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Thursday, Feb 1, 2018, 1:41 pm

Lipstick on a Gig: Why We Should Be Very Skeptical of Uber’s New “Portable Benefits” Scheme

BY Julianne Tveten

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People walk down Market Street past sign with logo at the headquarters of ride-sharing technology company Uber in the South of Market (SoMa) neighborhood of San Francisco, California, October 13, 2017. (Photo by Smith Collection/Gado/Getty Images)  

In 2016, the New York Taxi Workers Alliance (NYTWA) filed a class-action lawsuit against Uber, claiming the rideshare giant denied them benefits, even though they were full-time workers. The company accomplished this, the suit charged, by classifying workers who spent “six or seven” days a week “laboring for 12-plus-hour shifts” as independent contractors.

These grievances will likely sound familiar. Uber is widely reviled for its instrumental role in creating a tenuous 21st-century gig economy fueled by a precariat of contracted drivers—a point countless news outlets have exhaustively detailed. As a result of that negative press, and a rash of additional lawsuits challenging Uber’s labor abuses, the company now ostensibly seeks to mitigate the damage it’s done. 

Last week, Uber floated the concept of a “portable benefits system” for its drivers in Washington state, wherein contract workers would be able to transfer benefits from job to job. While the plan’s contours remain unknown, at least publicly, the company has used the initiative to advance its image as a protector of labor rights. It is not immediately apparent who would fund the system, but Uber indicated in its statement that it aims to “create arrangements for social investments from private and public sources.” Uber acknowledges that workers need to “protect themselves and their loved ones” amid infirmity and retirement. The company vaunts its engagement with David Rolf, president of the Service Employees International Union (SEIU) 775, which represents workers in Washington and Montana.

The proposition, however, smacks of insincerity. Rather than an effort to improve workers’ lives, it’s likely a ploy to justify and obscure the volatile labor conditions the company has created in the name of cutting costs. 

There are many reasons to question Uber’s sudden sympathy with union organizers and workers. The location choice of Washington state, for example, is revealing. The announcement follows the introduction of a state bill that would require companies to contribute funds to third-party providers to offer such benefits as paid time off, health insurance, auto insurance, and retirement to contractors. It’s thus probable that, fearing the obligation to spend more on workers and an onslaught of worker-misclassification lawsuits, Uber simply seeks to obviate any new financial losses.

Furthermore, Uber has vehemently opposed worker organizing within the city of Seattle. In 2015, the Seattle City Council passed an unprecedented law allowing Uber and Lyft drivers to unionize. The move incurred a lawsuit from Uber, which has since adopted an anti-union propaganda campaign featuring television commercials, podcasts and a “driver independence” initiative known as Drive Forward Seattle. (Uber has not replied to a request for comment.)

While SEIU’s Rolf has thrown his public support behind the initiative, his position doesn’t represent that of labor more broadly—or even of his international union. Hector Figueroa, who serves as president of SEIU’s East Coast property services affiliate, told Bloomberg, “This is just a facelift by Uber to be able to look like they actually care about the people who they hire for the services they provide. I just cannot comprehend how today, as a labor leader, I would be encouraging the spread of ‘independent’ work.”

NYTWA director Bhairavi Desai added in an interview with Bloomberg, “This type of bogus agreement only gives them cover for exploitation. Selling out to the bosses is not innovative—It’s as old as capitalism.”

Rolf did not respond to a request for comment.

In unrolling the scheme, Uber also collaborated with Nick Hanauer, a Seattle venture capitalist who’s worked alongside Rolf in raising the minimum wage and severing ties with Well Fargo. Hanauer, a yacht-owning billionaire who’s invested in the ruthlessly anti-worker Amazon, has sought to make the case for “saving American capitalism.” Based on his writings, Hanauer doesn’t so much seek to ensure security and morale for the multitude as to stave off its pitchforks. (Hanauer has not responded to a request for comment.)

Such pro-business wrangling of limited worker protections has become a trend among tech elites. Mark Zuckerberg, Sam Altman and other industry executives have tendered publicly-funded basic-income schemes, putatively seeking to hedge the impact of income inequality. Yet, while Altman and others have suggested an income floor, there is not an equal push for an income ceiling. Meanwhile, as they outsource wages to the government, these individuals continue to support a free-market system for housing, healthcare and other essentials.

Uber insists that “the American social safety system, which was designed in the 20th century for a very different economy, has not kept pace with today’s workforce” and that a benefits system must accommodate “more flexible, independent” forms of work. While it’s true that the social-safety net, or lack thereof, has failed vast numbers of Americans—regardless of their employment status—this isn’t for the reasons Uber implies. The company would have the public believe that the temporary-work economy it’s helped to shape is the way of the future, and that economic, political and social systems must adapt. What it neglects to address, however, is the untenability of expecting workers to drift from one low-wage gig to another while their costs of living continue to soar.

The economic and psychological burdens on Uber drivers are far too heavy for any venture capitalist or CEO to lift. Workers don’t need corporate exploitation masquerading as inventive justice. They need free, accessible necessities and liberation from demoralizing labor. Far from solving a problem it’s created, Uber is merely chiseling away at it, as lucratively as it can, until the next lawsuit surfaces. If Hanauer and his cohorts truly seek to quell the masses, it seems they’ll have to find another way.


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Julianne Tveten writes about the intersection of the technology industry and socioeconomic issues. Her work has appeared in Current Affairs, The Outline, Motherboard, and Hazlitt, among others.

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