By Cherri Senders
The gig economy is killing the American middle class.
The benefits of Uber, Lyft and other app-based companies were sold as a win-win for consumers and workers alike. Need a cheap ride somewhere? Uber can take you from here to there with a click of an app, and for less than the cost of a taxi. And if you needed to make some money, you could earn extra scratch with your “side hustle” by driving for the company.
What the hucksters didn’t mention and what the general public still doesn’t understand or refuses to acknowledge is that the math doesn’t add up for working people. An Uber ride is so cheap because its drivers make peanuts. All the while, Uber and others have grown into giants of their industry worth billions of dollars.
The imbalance between the drivers and the app providers is stark. The average Uber driver earns an estimated $9.22 an hour in Los Angeles, after factoring in expenses. In Dallas, it’s $9.16. Lyft numbers are comparable, with its drivers averaging $8.92 an hour in Chicago. Of course, most if not all the responsibility and risks of the gig economy falls on the backs of the workers. In the case of Uber and Lyft, the workers have to cover the cost of the vehicle, gas, automobile insurance, vehicle maintenance, health insurance, retirement plans and having to deal with unruly customers. If the driver is ill or the car won’t start, none of that responsibility is held by the company. It falls squarely on the worker.
This is no way to operate a sustainable economy that provides opportunity for all. While those living in the gig economy struggle to make ends meet with paltry wages, no benefits and poor working conditions, companies like Uber continue to grow in wealth and influence. Last year, the company had a valuation of $68.5 billion, according to the New York Times, though that number has taken a hit in recent weeks.
To counterbalance the greed of a corporation with the needs of its workforce, Uber drivers and other purveyors of the gig economy deserve a voice on the job. There have been efforts underway around the country in recent years to do just that, most recently in Seattle, as well as in New York and San Francisco. It’s an uphill battle, as Uber and their ilk hold steadfast that their drivers are not employees but independent contractors. While that may be technically correct, what is even a greater truth is that the entire business model is based on the exploitation of these low wage-earning drivers.
These drivers are not just Millennials filling in their free time between meals of avocado toast while they figure out what they want to do with their lives. These are not just starving actors looking to make rent in between auditions. No, ridesharing drivers include working adults who can’t make ends meet amidst out-of-control housing costs, and seniors who would like to retire but simply can’t afford to.
That the gig economy has adopted such a moniker is a bit of a misnomer. The colloquial meaning of gig implies a single professional engagement of short duration. Not a full-time job or a career. The historical definition of “gig” offers a touch of irony. It used to mean a small two-wheeled carriage pulled by a horse. As for Uber and its drivers, you can guess who’s riding in the carriage and who is the horse.
A voice on the job via collective bargaining are the only ways to guarantee that a workforce is treated fairly and a democracy’s middle class remains relevant. Uber’s immense wealth countered with the poverty wages of its drivers is indicative of a widening wealth gap between the haves and have nots in America. Soon enough, the aristocracy will live behind an app and a smartphone, and its gig economy workforce will be the new serfs of the 21st Century.