The Impact of the Sharing Economy on Precarious Workers

Tara Azizi
SOSC 2211
April 3, 2019
Word Count: 1350
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‘The sharing economy is a cover-up for the devaluation of labour under digital forms of

capital’ (Cockayne, 2016, p. 74). ‘The sharing economy is an economic model defined as

peer-to-peer based activity, providing or sharing access to goods and services through an online

platform’ (Kenton, 2014). It involves people sharing underutilized objects or skills that other

people might be interested in (Kenton, 2014). There are many companies that participate in the

sharing economy in the transportation, accommodation, labour and marketplace sectors.

Companies that participate in the sharing economy include: Uber, Lyft, Airbnb, TaskRabbit,

Ebay and Craigslist. The sharing economy plays a role in the flexibilization and devaluation of

labour in changing work practices and moral values as well as digital forms of labour that are

regularly distinguished by their reinforcement of labour fragmentation and low fixed costs

(Cockayne, 2016, p. 74). Therefore, companies like Uber, form tactics that try to standardize

flexible and precarious work as ethically suitable for precarious workers (Cockayne, 2016, p.

75). The structure of the sharing economy can cause worker precariousness and worsen their

well-being. What is the impact of the sharing economy on precarious work for young Uber

drivers in the Greater Toronto Area?

Precarious work is a nonstandard employment relationship which consists of temporary,

contract-based, and low paid work (ILRF, 2019). Precarious workers fill permanent job

requirements, however they are not compensated accordingly. As a result, precarious workers do

not receive training, health or retirement benefits, social benefits, or worker protection (ILRF,

2019). Also, precarious workers are prevented from joining a union, regardless of whether they

have the right to unionize or not, due to the fear that they are easily replaceable. Precarious

workers are more likely to consist of women, minorities, young workers and migrant workers.
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“Permanent employment across many sectors has shifted to precarious jobs through outsourcing,

use of employment agencies, and inappropriate classification of workers as ‘short-term’ or

‘independent contractors’” (ILRF, 2019).

In recent years, the standard employment relationship is becoming rare. A standard

employment relationship is employment based on permanent full-time status, paying a living

wage, benefits and a retirement plan. ‘The nature of work is now characterized by increasing

automation of industry, declining unionization, the rise of precarious employment, and the

development of the sharing economy’ (Cranford et al., 2003, p. 7). “These trends have propelled

a shift away from the standard employment relationship and towards nonstandard employment

relationships” (Cranford et al., 2003, p. 8). Nonstandard employment includes part-time, casual,

contract/term, on-call, temporary work and self-employment.

The sharing economy has profoundly changed the nature of work to the point that the

work model has shifted from the positions of the traditional employee or independent contractor

(Lewchuk, 2017, p. 2). Sharing economy workers differ from traditional employees so much so

that current legal classifications seem insufficient. A key source of vulnerability for precarious

workers is that they are misclassified as independent contractors rather than employees. The

number of workers misclassified as independent contractors have gradually increased, as

companies have intentionally restructured the work relationship away from the employment

model to escape social responsibilities (Ravenelle, 2017, p. 2). “In Canada, independent

contractors do not receive unemployment benefits, workers’ compensation, vacation, retirement,

overtime, disability accommodation, family leave protections, protection from discrimination or

the right to form unions” (Ravenelle, 2017, p. 2). ‘Uber shifts the risk from companies to
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workers, which weakens labor protections and significantly lowers wages’ (Asher-Shapiro,

2014).

Uber’s profits come from the reliance on a network of drivers who are misclassified as

independent contractors — the company calls them driver-partners — who receive 20 percent of

their earnings (Asher-Shapiro, 2014). Uber argues that help people become small business, when

in reality, drivers are not partners — they are workers exploited by their employer

(Asher-Shapiro, 2014). Uber capitalizes on net revenues by evading payroll deductions and

expensive employee benefits (Anderson & Um, 2015, p. 4) ‘As a result, workers are not given

employee benefits such as health insurance and payroll deductions for employment insurance’

(Anderson & Um, 2015, p. 4). ‘Also, they are exempt from entitlements or protections that the

Employment Standards Act and other labour legislations grant employees’ (Anderson & Um,

2015, p. 4). “Since many benefits (healthcare, pensions) and worker protections (minimum wage,

workplace safety, anti-discrimination laws) are connected to employment status and employers,

classifying sharing economy workers as contractors means they miss out on these benefits”

(Bajwa et. al., 2018, p. 18). ‘The lack of labour protections and regulations for precarious

workers, add more insecurity and uncertainty to their employment prospects’ (Anderson & Um,

2015, p. 5).

Due to their employment status, Uber drivers must have their own car and they are

responsible for all related expenses such as gas, insurance, as well as maintenance. Uber drivers

earn very low wages because they are required to pay for additional expenses and Uber lowered

their prices in order to keep up with Lyft. Uber drivers have no decision making power in regards

to pricing and standard rates because they do not have access to collective bargaining and
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workers interest groups (Peticca-Harris et. al., 2018, p. 12). As a result, in order for Uber drivers

to make a living wage, they must take on more rides per shift and drive as many passengers as

they can (Peticca-Harris et. al., 2018, p. 12). Drivers take all the risks and they are responsible

for all expenses, however it is the company getting rich, by making certain that investors can

capitalize on profits through low fixed costs.

Despite the exploitation and disadvantages of the sharing economy, young workers are

turning to the sharing economy for temporary employment due to their struggle in finding

permanent employment. In the GTA, 25% of sharing economy workers work for Uber and 32%

are between the ages of 18 and 29 (Block & Hennessy, 2017, p. 6). A majority of young Uber

drivers are educated. According to Block and Hennessy, 90% have some post-secondary

education and 43% have undergraduate education. Most young Uber drivers do not envision

themselves working for Uber long-term and consider their involvement with Uber a part-time fix

“until their future aspirations materialize” (Peticca-Harris, DeGama, & Ravishankar, 2018, p.

12). However, this is not the case due to barriers to young workers searching for permanent jobs.

In the GTA, 55% of young drivers stated that Uber is the only way to make a living right now

and 53% said they plan on working for Uber until they can find a more stable job (Block &

Hennessy, 2017, p. 6). According to Block and Hennessy, a majority of young Uber drivers who

have worked for Uber think they’ll still be working for Uber one year from now. “These

responses are indicative of overall labour market conditions in the GTA, including the rise in

precarious work and barriers to young workers searching for secure, full-time jobs” (Block &

Hennessy, 2017, p. 14).

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The social and economic well-being of workers are affected by the way businesses are

developed and organized. ‘Despite the fact that workers are told that they are independent, they

are held to certain behaviour and responsiveness requirements that are set by Uber’ (Ravenelle,

2017, p. 2). Uber’s rating system is used to create trust between workers and clients. ‘However,

it has become a key source of worry and stress for workers, who sometimes feel punished for

factors outside of their control (such as bad traffic)’ (Bajwa et. al., 2018, p. 18). In this case,

drivers must perform emotional labour, specifically surface acting, to regulate the emotions of

clients who may take out their frustrations onto them, by provoking positive emotions in them.

Moreover, ratings can indicate customer bias and prejudice. Uber asks customers to rate their

driver on a scale from one to five stars. “Uber drivers are expected to maintain at least a 4.6

rating (out of 5 stars) and failure to do so can result in deactivation” (Ravenelle, 2017, p. 8).

Consequently, workers feel pressure to lower their rates or offer free refreshments (such as

drinks or snacks) in order to gain a competitive advantage. ‘The need to perform emotional

labour in order to keep customers happy can be taxing and mentally exhausting’ (Bajwa et. al.,

2018, p. 18).

What is the impact of the sharing economy on precarious work for young Uber drivers in

the Greater Toronto Area? The sharing economy capitalizes on workers through the

misclassification of workers as independent contractors or partners. Companies intentionally

restructure the standard employment relationship away from the employment model in order to

escape social responsibilities as well as legal regulations and protections. “In Canada,

independent contractors do not receive unemployment benefits, workers’ compensation,

retirement, overtime, protection from discrimination or the right to form unions” (Ravenelle,
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2017, p. 2). ‘The lack of labour protections and regulations for precarious workers, add more

insecurity and uncertainty to their employment prospects, especially for young workers

struggling to find stable employment’ (Anderson & Um, 2015, p. 5). In the sharing economy,

workers are exploited because companies shift away from the standard employment relationship,

misclassify employees as independent contractors, which shifts the risk from the companies onto

the workers.
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References

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Out on a Limb​, 1-14. Retrieved from

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How-the-sharing-economy-impacts-health-.pdf

Asher-Shapiro, A. (2014, September 19). Against sharing. Retrieved from

https://www.jacobinmag.com/2014/09/against-sharing/

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understanding of workers’ experiences in the global gig economy. Retrieved from

https://www.glomhi.org/uploads/7/4/4/8/74483301/workers_in_the_global_gig_economy

.pdf

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Cranford, C. J., Vosko, L. F., & Zukewich, N. (2003). PRECARIOUS EMPLOYMENT IN THE
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ILRF. (2019). Precarious work. Retrieved from https://laborrights.org/issues/precarious-work

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