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The Hidden Dangers of the “Gig Economy”
The “gig economy” is booming. And while economists argue about its benefits and drawbacks, the real danger hides in plain sight. Many recent events show just how often the latest economic trend places consumers at risk of serious injury and even death.
What Is the Gig Economy?
In the gig economy, temporary, flexible jobs are more common, as businesses hire fewer full-time employees, and more independent contractors and freelancers.
In many ways, this trend is a response to the Great Recession of 2008, but in other ways, it has been building for decades. Those who grew up in the 1980s and 90s were disillusioned by observing their parents’ experience. Mom and Dad often sacrificed family time to focus on their lifetime careers, and trusted their employers to make it all pay off at retirement time.
Then the market bottomed out. Many dedicated employees saw their retirement funds disappear. Firms where they had devoted so many overtime hours paid them back by laying them off.
Young people entering the workforce at the turn of the millennium weren’t satisfied with entry-level positions and a non-binding promise of seniority. They demanded more flexibility, wanting to enjoy their lives now. They weren’t willing to gamble on a future that might never come.
The Birth of the Gig Economy
As millennials began to carve their own paths, they sought work that was adaptable to their needs in the moment. As technology improved, it became possible for people to work remotely, rather than be tethered to a brick-and-mortar office. Companies sprang up to take advantage of this situation.
In some ways, the gig economy has been beneficial. Workers desiring flexibility can do part time gig work whenever they want. Businesses can save money by paying temporary workers as needed. Consumers can easily find goods and services that are close and convenient.
However, full-time employees seeking a more stable career are finding fewer opportunities, and losing jobs to temps who don’t qualify for benefits or career development.
And gig workers are discovering a frightening reality: There is no safety net in the gig economy.
You can call yourself an Uber driver or Amazon delivery person, but Uber and Amazon call you an “independent contractor.” By not classifying their drivers as employees, they avoid responsibility for those drivers’ actions.
And when people are harmed by those actions, they spend millions on high-priced attorneys to avoid paying those people a dime.
The Human Toll
Corporations avoiding responsibility for harming consumers is nothing new; the gig economy has simply provided them with a new way to do it. Here are just a few examples of gig economy companies whose actions are placing people in danger:
Uber and Lyft Sexual Assaults
In early 2019, a client retained my firm in a sexual assault claim against an Uber driver in the Oakland, California area.
The victim used the Uber app to request a 15-minute ride, during which the driver assaulted her. The driver was soon arrested, and we learned that there were multiple victims in this case. Our client suffered severe emotional trauma, acute anxiety, disorientation, loss of focus, and trouble sleeping.
Just before that incident, CNN published an expose that Uber’s background checks on its drivers were inadequate. They often didn’t cover the applicant’s criminal history or even require fingerprints. At that time, over 100 Uber drivers had been accused of sexual assault.
At the outset of our case, we did a cursory Google search on the name of the driver. We found a felony arrest listed for his very unusual name. The arrest matched the location where his Facebook page confirmed he lived at the time.
That alone should have disqualified him from becoming an Uber driver. The information was so easy to find, it is almost certain that Uber didn’t perform even the most cursory background check before subjecting their customers to this sexual predator.
Just recently, 14 women sued Lyft for their mishandling of sexual assault cases.
Strict regulations govern taxi companies regarding the drivers they hire, but Uber and Lyft don’t consider themselves taxi services. They claim to be technology companies, or “Transportation Network Companies.” They see their role as connecting people who need a ride with people willing to drive them. Clearly, Transportation Network Companies do not see themselves as being in any way accountable for their users’ safety.
Amazon Delivery Deaths
Amazon’s fast, free shipping used to rely on FedEx, UPS and the US Postal Service for door-to-door package deliveries. The behemoth retail company refers to those deliveries as “the last mile.”
However, these shippers grew tired of Amazon’s constant demands for lower prices. As a result, Amazon has been hiring more independent contractors as “last mile” drivers.
Like Uber and Lyft drivers, these workers have no rights as employees. And like Uber, Amazon absolves itself of any responsibility for their actions. In court filings, Amazon refers to them as “third parties not under the direction or control of Amazon.com.”
However, Amazon uses routing software to allow dispatchers from Amazon warehouses to closely monitor these drivers, and call them directly if they fall behind schedule. Amazon is the sole client for many contractors and can make demands regarding their hiring decisions. That sounds a lot like direction and control to me.
Even though delivery driving is one of the deadliest jobs in America, Amazon’s “Flex” drivers receive very little safety training. Many Amazon delivery drivers say they are encouraged to skip meals, bathroom breaks, and even avoid wearing seat belts to deliver packages faster.
Not surprisingly, public records document hundreds of road wrecks involving Amazon delivery vehicles. At least 100 lawsuits name Amazon as a defendant.
Tragically, since June 2015, Amazon delivery contractors have been involved in at least 10 fatal accidents.
In 2018, thousands of GPS-tracked dockless electric scooters began showing up on urban streets without warning. These dockless devices had no designated pick-up or drop-off spots. Users could rent them using a mobile app and ride away, with no oversight or instruction. When done, they can leave them virtually anywhere for another rider or company representative to pick up.
Scooter companies like Bird, Jump, Lime and Lyft dumped them in urban centers literally overnight.
The strategy was intentional. Permits cost time and money, so they forego that process and deploy their vehicles unannounced. Instead, they saturate the market to establish a strong presence and gain traction with residents.
Cities scrambled to deal with the unexpected safety risk of hundreds of motorized scooters inundating their streets. Unhelmeted users buzzed down sidewalks at 15 miles per hour, and abandoned Bird scooters on residents’ lawns, or in the middle of driveways and store entrances.
A 2018 study estimates that at least 20 users sustain injuries on e-scooters per 100,000 trips.
Half received head injuries, and fifteen percent suffered traumatic brain injuries. 29 percent of injuries involved alcohol; 37 percent involved excessive speed. 19 percent of riders involved in an e-scooter injury believed the scooter malfunctioned.
These scooter and dockless bike companies are named in multiple lawsuits for their dangerous practices; time will tell if they have any effect.
For many families, vacations are cost-prohibitive, considering hotel prices. The Airbnb marketplace makes vacations more affordable for many. Airbnb is similar to Uber in that it connects people seeking accommodations with private parties offering them for a price.
But sometimes unsafe conditions on these properties result in guest injuries. Recently, a 4-year old boy in Phoenix found his way into an ungated pool at an Airbnb property, and was rushed to the hospital in “extremely critical condition.” It isn’t clear if the owner had violated property codes.
The new Airbnb Plus program offers “high quality homes” that are inspected before rental. But unless you can pay Plus prices, your property probably won’t receive a safety inspection.
The Gig Economy is a Mixed Bag
Full disclosure: I use Uber, Lyft, Airbnb, and purchase from Amazon.com. I haven’t rented a dockless scooter, but I admit they sound like fun. The sharing economy has some good points, and makes it possible for people at all economic strata to enjoy the finer things in life.
And I certainly don’t begrudge a company that runs a useful service its full measure of success.
I do resent organizations raking in billions of dollars on the “sharing economy” and refusing to share any accountability for the situations they created.
It’s interesting: these new “collaborative consumption” corporations are a lot like the old ones. They are, as always, solely focused on the bottom line, and less interested in the safety of its employees, customers, and communities.
That’s why I’m in business – to give injured victims of negligence or wrongdoing their day in court. When the actions of the rich and powerful result in injury and death, I want to hold them accountable. I want to help to create an economy and a social structure that works for everyone, regardless of their tax bracket.