Destroying Labor Law in the “Sharing Economy”

Many a magazine, including the usually liberal New Yorker, has gone ga-ga about Taskrabbit, AirBnB, Elance, and other new companies that in one fell swoop make a mockery of fair labor practices, regulated consumer products, minimum wage, and taxes. In a rather lengthy article in which a New Yorker writer gushed about her Taskrabbit experiences, not once did she consider how this new setup would affect people who need to make a living, not even when describing Fiverr, a company that preys on the truly desperate by posting jobs that only pay $5! The only concern was whether this would work for the consumer and “spoiled child.”

The Bogus “sharing economy”

What’s really jaw-dropping is that these slick companies present themselves as “neighbors helping neighbors.” Yeah, the way Steve Jobs and Apple Store employees were neighbors helping neighbors. Only when I started searching under “Taskrabbit and minimum wage” or “AirBnB is illegal” did I find critiques that made any mention of the working people who would be affected by these new start-ups: unionized hotel workers, licensed taxi drivers, and myriad other workers who need regular work, on-the-job protection, and living wages.

One article interviewing a Taskrabbit worker had this to say: “They have no insurance.  They walk into unknown situations and often get paid less than minimum wage to do unthinkable tasks. This person found themselves knee deep in cat diarrhea. In addition, the TaskRabbit we spoke with thinks the startup actually takes closer to 70% of high transactions, which is much more than the 15% it says it takes on average.” No minimum wage is required, no one is monitoring the posters for truthfulness about the task (all they need is an email and a credit card).

No Protection for Workers, Minimal Contribution to the Public

Though not everyone who posts is an exploiter, anyone can see how open to abuse this system is. And when a Taskrabbit filed a complaint and raised her wage requirement? She was told if it happened again, she’d be fired. (Please take the time to read the full article. I was very happy to see it posted in BusinessInsider; it made me feel good to see this exposé in a magazine for businesspeople rather than The Nation or a union publication—fond though I am of those!).

The other bad side of these new laissez-faire businesses is that they make tax evasion pretty easy. After all, what’s to stop them from accepting partial payment in checks and the rest in cash? Or maybe most of it in cash with just an occasional check to keep the umbrella company from becoming overly suspicious, not that they seem very inclined to check. “You may be subject to rental income taxes,” they say. Oh really? Why not specify that beyond a miniscule amount of money, you will certainly be subject to income taxes?

Freelance = Free for the Employer

But surely professional work is not subject to the same exploitation that mere cat-litter changers have to put up with? Or is it? Elance is a well-known site for freelance writers. Here is one writer’s experience: “it chapped my backside that they actually did use my brochure, but did not pay me for the work I had completed for them. All they did was change the titles of the sub-sections. Everything else was word-for-word. I went through Elance’s policies and …went through the proper channels, but because the client had become unresponsive, they could not do anything about it. Their account was no longer valid, so the money couldn’t be withdrawn automatically. There was nothing left to do.” What could be more illegal than not paying a worker at all?

And where there is no transparency and no regulation, your fellow employees can game the system and take advantage. One Elance writer complained that he/she was suspended for having multiple accounts, but multiple accounts allow you to bid twice on the same job, so while everyone else can only bid once.

Is There Any Hope? Luckily, Yes if We Work Together

The National Writers Union is on the front lines with freelancers and recently introduced a bill HR4643 through Rep. John Conyers in the House of Reps that would allow freelance writers to have collective bargaining rights. Since they have been considered independent contractors, they have been subject to anti-trust laws, but now that they so often work for a middle man, collective bargaining makes much more sense. In New York, a freelancers’ “union” has started to advocate for the unemployment, health insurance, retirement, and abuse issues of freelancers, asking government to recognize and provide support for this burgeoning sector. Small businesses have the Small Business Administration; unions have the Department of Labor (sort of, employers have more of it), but freelancers need their own representation. And they need it desperately.