Modern Indentured Servitude in the Gig Economy

Automation, Risk, Liability, Power, and the Vulnerable

Given this landmark case, perhaps autonomous vehicle (AV)-based ride-sharing services of the future will simply put a human in the “driver’s seat” to negate liability. The possibility of a whole taxi fleet being switched off if the software was deemed the primary cause of a collision would be too high. It is likely that such backup driver humans would be paid below the minimum wage—maybe even less than taxi drivers earn today because they will not even be physically “driving” but simply “watching.” This precautionary arrangement could potentially save the AV companies tens of millions of dollars in litigation in the longer term as self-driving cars proliferated.

This is not the only autonomous vehicle-related fatality that has been recorded [5], but it received great attention because the woman who was killed was a pedestrian who also happened to be unhoused. Police authorities, Uber, and the media positioned the case as a driver versus pedestrian matter. In fact, the machine, and those who developed the machine, should have been understood as responsible.

In a corporate-spawned wave toward fully autonomous vehicles—one that is occurring amid the Gig economy unfolding across the United States and internationally—individuals, typically the most vulnerable, including racial and ethnic minorities, have been swept in to take the fall for deaths, gross negligence, and fatal errors in planning and design. Vasquez, of course, was formally prosecuted and vilified [6]. Uber, despite acknowledgment that their software failed to perform as it should have, escaped any criminal liability. In the case of those who bore the brunt of the fallout and consequences of the Uber AV crash and for Elaine Herzberg’s death, the ethnicity of the safety driver cannot be dismissed. As Vasquez noted in an interview, “one day I’m fine and next day I’m the villain” [7].

No one is discounting that Uber was “at fault.” But a corporation cannot go to jail, despite that the legal notion of “corporate personhood” determines that a corporation has at least some rights and responsibilities enjoyed by a natural person [8]. What is seemingly unfair is that corporate personhood allows for gross profiteering but somehow does not apply equally to responsibility.

We know that despite Uber’s sensors detecting “something” in the way of the AV, the “object” (in fact, a human subject—Elaine Herzberg) was determined to be a false-positive. This occurred because Uber’s engineers had worked to create a better driving experience for passengers and so made the software “less sensitive.” Perhaps, the most telling part of the tragic event was that Uber had decided to disable the vehicle’s factory-installed emergency braking system that would have kicked in automatically, in favor of testing its own automated driving system. As one commentator noted, “when prosecutors need a target in the name of public accountability, it is the ‘servants’ who often pay the price” [9].

People as Dummies: The Human Uber

The Oxford Dictionary definition of a “dummy” is a model or replica of a human being. That is, an object designed to resemble and serve as a substitute for a real person. I would like to propose that the manner in which humans are being treated by the chief architects of the Gig economy is as if they were dummies. Thus, we can speak of “human dummies,” despite that humans are subjects with hearts that beat, the ability to feel pain, and connectedness through social relations that come with responsibility and the need for a genuine livelihood. In 2018, the concept of the “human uber” was coined in Japan, offering a service that “would essentially allow customers to hire a living, breathing human to walk through the world in his or her stead” [10]. Only in the context of the taxi industry? There is no “direct” hire, allegedly the driver is their own boss.

Unsustainable Business Model: The Broken Promises of Gig Economy Companies

While corporations like Uber pursue intensified vehicular autonomy, that which has lured so many workers to the Gig economy in the United States has been hope in the American dream through the promise of ongoing employment [11, 15 min 20 s]. In part, jobs driving Uber taxis have been made possible by a seemingly viable business model that became unsustainable all too quickly. Drivers were told they could work for a ride-hailing company like Uber, and they could choose to work whenever they wanted. But what drivers were not told upon signing up, or on leasing or buying a new vehicle to drive for Uber, is that their per mile and per minute rate would be slashed without warning, not once but consecutively. Drivers were not told that they would be left to fend for themselves if things did not go according to plan and the business model became nonviable. There was no speculation that the market would become saturated, that more vehicles would be on the road than demand required, and that the existing Yellow or Black Taxis would have their medallions and taxi license plates rendered almost worthless as a result of a deregulated taxi and limousine market [e.g., New York City (NYC)]. Figure 1 provides data showing the impact of ride-hailing services on the demand for Yellow Taxi Cabs and the corresponding value of medallions.

Taxi Drivers Operating at a Loss and Living in Debt Bondage

According to driver self-reporting, if you are working for Uber in Florida, Arizona, Indiana, or Oklahoma, for example, where incumbent Yellow or Black Taxi Cabs are still widely in use, then you are earning somewhere between $ 0.54–$ 0.56 per mile and $ 0.08–$ 0.10 per minute [12]. These numbers are debatable and have been anecdotally reported as being even lower. According to one website, the average Uber driver’s hourly pay in Phoenix is approximately $ 12.81, which is 18% below the national average for Uber taxi drivers U.S.-wide [13]. Some drivers are self-reporting that about half of that number is a more accurate hourly estimate when one considers that cars do not run on empty tanks (especially given the rising cost of fuel), that some cars are lease vehicles, that back-to-back rides are becoming more and more difficult to secure with rising numbers of unregulated taxis vying for the same customer base, and considering rising car insurance premiums, not to mention depreciation as linked to the daily wear and tear of a vehicle if owned outright (see Figure 2).

An unexpected car accident to any ride-hailing driver today whose sole income is as a driver can be financially catastrophic, and if coupled with illness, such as long-term COVID, can be irrecoverable to the point of continual loan refinancing. And for taxi drivers in similar situations it can mean imminent foreclosure, foreclosure (i.e., medallion repossession), or bankruptcy. Some websites claim that if you work for Uber in Phoenix, then you can earn on average $ 41,639 per annum, 1% below the U.S. national average income for Uber drivers [14]. These numbers might be possible if a driver doubles their work hours and chooses to be on the road for 12–16 hours a day, seven days a week, and importantly, if they own their own vehicle. But that is no way to live. The choice to work is illusory: to all intents and purposes, that is being enslaved. One driver posted on October 19, 2020, “Can anyone else tell me how they are going. I’m working nearly 12 hours every single day just to make 150-ish a day. I’m on the verge of losing everything. Between car rent and food, I have nothing left and that’s not even paying tax” [15]. Many drivers shifted to delivering food during the pandemic (e.g., Uber Eats) as business was down for taxi services due to lockdowns worldwide, and others suggested diversifying by adopting multiple apps as required to boost income.

When Uber began its promotional advertisements for drivers, they implied in television commercials that representative ride-hailing trips could earn the driver as much as $80–$432 and noted that the average car was not a car but a “four-wheel money-making machine.” Uber encouraged people to “get [their] side hustle on,” above and beyond their day job [16]. According to Andy Gonzalez, an NYC driver, Uber slashed their rate, “not only once but two times. So just to give you a comparison, the rates that we have now, are less than half of what we used to have … actually? They are less than a third” [16, 26 s]. That Uber drivers never really get to see the “real” consumer price charged was dubious from the very beginning. As reported by PBS.org, given the influx of “for-hire vehicles” in NYC from 50,000 in 2011 to 130,000 in 2018, about one-third of ride-hailing vehicles in Manhattan are unoccupied during daytime hours. Furthermore, Uber and Lyft dual taxi driver Gonzalez noted, “you can go 30–40 minutes without a passenger, and when you do get somebody, you’re driving 7 minutes to get them, and the ride will only be like $6. So you just spent 1 hour and 20 minutes and you make $6 minus your gas, so you are really operating at a loss” [16, 1.40 min]. This is a far cry from Uber’s initial advertising campaign that stated, “earnings of $5,000–$6,000 per month guaranteed” [17, 2.46 min].

Driver Depression and Suicide: “I am Not a Slave and I Refuse to be One”

The truth of the matter is that no one should be driving 12–16 hours per day. The physical toll on the body is too much, causing chronic lower back pain and other medical conditions, and this does not take into account the psychological toll it takes to drive for that time frame every day without the ability to stop, eat, and take bio-breaks [18]. Since the original disruption of ride-hailing companies on traditional taxi and limousine offerings, individual drivers on both sides have been struggling, not only to somehow make ends meet, but also with their own mental health. In the first half of 2018, eight drivers in New York alone suicided [19], [20]. One taxi driver, Douglas Schifter, who was a victim of economic disruption and took his own life in front of City Hall, left a 1,700-word note on Facebook [21] on February 5, 2018, pronouncing, “I cannot survive any longer with working 120 hours! I am not a Slave and I refuse to be one” [emphasis mine]. He wrote furthermore:

“Companies do not care how they abuse us just so the executives get their bonuses … Due to the huge numbers of cars available with desperate drivers trying to feed their families, they squeeze rates to below operating costs and force professionals like me out of business. They count their money, and we are driven down into the streets we drive, becoming homeless and hungry. I will not be a slave working for chump change. I would rather be dead.”

One taxi driver, Douglas Schifter, was a victim of economic disruption and took his own life in front of City Hall.

Schifter’s death sent shockwaves through the community of NYC taxi drivers [22], [23]. The names of the other drivers who took their own lives were Abdul Saleh, Alfredo Perez, Danilo Castillo, Fausto Luna, Nicanor Ochisor, Roy Kim, and Yu Mein Kenny Chow. Each had their own story to share, and their own families to provide for, but it all became too much.

In another distressing interview with a surviving taxi driver who “won” one of the last medallions sold in 2014 in NYC for a whopping $853,786 we learn about predatory loan shark agreements on vulnerable migrant workers. Investigative reporter Brian Rosenthal and Emma G. Fitzsimmons, who specializes in transportation for The New York Times [23], blew the cover on some very shady dealings, at a time when medallions were plummeting in value and yet still being sold. Mohammad S. Hossain, unknowingly entered into one of these agreements to repay $717,000 in just three years and just six loan repayments, when his annual taxi earnings were just $25,000. Asked by Rosenthal in 2018 why he had not filed for bankruptcy yet, Hossain replied with broken English and a dejected spirit:

“I bought medallion from the City, I thought City will help me, you know … I know so many drivers, they kill themselves. But I have a family, I love my family. So I don’t want to kill myself. My life is more important for my family. I love my family, [more] than medallion” [16, 5 min].

Spiraling into Poverty, Homelessness, and Sleeplessness

As people began to sink deeper and deeper into debt as a result of the impact of COVID-19 on the demand for taxis, loan repayments for traditional taxi medallions or weekly Uber lease vehicle costs became impossible to pay back. For example, according to The Guardian, the average debt on a NYC taxi medallion in late October 2021 was about $600,000 with the average monthly repayments around $4,000 [42]. No matter how long one was out either driving or waiting to secure a ride, even if a driver went without sleep for 24 h, revenues could never surpass the operational costs, inclusive of one’s labor. It is not uncommon for some ride-hailing drivers to live in their cars at least for part of the week to make ends meet. Terri White, believes it is a lifestyle choice for her, allowing her not to be stuck behind a desk. She chooses to leave her home in Stockton, CA, USA, and drive 83 miles to San Francisco [16]. She also chooses to sleep in her car for a few days in a row, heating up her food at gas stations. While Uber allows drivers to work more than 14-hour workdays, competitor Lyft does not.

Anecdotal evidence from Tempe, AZ, USA, for example, demonstrates the dilemma for many individual taxi drivers who rented a vehicle from the Yellow Taxi Cab company at $260 per week in 2018. At a cost of $7 for seven miles of which the Yellow Taxi Cab would also take a commission for that ride, it does not take long to calculate what is possible in any 10-hour driving period. Some workers purportedly only made about $50 a day “cash in the hand,” some have publicly reported that that figure was much less. Now if that figure is multiplied over seven days, it is at best $350, minus the cost of the taxi rental, leaving the driver with some $90 for their total living expenses. When the author of this article asked people “why they drove,” the response was always akin to “because even if I make close to nothing, I can tell my kids I have a job.” But is this what we should be teaching the next generation? These drivers feel stuck, like there is no way out of the cycle of poverty, and do not know how they will break with this cycle given the daily demands.

The scenarios are similar for up-market vehicles in NYC leased from Uber at about $500 per week. Plummeting customer demand for taxis, meant that lease vehicles became impossible to repay and there was no “escape clause” in the contract. About 80% of app-based drivers in NYC have acquired a car to participate in the ride-hailing business [43, 2 min 29 s]. “Abraham,” a person of color and a father of four, is one such Uber driver who reflected sorrowfully:

“I’m hungry, I’m sad … we’re making probably $5–$6 an hour probably … how can it be a $60 billion company don’t take care of the people … We make you rich, you make us homeless” [44, 1 min].

Abraham showed evidence of working 63 hours and 25 minutes in a single week and only made $ 350.16 and of that Uber took $262.01 in fees toward the leased vehicle, having not met the weekly repayment. Bhairavi Desai who has spoken on the rights of the NYC Yellow Taxi Cab drivers summarizes all of this as setting a horrible precedent for millions of workers both in the United States and beyond. Desai is right in her summation that there must be a minimum wage of $15 per hour for these taxi workers, otherwise we are diminishing one’s right to a living wage.

For many years, only minor accommodations for taxi drivers were made, with some sporadic hardship packages being offered by City Hall in New York. It was not until November 2021, when many workers became so desperate that they went on a hunger strike for 15 days and that the New York City Taxi and Limousine Commission was finally forced to act to implement a more significant rescue package for drivers toward debt relief [45]. Marblegate purportedly reduced all NYC taxi medallion driver debts to a $170,000 cap, with the city also contributing $30,000 [46]. In a crazy twist to an almost unbelievable story, in March 2022, Uber added 14,000 Yellow Taxi medallion drivers of NYC to their Uber app [47]. The real question is how this latest “gesture” has improved the situation of all drivers? It just seems to be more of the same, further disruption, with drivers still not any better off than they were before the Uber announcement. Devastatingly, and on reflection, did so many thousands of taxi drivers have to go through this anguish and ordeal?

But there is a more significant reason that no one cares to answer this and many other questions. It is that before too long, Uber is betting they will not need any more “human drivers.” They will just need “human dummies” or “human ubers.” The case of Rafaela Vasquez in Tempe, AZ, USA, was inevitable and has set a precedent. As I reported back in 2016, in an editorial titled: “When Uber Cars Become Driverless: ‘They Won’t Need No Driver”’ [48], the debts can keep rising. The drivers can keep wishing to drive longer hours and earn more money, and the apps could amalgamate all human taxi driver plates/medallions together, because the Gig companies are betting that the self-driving industry will take off—at least that is what they are praying for, to evade going bust themselves [49]. In other words, BigTech can come in and wreak havoc with an indirect takeover of the medallion system, while driving their own stock up and creating a new monopoly, squeezing the incumbent out. Now that is some form of disintermediation.