Labor groups take aim at the on-demand sweatshop

By Seth Sandronsky

Takele Gobena of Seattle, Washington, who drives full time for Uber and part time for Lyft, says he gets the short end of the stick. “I earned $2.64 after all expenses in 2014,” he said. His last full-time job as a dispatcher at Seattle Tacoma Airport paid $9.47 an hour.

Drivers such as Gobena must provide, fuel and maintain their own cars: “I worked 15 hours a day while driving customers 37,000 miles in 2014,” he said.   

On-Demand driver Takele Gobena works 15 hours a day to make ends meet. Photo credit: Takele Gobena

On-Demand driver Takele Gobena works 15 hours a day to make ends meet. Photo credit: Takele Gobena

Like freelance journalists and other independent contractors, Gobena is bearing more costs and reaping fewer benefits. But a group of progressive lawyers and activists argue that a policy roadmap – and labor organizing -- can start to reverse this trend. 

“Businesses in the on-demand economy should not get a free pass on making contributions to existing social insurance programs such as Social Security, Medicare, workers’ compensation, and unemployment insurance, on their workers’ behalf,” write the authors of new report by the National Employment Law Project. 

The U.S. social safety net, created during the 1930s under FDR’s New Deal labor coalition, should be available to all workers, they say. One example is the Fair Labor Standards Act of 1938, which sets minimum wage, overtime pay, record keeping, and youth hiring standards for employment subject to its provisions. 

“And the social insurance programs now being developed, such as earned leave and supplemental retirement savings, should extend to on-demand workers,” write Rebecca Smith, the Law Project’s deputy director, and Sarah Leberstein, a senior staff attorney. Meanwhile, retirement security is weakening among the American working class. 

The authors call for portable, state-managed retirement plans, accessible to all workers in the on-demand economy. California is experimenting with this policy.

The Law Project’s “policy roadmap” for workplace reform requires legislation that would make it easier for on-demand workers to organize into labor unions and bargain collectively with company owners instead of standing on their own.

Just ask shuttle-bus drivers in the Bay Area who work for Compass Transportation. They are organizing with Teamsters Local 853 for higher pay and stronger benefits. So are taxi drivers in San Francisco. Facing cutthroat price competition from Uber and Lyft, they have launched the SF Taxi Drivers Alliance 13 months ago, and joined the AFL-CIO.

Policies that have weakened bargaining power among typical workers, the bottom 80 percent of the U.S. labor force, account for worsening income inequality, according to a Sept. 2 report by Josh Bivens and Lawrence Mishel of the Economic Policy Institute in Washington, DC. 

The end of the Great Recession did not mark the end, or even the beginning of the end, of U.S. income inequality. “The top 1 percent of families captured 58 percent of total real income growth per family from 2009 to 2014, with the bottom 99 percent of families reaping only 42 percent,” writes Emmanuel Saez, a UC Berkeley economist

Echoing the Law Project’s report, the new initiative by the policy institute, “Raising America’s Pay,” calls for increasing the bargaining power of typical workers by updating overtime rules and strengthening collective bargaining rights. 

Efforts to advance policy options for workers in the on-demand economy are moving from the margins to the center, with the 2016 presidential campaign a case in point. Follow this link to read the National Employment Law Project report, “Rights on Demand: Ensuring Workplace Standards and Worker Security in the On-Demand Economy.” 

Seth Sandronsky is a journalist and member of the Pacific Media Workers Guild. Email: