Gig economy grows, but not gig worker salaries

By John Leahy | UConn Jour­nal­ism
Dec. 9, 2022 

In May of 2020, Thomas Taber real­ized he was run­ning out of mon­ey.  The 20-year-old Uni­ver­si­ty of Con­necti­cut stu­dent was liv­ing at home due to the COVID-19 pan­dem­ic, and was order­ing food con­sis­tent­ly through online plat­forms like Door­Dash and Uber Eats. Though the coun­try was essen­tial­ly shut down, he need­ed a job, and he knew exact­ly where to get one. 

I was order­ing all this food through Uber Eats, and I real­ized that they prob­a­bly need­ed dri­vers because of Covid,” he said. “So I down­loaded the app and start­ed doing deliveries.” 

Taber con­tin­ued dri­ving through­out the sum­mer of 2020, but encoun­tered issues along the way, includ­ing finan­cial­ly. Though busi­ness was through the roof, it wasn’t reflect­ed in his pay. 

Restau­rants were basi­cal­ly closed down, and so many peo­ple were order­ing out on Uber Eats. I worked a lot, and I made a decent amount of mon­ey, but after gas expens­es, I real­ized I wasn’t even mak­ing min­i­mum wage.” 

Taber’s sto­ry is just one of mil­lions of sim­i­lar accounts from across the coun­try. In the dig­i­tal age, inde­pen­dent work has explod­ed in the Unit­ed States, with a 2021 report by Pew Research find­ing that 16% of Amer­i­cans have earned mon­ey through an online con­tract­ing plat­form like Uber or Door­Dash. This group of 51 mil­lion Amer­i­cans make up the gig econ­o­my, which encom­pass­es all work­ers who work for short-term con­tracts or as free­lancers, rather than for a cus­tom­ary long-term employer. 

Over the past few years, the gig econ­o­my has come under scruti­ny from work­ers and activists alike who hope to achieve greater priv­i­leges for inde­pen­dent labor­ers. This is espe­cial­ly true in Con­necti­cut, and the state has become a nation­al hotspot with the poten­tial to cre­ate a blue­print for the future of inde­pen­dent labor. 

In the wake of the pan­dem­ic, the gig econ­o­my has boomed nation­wide. Between 2020 and 2021, the num­ber of inde­pen­dent work­ers rose by 34%, accord­ing to a report by MBO Part­ners, a firm which con­nects inde­pen­dent con­trac­tors and free­lancers to tra­di­tion­al employ­ers. This increase was because work­ers are look­ing for increased flex­i­bil­i­ty in a chang­ing job market. 

Work­er flex­i­bil­i­ty is among the most appeal­ing aspects of gig work, and gig-econ­o­my growth is pos­si­ble in part because many tra­di­tion­al jobs can­not offer the flex­i­ble hours and loca­tion that a gig econ­o­my job typ­i­cal­ly offers,” said the Bet­ter Cities Project in a 2021 report. 

Addi­tion­al­ly, the sta­tis­tics sur­round­ing the gig econ­o­my sug­gest it may con­tin­ue to expand as time goes along. Accord­ing to the Bet­ter Cities Project report, 56% of all gig work­ers belong to Gen Z, and almost 78% of all gig work­ers “said they expect[ed] to per­form as much or more gig work” in the fol­low­ing year. 

The gig economy’s pop­u­lar­i­ty extends to Con­necti­cut. Accord­ing to the same report from the Bet­ter Cities Project, Con­necti­cut has three cities in the list of the top 100 of Amer­i­can met­ro­pol­i­tan areas with the most inde­pen­dent work­ers. In the Bridge­port-Stam­ford-Nor­walk region, 10.4% of all work­ers are involved in a non­em­ploy­er arrange­ment, mak­ing it the fourth-most pop­u­lar area in the coun­try for gig work. 

How­ev­er, many of these Con­necti­cut work­ers are unhap­py in their posi­tions, and the explo­sion of the gig econ­o­my has cre­at­ed ques­tions for both work­ers and lawmakers. 

In Sep­tem­ber, a group of rideshare dri­vers from the non­prof­it orga­ni­za­tion Con­necti­cut Dri­vers Unit­ed staged a protest at New Haven City Hall. The group demand­ed bet­ter pro­tec­tions for inde­pen­dent work­ers, hold­ing a ban­ner that read, “Fares are up. Pay is down. Why?” 

The pur­pose of the protest was to push for bet­ter wages for rideshare work­ers in Con­necti­cut, as well as ben­e­fits such as paid sick time and pro­tec­tion against vehi­cle dam­ages, accord­ing to cov­er­age from the New Haven Reg­is­ter.  

Con­necti­cut dri­vers are suf­fer­ing. We all use Uber, and it’s very con­ve­nient for all of us, but the dri­vers are the ones that pay the con­se­quences. The dri­vers need a sol­id base so we can con­tin­ue to do our work,” Car­los Gomez, the founder of Con­necti­cut Dri­vers Unit­ed, told the Register. 

Some Con­necti­cut law­mak­ers agree. House Rep­re­sen­ta­tive David Michel of Fair­field County’s 146th Dis­trict co-spon­sored a bill in 2021 that would have allowed gig work­ers to cre­ate a union and par­tic­i­pate in bar­gain­ing with their employ­ers. Michel said there is a clear need for increased pro­tec­tions for inde­pen­dent work­ers in Connecticut. 

It’s clear that there’s a need for bet­ter wages. The com­pa­nies are tak­ing so much mon­ey out of the fare. It’s clear that there is some need for med­ical cov­er­age. There’s a lot of things that need to be estab­lished,” Michel said in a Zoom interview. 

The bill, titled Sen­ate Bill 1000, was nev­er put up to a vote. Michel said the rea­son the bill failed was due to dis­agree­ments between the gig work­ers themselves. 

The largest issue in the dis­cus­sions was the con­cept of employ­ee clas­si­fi­ca­tion for gig work­ers. In their cur­rent state, gig work­ers are clas­si­fied as self-employed under the fed­er­al and state umbrel­las, mean­ing they are not enti­tled to the same ben­e­fits as tra­di­tion­al employ­ees, and their employ­ers are not required to pay employ­ment tax­es. Accord­ing to Michel, it has been dif­fi­cult for gig work­ers to agree on their clas­si­fi­ca­tion, as some would like to become employ­ees while oth­ers hope to remain inde­pen­dent contractors. 

SB-1000 did not go so far as to clas­si­fy gig work­ers as employ­ees. Even so, com­pa­nies like Lyft and Door­Dash spoke out against employ­ee clas­si­fi­ca­tion in their writ­ten tes­ti­mo­ny to the Joint Com­mit­tee on Labor and Pub­lic Employ­ees in March 2021. 

Apply­ing a labor prac­tice intend­ed for the indus­tri­al econ­o­my to a shar­ing econ­o­my mod­el is prob­lem­at­ic and could cre­ate a sys­tem that reduces the flex­i­bil­i­ty and con­trol that dri­vers cur­rent­ly enjoy,” Rich Pow­er, the Senior Pub­lic Pol­i­cy Man­ag­er at Lyft, wrote in his testimony. 

Michel said that the com­pa­nies’ fix­a­tion on employ­ee sta­tus was a sign that they are unwill­ing to col­lab­o­rate with gig work­ers to achieve oth­er ben­e­fits, such as med­ical cov­er­age or over­time pay. 

This is a sign of them con­tin­u­ing to dis­miss the needs of the work­ers,” he said. “They are talk­ing about one thing, they are not talk­ing about all of the oth­er things that the work­ers are bring­ing to the table.” 

How­ev­er, the com­pa­nies’ argu­ments have eco­nom­ic mer­it, as an employ­ee clas­si­fi­ca­tion could mas­sive­ly restrict the job mar­ket in the gig econ­o­my due to increased costs for employ­ers like Uber. Robert Lan­glois, a pro­fes­sor of eco­nom­ics at the Uni­ver­si­ty of Con­necti­cut, said that employ­ee clas­si­fi­ca­tion could actu­al­ly be harm­ful to the work­ers themselves. 

If you’re going to make [gig work­ers] employ­ees, you’re going to incur huge costs because you’re going to take this sys­tem and you are going to break it. The com­pa­nies will have to pay $3,600 each year for gig employ­ees, hir­ing few­er work­ers. Prices will go up, not all dri­vers will still be employed, and con­sumers will have less access to the ser­vices,” Lan­glois said in a Zoom interview. 

Lan­glois said that if gig work­ers were to achieve employ­ee sta­tus in Con­necti­cut, it would hurt the work­ers more than the companies. 

The mon­ey will come out of the pock­ets of con­sumers and gig work­ers who are unem­ployed, not real­ly the rich­est – they’ll still make their mon­ey. These kinds of well-inten­tioned laws can freeze us.” 

Michel said that he felt progress had been made and he believes there is sup­port among law­mak­ers to take action. He is cur­rent­ly wait­ing for the dri­vers to come to an agree­ment, com­ment­ing that if the work­ers decide to push for employ­ment sta­tus, he will sup­port them. 

I want to sup­port what the con­sen­sus will say. It’s not up to me, I am there to serve. If I am going to push for a cer­tain ver­sion of the bill, I want to make sure the gig work­ers are in favor of it, all of them.” 

While gig work­ers con­tin­ue to debate the full pic­ture of what they want, Michel believes the real­i­ty of the sit­u­a­tion is quite simple. 

In the end, every­body wants the same thing – a more fair pay and some cov­er­age, some security.” 

Whether they will get those things remains to be seen. 

John Leahy is a senior at the Uni­ver­si­ty of Con­necti­cut major­ing in jour­nal­ism and finance. He report­ed this sto­ry for UConn Jour­nal­is­m’s Fall 2022 Pub­lic Affairs report­ing course. 

TOP PHOTO: The explo­sion of the gig econ­o­my, includ­ing Uber Eats food deliv­ery, has cre­at­ed ques­tions for both work­ers and law­mak­ers. (AP Photo/Lynne Slad­ky, File)