Aligning the value of gig work with the value of job quality

During a historically tight labor market with more job openings than available people to fill them, businesses must prioritize job quality in order to compete for workers.

For Uber, Lyft and other platform-based gig companies, this problem is compounded by high gas prices, expensive cars and elevated auto loan interest rates caused by inflationary pressures.

There is no law or court determination in Illinois that has clarified the status of Uber, Lyft, and other app-based platform drivers. This ambiguity has allowed the companies to classify their drivers as self-employed "independent contractors."

Meanwhile, the companies have mounted aggressive lobbying campaigns to redefine employment and effectively wall off their drivers from accessing basic labor protections like minimum wage, the 40-hour workweek, workers' compensation and paid sick leave.

This perpetual state of legal limbo for gig workers comes at a cost. New research from the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign shows that their current treatment as independent contractors too often results in low incomes, lack of access to benefits, and significant health and safety risks.

Researchers conducted a survey of more than 500 app-based passenger and delivery drivers in the Chicago metropolitan area and found that a majority work more than 35 hours per week for gig companies. Nearly all drivers (86%) depend on their gig earnings to pay for basic expenses like food and utilities. And yet, about 4 in 10 earn less than $15 per hour after expenses.

Drivers were also asked about their working conditions. Majorities said they feel unsafe at least once a month driving in and around Chicago and that they have avoided taking bathroom breaks while driving. Another 40% have suffered an injury or illness while driving - despite having no access to workers' comp or paid sick leave. App-based platform drivers are also more likely to be uninsured (13%) or rely on Medicaid (18%) than the local workforce.

Perhaps not surprisingly, the survey data shows that many Chicago-area gig drivers are looking for a change. A slight majority (54%) say they want to become employees, and 9 in 10 say they should have the right to unionize.

These recent survey findings generally align with prior research into the conditions faced by gig workers that drew on government and ride-share company data, and concluded that Chicago-area gig drivers earn an average of just $12.72 per hour after expenses.

Over the last several years, policymakers have been discussing how best to address the employment status of app-based platform drivers. This policy discussion became even more urgent when drivers faced long spells of unemployment during the pandemic. Many received taxpayer support from pandemic unemployment assistance but never paid into the system prior to the public health emergency.

An Illinois Future of Work Task Force report released in May 2022 recommended "integrating ... gig workers into existing and new benefits frameworks," launching discussions in Springfield about whether to classify drivers as employees or to consider a hybrid approach that keeps the independent contractors status but implements minimum standards of pay and expands access to things like workers' comp and unemployment insurance.

The firsthand experiences of the drivers themselves clearly show the best ways to improve the labor market competitiveness of these jobs. Ensuring that drivers have representation as workers, paying them for all their time including when they are waiting for requests, and providing sexual harassment training for drivers are just three examples.

Right now, there are 400,000 job openings in Illinois. An opportunity that promises earnings close to the minimum wage, no representation on the job, no bathroom breaks, no health insurance and no paid leave but a high chance of injury and illness, and - for good measure -$3.50 per gallon gas?

That's probably not competitive in the current labor market.

Real-world data certainly argues for moving these workers closer to regular employee status, expanding access to collective bargaining, and implementing other reforms that improve safety can better align the value of gig work with the value of job quality - instead of needlessly pitting them against one another.

• Frank Manzo IV, MPP is the Executive Director of the nonpartisan Illinois Economic Policy Institute.