Under Threat at Home: The Driving Gig Economy

February 25, 2020
Local Elections | Tech | The Economy

When upstart app-based services like Uber and others first arrived a decade ago, many hailed a transformation of the economy with greater freedoms afforded to both workers and consumers. Drivers could choose their own working hours, either fitting in shifts to supplement their primary income or even working full-time as a driver. Consumers meanwhile could get around more easily, safely, and cheaply –– thereby avoiding, for instance, the expenses of car ownership and the extreme risks of drunk driving. Some envisioned a world of fewer cars on the streets, fewer emissions, and fewer accidents.

More than 10 years into this experiment, citizens and lawmakers everywhere are re-evaluating the impact of ‘gig economy’ services like Uber on their communities. The ride-sharing company may soon no longer be allowed to operate in London, one of its top-grossing cities, with officials citing safety reasons. Closer to home, a new law, titled Assembly Bill 5, passed in California last year, imposes strict classification standards for contract-work. While the law applies to the entire economy, it poses a particularly existential threat to driving app-based services like Uber, Lyft, and Doordash, as it classifies their drivers as employees rather than as contractors.

If drivers for Uber and Lyft are to be legally classified as employees, they must then be provided with full employment benefits, including healthcare packages and a guaranteed minimum wage. Uber has claimed that its costs in California would increase $500 million a year at $3,625 more per driver with this new law. The staggering increase in cost, if true, would likely be fatal for a company that already regularly reports losses.

Unsurprisingly then, Uber and others are opposing this law at every turn: changing features in their apps in order to meet its criteria for contract-work, challenging its constitutionality in court, and finally collecting signatures for a ballot initiative that would exempt app-based driving services from it. The last and final means at opposition is the most important. As in any democracy, it is the voters who are the ones who make the ultimate decision.

Therefore, in a recent poll of registered voters conducted in California by Redfield and Wilton Strategies, we sought to get a sense of where people stood on this issue. Did these voters think drivers ought to be considered employees or contractors? What did they think consumers and drivers would be affected by this change?

In particular, we asked three questions:

  1. Which of the following statements comes closest to your opinion?
  • Drivers for ride-sharing apps like Uber, Lyft, and Doordash should be classified as employees rather than as contractors.
  • Drivers for ride-sharing apps like Uber, Lyft, and Doordash should be classified as contractors rather than as employees.

2. If drivers for ride-sharing apps like Uber, Lyft, and Doordash are to be classified as employees rather than as contractors, how do you think you, as a consumer of these services, would be affected in the long run?

  • I would have to pay more to use these services
  • I would have to pay neither more nor less to use these services
  • I would have to pay less to use these services
  • I would not be affected, because I never use these services
  • I do not know how I would be affected

3. If drivers for ride-sharing apps like Uber, Lyft, and Doordash are to be classified as employees rather than as contractors, do you think those drivers would be better or worse off in the long run?

  • Drivers for ride-sharing apps like Uber, Lyft, and Doordash would be better off in the long run
  • Drivers for ride-sharing apps like Uber, Lyft, and Doordash would be worse off in the long run
  • I do not know whether drivers for ride-sharing apps like Uber, Lyft, and Doordash better or worse off in the long run

We found that a decent majority of respondents (54%) to our poll preferred drivers to be classified as contractors rather than as employees. Of the 166 respondents who themselves claimed to be or have been a driver for an app-based service, a narrow majority (51.0%) also preferred drivers to be classified as contractors!

When asked how consumers would be affected, a sizable share (41%) believed consumers would have to pay more for such services, with only 5% believing they would have to pay less. As to whether drivers would be better or worse off, a plurality (37%) thought drivers would be better off. Current and past drivers for such services were even more clear cut: 49% thought consumers would pay more while 52% thought drivers would be better off.

As such, our poll presents an interesting contest coming ahead in November. Will voters see this ballot measure as a choice between the priorities of the riders versus those of the drivers? If so, where do their sympathies lie? Are they genuinely willing to pay more so that drivers have the rights of full-time employees? Or do they interpret the ballot measure in a different way?

Whatever happens, this election promises to be a critical, close one on an issue that will have global repercussions. Moving forward, Redfield & Wilton will continue to investigate and to get at the heart of voters’ thoughts relating to Uber and other parts of the gig economy.

To find out more information about this research contact our research team. Redfield & Wilton Strategies is a member of the British Polling Council and abides by its rules.