Joseph Verono is driving in the slow lane of a Toronto highway, like he usually does when working. Verono (not his real name, at his request) is a contract driver for Uber, the popular rideshare app, and he knows the company tracks his speed. If he regularly drives over the limit—even just to keep up with traffic—he says Uber will lower his rating, reducing his ability to attract new fares.
A former warehouse worker, he needs this gig while he develops a new business idea of his own—so Verono can’t afford to lose his five-star rating.
But even in the slow lane, pressures build. One day a truck driver flashed his lights to encourage him to speed up. When that didn’t work, the truck started riding the bumper of Verono’s Toyota sedan at 100 kilometres per hour. Suddenly, the frustrated trucker pulled into the left lane, passed Verono, and then changed lanes abruptly to cut him off. Verono had to brake fast. “I thought for sure he was going to hit me,” he recalls.
Just another day in the sharing economy. Always-on Internet connectivity has made it easier than ever to connect consumers with new and cheap products and services. Why stay in a chain hotel when you can rent a room (or a three-story home) through Airbnb or Vrbo? Save on taxi fares by using a ride-sharing network such as Uber or Lyft. Top up your income by renting out your driveway as a parking spot, or pick up a part-time accounting or coding assignment from Upwork or Freelance.com.
The gig economy isn’t really new, says Linda Nazareth, a Toronto-based economist who studies the future of work. After all, the barter economy was matching buyers and sellers long before companies started hiring employees. But the Internet has extended our personal networks so that we can now confidently work for clients we’ve never met, or casually invite a stranger into our car after midnight.
As a result, “sharing” is transforming the economy. A recent study by the Bank of Canada found that 30% of Canadians participate in “informal paid work,” which ranges from driving for ride-sharing services to babysitting and dog-walking. Not surprisingly, the most likely participants are young people and part-time workers.
But the flexibility of the gig economy masks its significant flaws. That same Bank of Canada study found that 50% of “informal workers” report their pay is less than they could earn at a formal job. And 57% said they’d prefer a conventional job, even if the pay was the same.
One key difference is that in conventional jobs, employers share the risks of work with their employees. They create safe workplaces, maintain equipment and offer training, benefits and sick days. Meanwhile, in the gig economy, most workers are on their own. Companies may include certain features on their digital platforms to ensure that workers get paid or allow them to preview customer ratings before taking on clients. But informal workers rarely receive training, personal feedback, business advice or emotional support. Uber operates regional hubs where drivers can speak with company managers, but Verono reports that there’s a long wait to access the service, and working drivers must queue up alongside new applicants.
In effect, the sharing economy has informal workers assuming more of the responsibility for working safely, effectively and profitably. They have little control over their working conditions, and must make their own decisions about working hours, customer service, maintenance schedules, insurance coverage and even how to save for retirement.
In fact, insurance is a key issue for contract drivers. Most personal auto-insurance policies don’t cover ridesharing. So Uber, for instance, offers drivers in Ontario $2 million worth of coverage when they’re carrying passengers on the platform, including third-party liability, coverage for repairs after an accident that is not the driver’s fault, and collision coverage with a $1,000 deductible. Drivers can further reduce their risks by buying additional coverage to reduce their deductible, provide more coverage while they’re en route to pick up passengers, or increase their personal coverage. Uber’s one-size-fits-all solution doesn’t include any benefits if you are injured and require time off.
Nazareth says gig workers are outsiders in an economy built on the assumption that everyone has full-time jobs. Health insurance, parental leave, career planning and retirement savings are just a few pillars of civil society that are generally arranged through a company’s human resources department. “We’re playing catch-up,” she says. “We’re seeing policies slapped on as the economy changes.” She says bringing today’s employment standards into the gig economy remains “a real challenge for government.”
Verono never thought he’d be driving for a living. The hours are long, but he enjoys the people he meets—and he’s making $1,400 a week. Still, he says, safety is a concern. And risk? When asked what he would do if he were injured in an accident, he muses, “I think about it all the time.”