it is representative of how other cities and the federal government have responded to on-demand marketplaces, such as Uber, Lyft, TaskRabbit and others. Generally, legislators, including U.S. Senator Mark Warner (D. – Va.), who is the most prominent national advocate of employment law modification to protect on-demand or “gig” workers, believe the market should be minimally regulated and have sought to learn more about the business model. Meanwhile, California’s labor commissioner ruled in June 2015 that an Uber driver could claim the benefits of employment. By contrast, Seattle has taken a decidedly lighter hand.

O’Brien’s bill, which was not signed by Seattle Mayor Ed Murray but which became law anyway because it won a majority of the city council’s support, will provide drivers the opportunity to organize, otherwise it places no constraints on the companies that operate mobility-oriented marketplaces. O’Brien explained that the bill was written to minimize record-keeping overhead for drivers, among other criteria. He said he repeatedly attempted to engage Uber in dialogue with little success outside the council chambers.

However, as panelist John Kirkwood explained, the law creates a city agency that is not allowed to intervene in labor relations by either U.S. or Washington State law. In order to become legal, Seattle must have a bill passed by the Washington State Legislature providing an exemption under anti-trust law. This is not likely to happen, as the state’s senate is controlled by Republicans and is currently deadlocked on budget issues related to school funding — nothing much is moving in this state legislature.

In the meantime, as union organizer Dawn Gearhart explained, drivers will have the opportunity to vote whether they organize and the union, if approved, will not operate a closed shop. Non-union drivers can work for Uber and Lyft at whatever price they choose, which limits the efficacy of the union compared to the traditional leverage organized workers have in negotiating price. To a great extent, the union would be symbolic, providing drivers a forum for their views. And it is vociferously opposed by Q for Hire, which has reconstructed taxi dispatch services on Uber’s platform.

Seattle’s pro-union approach has had a salutary effect: The city’s Uber drivers have seen their pay decline less, as a percentage of revenue per mile, than in any other U.S. city. The law will certainly end up in court, perhaps at the Washington State or U.S. Supreme Courts.

What did we learn from the two sessions? On-demand workers generally like their jobs, but they see some decisions by the companies that facilitate the work as being more for the company’s benefits than theirs. Would-be regulators face a hard fight, as New York Mayor Bill DeBlasio learned when he confronted Uber. The company is dedicated to its growth, rightly so from the perspective of shareholders. But as with previous generations facing massive technological change, government seeks to engage and often control corporations.

We see a negotiation between the mobility companies and the cities they serve. How it will turn out is part of the story of the transition to local, on-demand labor we’ll continue to explore here and at future BIA/Kelsey NOW events.