There is an interesting video on 'The Rideshare Guy' Youtube channel where two Uber drivers in Chicago sit side-by-side and watch the same journey offers coming in to their account. The drivers are offered completely different prices for the exact same journeys. In the first example, one driver is offered $17.02, while the other is offered $18.82. The same experiment has now been tried in multiple locations and with multiple drivers, and the same thing happens each time: the drivers are always offered different prices for the same journeys. This is what Veena Dubal, law professor at the University of California, has called "algorithmic wage discrimination" in an insightful paper on the topic. "As a labour management practice, algorithmic wage discrimination allows firms to personalise and differentiate wages for workers in ways unknown to them, paying them to behave in ways that the firm desires, perhaps as little as the system determines that they may be willing to accept," Dubal writes.By utilising the personal data history of each driver - including, importantly, what prices they have previously been willing to accept for a journey- Uber can work out what they are likely to be willing to accept for the next job, and set the price accordingly. Of course, other aspects beyond driver data history also go into setting the price, including supply and demand at any given time, but personal data is an important part of the hidden algorithmic calculations which go into forming the price the driver sees on their phone.We have written before on the Gig Economy Project about the introduction of algorithmic wage discrimination, or what the platforms call "dynamic pricing", to the European market. Uber introduced dynamic pricing to the London market in February, while food delivery platform Wolt - which is owned by US firm Doordash - began rolling it out in different European countries in January, sparking a series of strikes. This is a significant tool for digital labour platforms to extract greater value out of their workers, in an economic context where they need to show money markets that they are capable of turning a profit.Indeed, Uber CEO Dara Khosrowshahi has been boasting about the company's data capabilities this week after the company published its Q1 earnings report. "Our global scale affords us a
significant data advantage compared to regional competitors, empowering us to develop
cutting-edge AI that can be trained across larger data sets," Khosrowshahi said, adding: "We are still in the early stages of using large data models to power improved
user experiences and efficiencies across our platform, with much more to come." On a recent conference call with analysts, he said the company's investments in AI and machine learning would allow the company to boost productivity, reduce costs and "surprise and delight".An investor's surprise and delight can be a worker's destabilisation and immiseration. The earnings report shows that the "take rate" at Uber Eats - the average % Uber earns in revenue per booking - grew significantly in Q1, up to 28.9% compared to 23.5% in Q1 2022; the company has ratcheted up the rate of exploitation of its riders by more than 5% in a year. (The take rate in ridehail is harder to analyse because the data is complicated by the confusing accounting treatment of Uber UK.)Algorithmic wage discrimination does not seem to be on the radar of regulators at the moment, but it really should be. It is an affront to the principle of equal pay for equal work, something that women fought for and won a long time ago, and now is threatened by algorithmic-pay systems. There would be a strong case to say that dynamic pricing is already illegal: equal pay for equal work is enshrined in Article 157 of the Treaty on the Functioning of the European Union. Denying workers access to how their pay is determined is also legally questionable: an Amsterdam court found last month that Uber and Ola drivers are entitled to full information on how their pay is set by dynamic pricing systems.As Dubal argues, there is no reason why such personalised pay systems could not penetrate other parts of the economy: "The core motivations of labour platform firms to adopt algorithmic wage discrimination—labor control and wage uncertainty—apply to many other forms of work. Indeed, algorithmic wage discrimination has already seeped into the healthcare sector, impacting how porters, nurses, and nurse practitioners in some hospitals are allocated work and remunerated."We all have a stake in protecting equal pay for equal work. As the old saying goes, each generation must fight for their rights anew.
Ben Wray, Gig Economy Project co-ordinator
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BRAVE NEW EUROPE's yearly crowdfunding pays for the Gig Economy Project's website presence, but staff costs and other expenses are all paid for through grant funds. Unfortunately, our last grant fund from the Andrew Wainwright Reform Trust runs out at the end of May and we have not been successful in lining up new funding yet. If we cannot find any new funding, we will not be able to continue the project. That would be untimely as we feel it is just starting to build momentum. We are always looking for new grant funding opportunities, but we seem to fall between two stools: we are not investigative enough for investigative journalism grants, and we are too media orientated for activist funding. We are hoping our subscribers may have some ideas of where GEP could get new funding from. Even if you think it's a long shot, we would like to hear it. E-mail GEP@BraveNewEurope.com if anything comes to mind.
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Gig Economy news round-up |
- GETIR IN TALKS TO BUY FLINK: The app-based grocery delivery sector may be set for yet more consolidation after the FT revealed that Getir is in talks to buy German-founded Flink. Talks are ongoing and there is no guarantee of a deal. Flink, which operates in France and the Netherlands as well as Germany, is one of Getir's last significant direct competitors in Europe. Turkish-founded Getir bought Gorillas in a €1.2 billion deal in December as the tech downturn led to venture capital turning away from 'Q-commerce', which took off during the pandemic. Flink is currently loss-making but has claimed it will be profitable in Germany by the end of the year. It is set to raise around €100 million in a new funding round which will value the firm at more than €1 billion, half of the €2.1 billion it was valued at after a funding round in late 2021. Both Getir and Flink are backed by Abu Dhabi sovereign wealth fund Mubadala Investment Company. Read more here.
- DELIVERY HERO SETS ASIDE €258 MILLION TO PAY GLOVO FINES: Delivery Hero, the German multi-national which owns a string of food delivery companies, has set aside €258 million for legal costs related to Glovo, the Catalan-founded food delivery platform which it bought at the end of 2021 and is mired in legal battles with the Spanish state. The revelation, which anticipates that these costs will be paid in the next three years, appeared in Delivery Hero's annual accounts. Glovo has refused to employ its riders despite repeatedly losing court cases and being sanctioned by the Spanish labour inspectorate. Those sanctions now amount to over €200 million, and inspections are still ongoing. Glovo had refused to include regulatory financial risks in its financial reports despite racking up fines and back-dated tax contributions for years, all of which it has appealed in court. Deloitte, the auditor, had complained to the company about the lack of information on its legal provisions. Delivery Hero is also setting aside €131 million for legal risks relating to 'anti-competition' practises, after the European Commission conducted raids of company offices in the summer of last year as part of an ongoing investigation. Read more here.
- DANISH TAX AUTHORITY FINDS WOLT COURIERS ARE EMPLOYEES: A four-year investigation has led the Danish tax authority to conclude that its riders should be considered employees for tax purposes. The ruling means the riders will no longer have to declare tax on their earnings, with Wolt required to take care of it on each rider's behalf. Wolt, a Finnish-founded delivery platform owned by US company DoorDash, has said it is strongly opposed to the verdict and will consider appealing. "We see the decision as proof that the development of the modern labour market is simply too fast for the bureaucracy to keep up," Wolt's Danish CEO, Søren Meier Svendsen, said. An e-mail to Wolt riders in Denmark seen by the Gig Economy Project show the company informing riders that it will "withhold taxes from your earnings" from 1 June onwards, adding: "Going forward you will receive your earnings as net income where tax has already been paid." The e-mail goes on to state that the reason the riders will not receive social security benefits like holiday pay despite having taxes taken off their earnings is "because the decision by the tax authorities only covers your tax status...the tax ruling does not mean that you are now an employee of Wolt or that you will become one." Read more here.
- UBER REPORTS $157 MILLION LOSS IN Q1 EARNINGS: Uber published its earnings report for the first financial quarter of the year on Tuesday [2 May], announcing a loss of $157 million, significantly lower than the $5.9 billion loss made across 2022. Revenue was up 29% on the same quarter last year, while gross bookings were up 19% year-on-year, with bookings from Uber's ridehail section growing by 40%. Food delivery revenue outpaced ridehail at the peak of the pandemic, but ridehail has now returned to being the company's major driver of revenue, with $4.33 billion in Q1 versus $3.09 billion for 'Uber Eats'. CEO Dara Khosrowshahi said the company was off to a "strong start" for the year and claimed the company had an advantage over its rival due to its capacity to draw from a comprehensive global set of data. The Californian firm's share price jumped more than 15% following publication of the report. Read more here.
- GLOVO RIDERS IN RURAL AVILÉS WIN IMPROVED CONDITIONS AFTER STRIKE: Riders in the municipality of Avilés, in the Asturias region of Spain, have won improved conditions after Glovo conceded to their demands following a strike on Monday [1 May] which they had threatened to turn into an indefinite strike from next Monday. The collective of around 30 riders had demanded that Glovo, Spain's largest food delivery platform, pay them the same rates as riders in Asturias' urban centres, telling 'La Nueva España' that there was a "significant gap" between pay rates in Avilés, which includes the towns of Castrillón and Corvera, where the base rate is €1.10, compared to the big cities like Gijón and Oviedo, where the base rate is €1.40. "The disproportion is bestial and despite the many attempts to improve our economic conditions, everything remains [the same] as promises are systematically broken", the collective had said. Glovo closed its app in Avilés in response to the strike, and asked that they stop the strike as a gesture of goodwill while they work on an offer to improve the conditions. The self-employed riders did so and while the details of the offer have not been revealed, the collective said it met their expectations. Read more here.
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Ben Wray - May Day: Labour and Platform Capital in Europe
For International Workers Day, Gig Economy Project co-ordinator Ben Wray finds that digital labour platforms are responding to the inflation crisis by finding new algorithmic means to ratchet up the rate of exploitation, but platform workers are responding by forging new forms of resistance.
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- Friedrich Ebert Stiftung will host an online event titled 'Online Platforms, Platform Work and Platform Workers in France, Greece, Italy and Germany: What can we learn from each other?' on 11 May, 3-5pm. Click here for full details and to register.- The Platform Labor Project and the Global Digital Cultures Initiative are holding a hybrid international conference on 'Global Perspectives on platforms, labour and social re-production', at the University of Amsterdam, 27-28 June. Details here.
Know of upcoming events we should be highlighting? Let us know at GEP@BraveNewEurope.com.
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The Gig Economy Project is a media network for gig workers and we welcome contributions from workers, writers, academics, activists - anyone who wants to stand up for workers' rights in the gig economy.
If you would like to write for the site, discuss arranging an interview with GEP, or simply have information about developments in the gig economy in Europe you think we should be aware of, get in touch.
Contact project co-ordinator Ben Wray at GEP@BraveNewEurope.com or send a direct message to the Twitter: @project_gig.
And if you like the Gig Economy Project weekly newsletter, why not get your friends and colleagues to subscribe? Here's the link.
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