Gig economy companies control workers in new ways but present no new regulatory issues.
In 2018 alone, federal and state courts in Pennsylvania arrived at virtually opposite conclusions about whether Uber drivers are “employees” or instead are self-employed “independent contractors.” The U.S. District Court for the Eastern District of Pennsylvania ruled that drivers for Uber’s elite limousine service, UberBLACK, are not “employees,” but the Commonwealth Court of Pennsylvania found that drivers for Uber’s widespread peer-to-peer service, UberX, are not “independent contractors.”
Classification is a threshold issue in work law because workers who are deemed independent contractors are ineligible for federal protections related to minimum wage and overtime payments, work-related discrimination, collective or union activity, and minimal standards for welfare and pension plan management. They are also, in most cases, ineligible for a host of similar state protections and benefits.
Despite the confusion concerning gig worker classification and the ongoing uncertainty it triggers for the workers themselves, many employment law experts have been arguing for some time now that gig labor does not pose any unique or especially perplexing regulatory challenges—but of course, others disagree. The issue at the root of judicial and regulatory confusion over gig work—how to gauge the level of control over workers in order to accurately sort them into “employee” and “independent contractor” buckets—is the same issue at the root of these and many other labor and employment law disputes in contemporary America.
Most of the characteristics of gig work that are supposed to make it unique and therefore a bad fit for current employment laws have easy, and easily regulated, analogies.
The triangular company-worker-consumer relationship exemplified by gig work is broadly similar to the experiences of temporary workers who are differently accountable to both their agencies and those agencies’ clients. The dispersal of tasks to workers who complete them in private homes or vehicles parallels the system of piecework labor that was popular for centuries in Europe and America and was revolutionized by the 19th century American engineer F.W. Taylor. Companies outside the gig economy—especially ones selling taxi and delivery services—have long been classifying their workers as independent contractors but wrongly controlling the way those workers do their jobs as if they were employees. And the combination of variable service quality with singular brand identity that characterizes an Uber driver or an Airbnb stay perfectly tracks the way services outside the gig economy have been branded and marketed for decades.
As far as employment regulation is concerned, gig work is not unique because of the problems it raises, but rather because of how transparent it is about the business practices that contribute to those problems. It is simply easier to see that, for instance, Uber exercises control over drivers because of the technology that is involved and the fact that two of the three parties involved—the consumer and service provider—are individual human beings rather than large corporations.
Three aspects of gig work make the extent of company control over service providers especially apparent: reputation ranking systems, internal performance standards, and real-time tracking.
Reputation ranking systems rely on peer-generated feedback to produce aggregated scores for each service provider and, sometimes, for each consumer. These scores, usually based on five- or ten-point scales, are one of the most visually prominent features of a service provider’s profile because they serve to assure prospective consumers that a driver or homeowner whom they have never met is nonetheless a vetted and trustworthy person.
But the scores produced by these ranking systems, which are presented as the unvarnished voice of consumer experience, are actually heavily shaped by the companies themselves. Uber and Airbnb determine which reviews to factor into a provider’s score and how raw scores will be averaged and rounded to create an easily digestible and immensely influential single-digit number that will be presented to consumers. In addition, ranking systems are susceptible to bias and inaccuracy in much the same way as paper-and-pen reviews.
Internal performance standards use ranking scores and other service provider metrics, like the number of client requests fulfilled per month or average response speed to initial client requests, to determine which providers are permitted to stay active on the company’s platform. In many cases, these internal standards are also used to award “elite worker” statuses that come with lucrative perks: better access to high-paying clients and an improved ability to attract repeat customers. In all cases, they serve to vet and remove low-functioning providers to maintain consumer satisfaction with the company’s brand. Even more than the scores produced by ranking systems, these performance standards reflect the authority gig companies have over service providers.
Finally, neither the ranking systems nor the creation of internal performance standards would be possible if gig companies did not track their service providers in real time. This monitoring is more than a 21st century analog to the punch-in-punch-out time card—although the ability to know when exactly a driver is providing a ride via the Uber app, as opposed to Lyft, is one of the reasons why transportation network companies could, and sometimes do, provide a minimum wage guarantee.
Real-time tracking also extends to response speed on Airbnb and physical location on the pet-sitting platform Rover. Perhaps most strikingly, it can extend to aspects of a provider’s work style—one of the classic definitions of what it means to exert control in an employment context—such as acceleration and breaking speed.
These practices do not suggest that gig companies are unusually intrusive or malevolent. On the contrary, and given the realities of work in the contemporary United States, where sock color is specified and workers’ hand gestures may soon be measured using ultrasonic wristbands, they simply suggest that gig work is not unusual at all. It is simply easier to see how gig companies control their workers via mechanisms like ranking systems, performance standards, and tracking. The inconsistency in classification outcomes for gig workers is caused by the thing that triggers inconsistent classification for FedEx drivers and other “non-gig” workers: labor and employment law’s reliance on a single concept like control. Until and unless that changes, courts will continue to produce confusing and contradictory opinions on how to regulate this new area of work.
This essay is part of a nine-part series, entitled The Future of Workplace Regulation.