Jakub Porzycki/NurPhoto
An Uber Eats courier is seen in Krakow, Poland on June 22, 2022.
For an early riser like Adalgisa Payero-Diarra, 1 p.m. would usually be the time she calls it a day, eight hours after beginning to zip around New York City in her black Toyota Camry. Once the afternoon hits, she takes a couple of hours off, before getting ready to make dinner for her husband and kids.
But these days, any rest time is a bonus. To reach her daily earning target of $250 to $300, the 44-year-old mother of four now has to drive until 4 or 5 p.m., rush home, do the housework, and check on her children’s homework, before she goes to bed exhausted—six times a week.
“It puts a strain on me,” said Payero-Diarra, who has been driving for Uber and Lyft since 2019. That couple of hours driving instead of resting could be a matter of life and death for workers like Payero-Diarra. But she has little choice. One of her daughters is a senior in high school, leaving her worried about impending college bills. Gas prices for two days’ worth of rides have nearly doubled to $80 from $45 at the start of the year, she said. Plus there are groceries to worry about: Food prices in New York spiked by more than 9 percent in June compared to the previous year.
Payero-Diarra is one of the millions of gig workers worldwide that have been struggling to make ends meet as fuel and food prices soar due to the ongoing Russia-Ukraine war. While falling from its peak, Brent crude oil prices have still gone from below $70 per barrel in July last year to over $100 currently. And global food prices in June were 23.1 percent higher than a year ago. Though current average pump prices across the U.S. have fallen to $4.49 per gallon from a record $5 in June, according to AAA, that figure is still more than 40 percent higher than a year ago.
But it’s not just inflation that is hurting gig workers in the U.S. and abroad. A looming recession, which the World Bank warned will be hard to avoid in many countries, will reduce earnings as consumers spend less, while companies pull back on hours and lay off people as market conditions worsen. Gig workers are in an especially precarious position—most make low wages and have no access to employee benefits.
In Toronto, Canada, Uber Eats delivery worker Brice Sopher said he used to see CAD$10 ($7.70) tips pretty often last year. Now, customers are tipping just CAD$1 or CAD$2 ($0.78 to $1.55). Meanwhile, pay on Uber Eats, which includes “estimated tips”—with no guarantee that a customer will actually give any extra money—have fallen to as low as CAD$3.24 ($2.52) for a 17-minute trip, and CAD$5.01 ($3.89) for an order that takes 30 minutes uphill. These payouts are far below Toronto’s minimum wage of CAD$15.50 ($12.04) an hour, and its living wage of CAD$22 ($17.09) per hour.
Payero-Diarra said customers are tipping less because rides have become more expensive. “Customers think we get all the money,” she said, but Uber and its peers take around a quarter of their earnings—sometimes much more.
And yet, Uber’s chief executive officer Dara Khosrowshahi, who made $20 million last year, maintained that drivers’ revenue “looks really good,” and that higher gas prices are “not affecting our business” during a public appearance last month.
“Uber has shifted most of the onus on customers,” Sopher said. “With the recession, with inflation, people are having a harder time making ends meet, so they’re definitely less able to tip and that means the workers are bearing the brunt of it…we’re left high and dry.”
In March, Uber introduced a fuel surcharge of $0.45 to $0.55 for each ride, and $0.35 to $0.45 for each Uber Eats order in the U.S. and Canada, to “help reduce the burden” on drivers and couriers (the surcharge for delivery orders ended in June). Lyft imposed a similar fee.
“I’m saving money for the coming economic crisis,” said Anshu.
A Lyft spokesperson said in a statement that the company “recognize[s] the pain at the pump for drivers” and it is “keeping a close eye on gas prices, which is why we have extended our fuel charge until further notice.” Uber did not provide any comments.
Both Payero-Diarra and Sopher say the surcharges have done little to help, especially when the amounts are fixed, whether the ride is one mile or 100. “It’s like Uber doesn’t understand how fuel works,” Sopher said, calling the scheme a “dark joke.”
A commission cap of between 10 to 15 percent would help workers cope with the skyrocketing prices right now, Payero-Diarra said. The idea is not unprecedented — both New York City and San Francisco have permanently imposed a 15 percent cap on the amount delivery companies can charge restaurants, a move that started during the pandemic.
KUMAR ANSHU, A RIDER FOR FOOD DELIVERY FIRM ZOMATO in Bhagalpur, a city in the Indian state of Bihar, said that while petrol prices have returned to January levels, he is trying to save as much as he can, given the road ahead.
“I’m saving money for the coming economic crisis,” said Anshu, who made ₹6,300 ($79) in June and spends about one third of his earnings on fuel. “I’m not spending on what I want, but only on what I need.” India’s annual food inflation rate hit nearly 8 percent in June; economists expect the rate to hit over 9 percent in the second half of 2022.
Downward market conditions have also punished gig workers. Access to cheap money that fueled the venture capital boom the past two years was cut off this year when interest rates went up. Companies that rely on gig workers, once the darlings of technology investors despite being massively unprofitable and questionably sustainable, are now trying to cut costs to appease their shareholders.
Workers have become collateral damage. Some of the casualties include drivers and delivery agents for Dubai-based ride-sharing startup SWVL, which dismissed dozens of bus drivers in Egypt, and German instant groceries provider Gorillas, which laid off over 100 riders.
At Gorillas’ rival Flink, which raised $750 million at a $2.85 billion valuation last December, couriers have seen colleagues laid off or their own hours cut, said Robert Snyder, a Flink delivery rider in Berlin. Under Flink’s arrangement, riders like Snyder are considered employees and given a set number of hours that range between 10 and 35, for €12 ($12.30) per hour.
But Snyder said that since February, they have been receiving fewer hours than they were contracted for, and lesser pay as a result. Many Flink couriers are students and immigrants who need every cent they were promised. Some workers have also been dismissed without termination letters—required by law in Germany—and fired days after complaining about missing shifts. Others did not have their sick leave recorded and registered as a no-show instead, Snyder claimed.
“They’re basically coming up with ways that they can try to use fewer riders,” Snyder said.
FURIOUS WITH THE COMPANIES' INACTION, gig workers are now organizing to fight for pay raises and safety nets. Snyder and two colleagues are trying to form a Flink workers council in Berlin to make sure Flink stops exploiting its riders, with the election set for September 5th.
“Flink talks a lot like we’re some kind of one big family. Everyone knows that’s bullshit,” Snyder said. “It’s a really nice job if they actually treat us like human beings, [which is to] just follow the law, and pay people what they’re owed.”
Flink spokesperson Simon Birkenfeld told the Prospect in a statement that it had “built up its workforce quickly over the last 16 months and we understand that every month we have to clarify misunderstandings with employees or correct payslips. We try to educate as much as we can to make sure that our workforce understands the necessary demands for us to process payroll correctly.”
As for terminations, Birkefeld said they are still hiring “despite the regular seasonality in the summer.”
On May 1st this year, Sopher, who is the vice-president of Gig Workers United, an independent union supported by the Canadian Union of Postal Workers, joined fellow gig workers for a march down the streets of Toronto, boycotting lunch-hour app orders that day. Gig-worker strikes have also been held in the U.K, India, Dubai, Lebanon, and Turkey as the cost-of-living crisis unfurls.
“It’s good they are protesting,” said Ayoade Ibrahim, the vice-president of the International Alliance of App-Based Transport Workers. He said gig workers around the world are fed up having to endure even more economic hardship after two years on the front lines of the pandemic.
Any reclassification from driver to employee status would “incur significant additional expenses,” as Uber said in its 2019 public listing prospectus.
Meanwhile, workers say that their companies do little to nothing to help them cope with rising prices. Inflation has compounded other long-standing issues workers face as they spend longer hours on the road, like fatigue and risk of assaults, the Nigeria-based Ibrahim added.
The root of the issue that needs to be fixed is the misclassification of many gig workers as independent contractors, organizers said, especially at a time when they have to work harder while risking their health and safety. “[We need a] secure environment to make money,” said Ayoade.
“[These companies] are selling this kind of American dream of being our own boss, work when you want to, make easy money…without the full costs of the dream,” said Erin Hatton, a sociology professor at the University of Buffalo who studies labor movements. She added that many workers who tend to be attracted to gig jobs are people with disabilities or language barriers, putting them in an even more precarious position when they don’t have labor rights.
“They’re changing the law to implement their model legally, to carve them out of labor and employment protections so they don’t have to abide by all the other rules the other players have to abide by,” Hatton said, such as providing health insurance, paid sick leave and vacation days, and other benefits regular employees are entitled to.
Counting gig workers as employees is a policy the corporations have fought tooth and nail. Any reclassification from driver to employee status would “incur significant additional expenses,” as Uber said in its 2019 public listing prospectus. In the U.S, these app-based companies spent $224 million lobbying for California’s Proposition 22, which would exclude their workers from employee rights. This year, they launched a trade association called Flex to lobby against the PRO Act, which would reclassify some gig workers as employees and allow them to unionize. As recently as June, they tried to mislead voters in Massachusetts with a complicated ballot initiative that would keep gig workers as independent contractors. (The state took that measure off the ballot.)
These app-based companies have also cut deals that would give workers some legal protections and employee-esque benefits, but enshrine their status as independent contractors. In March this year, a heavily-criticized bill was passed after negotiations between Seattle’s Teamsters Local 117, Uber, and Lyft.
Just two months before that, Canada’s United Food and Commercial Workers International Union settled with Uber on what looked like a victory for the latter. Some representation services would be available to Uber drivers, but Uber gets to keep their preferred label for drivers. Meanwhile, a $15 minimum wage law passed by the Ontario government would only count the time when a gig worker is delivering an item—meaningless since workers spend more than half their time waiting for the next job or going to the pick-up location, Sopher said.
Payero-Diarra, who is the president of UTANY, an independent union for taxi and ride-sharing drivers, acknowledged that not every driver wants to be called an employee. “[The term] brings a lot of baggage into it,” she said. But the fact that they are called “partners” by Uber and Lyft means they should be treated equally. Her organization is now working with other groups through a coalition called Justice For App Workers that represents 100,000 gig workers to push for the rights to start a formal union, a right they do not have under federal law currently.
“I’m the one interacting and doing the labor. If you are calling me your partner, then you should be more fair and pay me and give me as many benefits as you are getting from this partnership,” she said.
