The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

“Gig Economy” Exploitation

Nov 25, 2019

Increasing numbers of workers have turned to apps on their phones for work. Though most had other jobs, Uber alone had more than 800,000 people drive for it in the U.S. at some point last year—almost as many as worked in the entire auto manufacturing industry. These jobs are not just for young people. An analysis by Retirement Equity Lab in New York found workers over age 55 are three times more likely than those under 35 to work in the “gig economy.”

These jobs come without benefits like healthcare or retirement. They make workers take care of their own costs, like maintaining the car used for work. But whether driving for Uber or Lyft, or delivering groceries or meals for Postmates, Instacart, or Grubhub, these apps are one of the few places people can find work.

These companies are in fact not profitable: Uber, Lyft, Grubhub, DoorDash—they have all been losing money. Uber now promises to become profitable ... by 2021! But these companies attract huge amounts of capital. Most is pure speculation—investors put money in, hoping others will invest after them and the stock price will go up.

Like any employer, these “gig economy” companies make money by paying their workers less than the value they produce. But because workers don’t get an hourly wage, the companies that run the apps can manipulate how much workers make by changing a computer algorithm. The employers have been on the war path, driving down wages to the breaking point.

Postmates workers reported they are making 30% less than they did a few months ago, after the company changed the way it calculated pay and got rid of a $4 per job guarantee. Instacart workers report a similar reduction, especially after the company took off their automatic tips. Uber began reducing their bonus structure in 2016, and reduced it further by 2017. Lyft has made similar changes to bonuses. According to an analysis by the Economic Policy Institute, average pay for Uber drivers after expenses like car maintenance and self-employment taxes now comes in at just $10.87 an hour—with no benefits.

The technology behind these apps could be used to make all our lives easier. But that will not happen until the control of these apps—and of all of society—is in the hands of the working class.