Gig workers relying on companies like Uber, Lyft and Postmates for a large percentage of their income have few labor protections or benefits. That's why the choice to stop working as a preventative measure in the era of coronavirus may be impossible.
The last time the U.S. economy entered recession, in 2008, the on-demand sector didn’t exist. How it will respond to a slump is a matter for speculation. The low-barrier to access for gig work may make it a refuge for laid-off workers from other sectors, softening the blow of widespread unemployment. But that’s cause for concern to those who rely on these platforms to make a living, as an influx of labor could drive down wages.
Making a living off of ride-share and other platforms was hard enough in a strong economy, according to Perea, the San Francisco driver with diabetes, who also blogs about being a ride-share driver. That would be made worse if the pandemic causes major job losses, sparking an influx of new drivers to turn to the gig economy to make ends meet, according to Perea. “What you’ll get is a lot of extra supply of drivers or delivery people without the demand to really meet it,” he said.
“Seventy percent of the U.S. economy is based on consumer confidence and as everyone retrenches, you’re going to see a general downsizing of our discretionary spending,” said Jon Garon, a law professor and director of the intellectual property, cybersecurity and technology program at Nova Southeastern University in Florida. “Uber, Lyft and the Airbnbs of the world are going to collapse because the entire travel industry is going to be dramatically affected.
Initially, Lyft spokesperson Adrian Durbin said the company was only waiving the minimum ride requirements in some markets, and if workers can’t make the rent “participating drivers may return their rental cars at any time at no additional charge.” On Tuesday, the company told drivers that it was waiving the 20-ride weekly requirement in all markets but reminded drivers they can return the car if they want to avoid being charged for rent, according to an email The Times reviewed.
“Particularly during a pandemic, they have no access to health care,” he said. “These companies that are built on the gig economy are going to suffer significantly, and there’s no safety net for those employees at all. So they’re going to be the first to struggle through this economy and they’re going to be the last back into the workforce.”
In California, the dual threat of pandemic and recession has lent a new sense of urgency to efforts to reduce the precarity of gig work. Lawyers and labor groups are turning to a newly enacted state law,, to attempt to secure long-sought-after protections for contractors in the gig economy. The law, which the gig companies have waged a $110 million ballot campaign against, makes it harder to treat workers as contractors.
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