Laurie Richards wanted to do something different after years of working as a consultant and legal secretary. She saw a Facebook advertisement for Shipt, a grocery delivery app owned by Target, and was hired to shop for seven or eight hours a day for customers in Michigan.
Then Covid-19 hit and Richards had to reduce her hours. She became one of the 29.8m Americans who filed for Pandemic Unemployment Assistance, the first time Congress has provided a safety net for the estimated 57m gig workers and freelancers who would otherwise not be eligible for jobless payments.
“It’s been extremely helpful . . . I’m thankful that it was available to us,” Richards said.
That programme is set to expire on September 6 after Congress extended it twice. Other jobless benefits are also set to end, leaving nearly 10m people strapped for cash at a time when Covid-19 cases are back on the rise.
“This does not look like a good time to end some of these federal programmes,” said Stephen Wandner, a senior fellow at the National Academy of Social Insurance.
Legislation has not kept pace with the breakneck growth of the gig economy in the past decade, and governments around the world are struggling to regulate it.
The UK Supreme Court ruled in February that Uber drivers were entitled to minimum wage and holiday pay. In the US, Congress’ passage of PUA was a milestone in the fight for better work protections for gig workers, who lack a traditional employer and have no access to collective bargaining, healthcare, and until the pandemic, paid sick leave and unemployment assistance.
Reverend Cherri Murphy, a Lyft driver and lead organiser for the East Bay Alliance for a Sustainable Economy, said the expiry of the PUA would exacerbate issues many workers were already facing, including poverty and eviction, and put the health of drivers and passengers at risk.
“The moral imperative is that [PUA] needs to be extended. The question is whether or not our senators have the moral will to pass the legislation,” Murphy said. She started driving for Lyft in 2018 but stopped in March 2020 due to Covid-19 concerns.
The expiry of benefits will have a disproportionate effect on people of colour as more than half of gig workers are Black or Hispanic. The same groups are experiencing slower economic recoveries from the pandemic. At least 20 states have already discontinued PUA before the federal deadline after Republican governors blamed unemployment benefits for labour shortages.
While moratoriums on student loan debt and evictions have been extended, an extension of PUA seems unlikely without key Democrat Joe Manchin on board. Without the support of Republicans, all 50 Democrats need to back an extension in order for it to pass.
“We have a bunch of politicians who don’t understand what it’s like to be poor,” said Luke Gray, a gig worker for food delivery companies DoorDash, Grubhub and Instacart.
Gray moved eight hours outside of his hometown in the Mississippi Gulf Coast to Nashville to earn more doing deliveries during the pandemic. This despite having an underlying health condition and constant fears of contracting Covid-19. He is three months behind on rent.
“I feel like no matter which way I go, I’m screwed no matter what,” he said.
About a third of gig workers in the US decided, like Richards, to work fewer hours because of fears about catching Covid-19. The rideshare sector was hit particularly hard, with the number of daily active drivers on Uber and Lyft falling by over 40 per cent between March and August of 2020.
The companies are still experiencing a labour shortage, with riders complaining of long wait times and high prices. Last quarter, Uber and Lyft poured millions into financial incentives to lure drivers back on to their apps, including a $250m stimulus package from Uber and bonuses of up to $800 for returning Lyft drivers. According to Uber’s second-quarter earnings report, the app gained 420,000 monthly active drivers and couriers from February to July.
John Zimmer, president and co-founder of Lyft, expects the expiration of federal unemployment benefits to act as a “tailwind” to drive more workers on to the app. “In Q2, we saw an uplift in driver applicant growth in states that opted out of the federal programme early,” he said in the company’s most recent earnings call.
While the revenues of the likes of DoorDash and Instacart rose last year, workers reported a reduction in earnings due to companies changing their payment algorithms. On July 31, dashers went on strike after DoorDash reduced its $3 base pay, the amount given to dashers per order without tip, to as little as $2.
Shelly Steward, director of The Aspen Institute’s Future of Work Initiative, said that permanent programmes were needed to support gig and low-wage workers.
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Companies including Uber and Lyft are fighting to classify their workers as independent contractors, making them ineligible for employee benefits such as traditional unemployment insurance and paid sick leave.
Gig workers scored a major victory against these companies on Friday when a California Superior Court judge declared Proposition 22 unconstitutional. The ballot measure, passed by California voters last year, exempted gig workers from employee status. Over 90 per cent of the $224m spent promoting it came from companies like Uber, Lyft, DoorDash, and Postmates, making it the most expensive ballot initiative in state history. Friday’s ruling came after gig workers and the Service Employees International Union filed a lawsuit challenging the new law.
“Gig companies know that we are the power that drives them. Without us there is no Uber, there is no Lyft, there is no DoorDash,” said Willy Solis, a lead organiser for the Gig Workers Collective and gig worker for Shipt and Uber Eats.
The battle is far from over. Proponents of Proposition 22 already said they would appeal the court’s decision, and gig companies are fighting to get a similar measure enacted in Massachusetts.
As for Laurie Richards and her concerns about the Delta variant, she plans on going back to work when unemployment benefits end.
“I don’t feel like I have much of a choice,” she said.