Jobs of desperation: How rideshare, food delivery workers lose in the gig economy
Peter Young was napping between blood draws when his ringing phone woke him.
He was lying in a hospital bed in Los Angeles as part of a five-day clinical trial that required his blood to be drawn every two hours. It’s not a job most people sign up for eagerly, but for Young, 27, it seemed like a dream opportunity. His full time job is delivering food for Postmates.
“This will pay a lot more for the time I am spending than rideshare,” Young said. “I’m in a hospital bed right now. That’s why I was napping – because I am physically beat up.”
Young has been a part of the gig economy, working for rideshare and food delivery apps, for about four years. He used to drive for Uber and Lyft, but since the pandemic, he only has been delivering food. Although Young relies on the income from Postmates to survive, he said the job’s unreliability is taking a toll on his financial and mental well-being.
“I can’t plan for the future. I can’t be confident in what income I will have in six months, and that is really stressful.”
Gig workers are considered independent contractors rather than traditional employees, so they don’t receive such benefits as health insurance and retirement programs. Many, like Young, are freelance delivery workers or drivers called to service through such apps as Lyft and DoorDash.
Gig work can give people flexibility and freedom, but some experts believe it also exposes them to inconsistent, low pay and the possibility of exploitation for the sake of customer convenience. The work became even riskier during COVID-19, which put thousands of people out of jobs.
In response, efforts to unionize gig drivers are underway in several major cities. Strikes are planned for July 21 in Boston, San Francisco and elsewhere – coming amid a shortage of Uber and Lyft drivers across the country.
“While they don’t have long-term security from a particular organization and also a lot of the benefits the organizations provide people with, they exchange that for being able to have greater control over what kind of work they do when they do it and how they do it,” said Brianna Caza, associate professor in the department of management at University of North Carolina Greensboro.
A transition to food delivery in COVID-19
During the pandemic, many drivers for rideshare were unable to find work driving for Uber or Lyft because of the risks of getting COVID-19.
On a call with investors in May 2020, Uber CEO Dara Khosrowshahi reported that COVID-19 had decreased business the previous month by 80%. However, Khosrowshahi said 40% of active rideshare drivers switched to the Uber Eats platform in April 2020.
Jesenia Rodriguez of New Haven, Connecticut, drove for Uber and Lyft but stopped in March. She switched to DoorDash.
“Due to the way they were paying, I was risking myself for two or three dollars,” she said.
Rodriguez applied for unemployment, but because she was still considered an employee of Uber and Lyft, her claim was declined.
“They knew I was an employee through Uber, so when I applied due to the pandemic due to the situation, no one responded with anything,” she said. “I haven’t gotten any unemployment at all.”
Rodriguez’s rent is subsidized through Section 8 housing, and she receives food stamps to feed herself and her son, but life has not been easy. She has determined that not working at all is a better option financially than returning to DoorDash.
“I had to pick up in Walmart, three different orders for only $3 each,” Rodriguez said. “I have to put gas in the car and if anything breaks down, I have to pay for it. Right now, I am not in that position.”
During the pandemic, Chance McNamara of Lexington, Kentucky, worked full time for DoorDash, which he said didn’t provide a livable income.
“You don’t really make enough to make a living out of it,” McNamara said. “You don’t really make enough to pay your rent to almost not even pay your utilities, because it’s going towards food, that’s going towards gas, that’s going toward car repairs.”
A spokesperson for DoorDash said 2 million delivery drivers joined the platform from March through September 2020.
Some college students or recent college graduates worked at DoorDash during the pandemic to make spare cash. Wills Rice, a recent college graduate from Scottsdale, said he enjoys the income from DoorDash, but it isn’t his only job and he has no dependents.
“There’s some days where I could make $130 in five hours, but there’s also times where I could make $60 in five hours,” Rice said. “And I think if you’re someone that’s relying on that to pay your bills, to feed your family, to do all that, I don’t think it’s reliable enough because it’s based on when people are ordering food”.
McNamara points to one delivery more than 45 miles away where he netted $15 – with no tip.
A spokesperson for DoorDash reported that 85% of “Dashers” are students or have a full or part-time job. Katie Wells, an Urban Studies Foundation postdoctoral research fellow at the Georgetown University Global Cities Initiative, said there is no independent data to support that. She and her colleagues studied how the lack of data from rideshare companies is allowing workers to be exploited.
“This is a story that these companies like to tell because that’s an easier sell as opposed to one to say that actually there’s no data showing this vast majority of rides are produced by part-timers,” said Wells, who studies Uber drivers in the Washington, D.C., area. “In fact, it’s the opposite. The majority of drivers are like those in our study that are full-time. They’re working really hard to support their families and can’t make a go of it.”
Who has ‘control’ in the gig economy?
Some rideshare and food delivery workers say the app companies have all the power.
“I don’t feel like I have control over anything,” Young said. “They control the flow of my day through an app. They can pay different amounts at different times a day. They can get me to work when they want me to work. And rather than having more control of my job, I feel like I have no control over my job.”
When he started driving for Uber and Lyft four years ago, the wages he earned were sustainable, Young said. He made about $130 in an eight-hour workday minus the price of gas, which was about $20 per day. That averages out at $13.75 an hour.
However, as time went on, the wages Young earned from Uber began to erode. Beth Griffith, executive director of the Boston Independent Drivers Guild, said the downward trend is industry wide.
“They change the way they compensate us, and it was done under duress, so in order for us to continue working even with arbitrations and things like that, every time they decide they want to change the contract, you have to agree to it,” said Griffith, who drives for Uber and Lyft.
Griffith said she was making a decent amount of money driving for Uber and Lyft until the pay structure was updated and she was forced to agree to the new terms. Uber got rid of a payment model known as the “numeric multiplier” and Lyft got rid of its model, “prime time,” in 2016.
Under those models, Griffith would work the night shift, earning 1.5 or two times the daytime fare. Under the new plan, drivers were paid per mile and per minute, regardless of the hour.
Uber in 2017 dropped its pay rates per mile to $1.75 from $2.15, and in 2019 to 60 cents from 80, according to accounts from drivers. Uber and Lyft do not publicly report data. Griffith and Young were unsure of the exact amounts but their estimates lined up with the amounts reported by other drivers.
Lyft and Uber, which recently acquired Postmates, did not respond to requests for comment. In April, Uber released median earnings for drivers in six U.S. cities. In Los Angeles, Uber reported a median hourly wage of $26.85.
Wells, at Georgetown, said the math isn’t always that simple. She is following 40 drivers who worked for Uber and moved in and out of the industry over time, including during the pandemic.
“The vast majority of these jobs are extremely low paid and exploitative,” Wells said, “but it’s really, really hard to figure that out because the costs are so nebulous – like a spreadsheet of 20-some different factors to figure out, what do they get paid?
“One of our drivers sort of said very early on, ‘My God, this makes McDonald’s look like a simple job because at least you’re not going to lose anything at the end of your shift.’”
Gig workers demand rights
Rideshare and food delivery drivers in some of America’s largest cities plan to strike July 21 to raise awareness about the impact of the gig economy on workers.
“We know that the only way to guarantee that these companies pay a good living is if we have a legally binding contract that we collectively bargain with these companies,” said Nicole Moore, an organizer for Rideshare Drivers United in LA.
“The situation they have us in is not one that is sustainable for our own lives or for the communities we live in.”
Moore has been driving for Lyft for four years in Los Angeles to support her family on top of another job. She stopped driving when the pandemic was declared in March 2020 because of safety concerns and a lack of demand for Lyft rides, especially at the beginning of the pandemic.
She got involved with efforts to unionize rideshare drivers after becoming fed up with the declining pay.
“There’s very little trust between drivers and the apps anymore,” Moore said. “They always spin things to make us think that we’re about to get something great when it’s something when they cut the mileage rate.”
Moore and other drivers could see a pattern emerging, but realized they had no platform to negotiate or demand better rates. And, she said, some full-time drivers are frustrated because they receive no health benefits or paid time off.
“The companies are really trying all over the country to deceive the public and drivers about their sweetheart deals, like a guarantee of flexibility, which is not a guarantee at all,” Moore said. “Drivers in California will tell you that we’re not making more and we’re making less.”
Rodriguez said drivers in Connecticut also are fed up. She is an organizer with Connecticut Driver’s United.
“We literally need help,” Rodriguez said. “I am lucky because I have Section 8. Imagine the people who don’t have Section 8. This is the reason why Uber and Lyft need to come up with something better for us because they only think about making their money and their customers. They don’t think about us.”
Griffith is organizing the strike in Boston and hopes the movement will spread to other cities.
Moore said it’s no surprise drivers are reluctant to rush back after the pandemic.
“It’s not what America wants,” Moore said. “America wants good jobs. They want to know that when they get a car, that person has had enough sleep because they’re earning enough money that if they work eight hours a day, they can make a living.”