Bay Area Reporter Investigates the Sharing Economy From the Inside
By Patrick Kruger
(ABOVE) Trautman, in one of many such photos posted on social media to improve his chances of being hired for sharing economy jobs.
The recent explosion of app-based startups—detailed in Spring 2016 Issue 1 by staff writer Louis Do (“Bringing the Business”)—has consumers celebrating new-found convenience and those in the tech industry seeing dollar signs. Known collectively as the sharing economy, companies such as Uber, Postmates, DoorDash, and Instacart (all San Francisco-based) are transforming the service industry in the Bay Area and beyond. With the hype machine at full-throttle behind this apparent revolution, savvy consumers and investors may be wise to tap the brakes—at least enough to ask a few questions.
For the past year, Bay Area journalist Ted Trautman has been doing just that, taking jobs with a host of app-based startups to investigate the industry from the inside. Trautman, 31, holds a bachelor’s degree in English and Philosophy from Wittenberg University and a master’s in Journalism from UC Berkeley. His work has appeared in the New York Times, the Washington Post, and Slate Magazine, among others. Originally from Minnesota, Trautman has lived in Kyrgyzstan, Mexico, and Argentina. He currently resides in San Jose, Calif., where The BCC Voice sat down with him to discuss his latest venture.
I understand you’re working on a book about the sharing economy. What can you tell me about that?
The sharing economy is sort of a myth. That’s part of the argument I’m trying to make, that it’s a patina of newness—which is smartphones and apps and all that—on the very old service economy. People act like it’s a revolution, when really it’s just a slightly more convenient way of summoning someone to clean your house or deliver your lunch.
Do you have other concerns, beyond the possibility that this supposed economic sea change is being exaggerated?
What I think has been overlooked is the impact on workers. These companies—Uber, Postmates, whoever —they package their marketing: “Not only is our service convenient, it’s also a wonderful advance for workers.” They talk about flexibility, and that’s essentially the only argument in favor of it. Here’s my criticism: they don’t have to spend a lot of energy defending the wages—which are often very low—or safety risks, or background checks, simply because the job is flexible, and people want flexible. This shouldn’t be sufficient. Flexibility is a fine thing, but it doesn’t exempt these companies from being accountable to labor regulation, which is something they’ve been actively working against. Labor laws can’t keep up with the industry right now. Companies have found a loophole, which is that, if they hire people as independent contractors rather than employees, the company isn’t responsible for anything. Minimum wage laws don’t apply to independent contractors. That’s being exploited.
That’s the case with Uber, right? They’re all independent contractors. Who else is running on that model?
Pretty much everyone. Lyft (also cars), DoorDash (delivery service), Postmates (delivery). Instacart is one I’ve been paying attention to lately. They are an interesting counterpoint. There are two paths for Instacart workers: you can be an independent contractor like at all these other companies, or you can opt to be a part-time employee, which a lot of people celebrate as a concession to these criticisms. But I think that’s kind of dressed up. Page one of the application to become a part-time employee—they are very explicit about this—states that you will never work more than 29 hours per week. That’s an important cutoff, because it exempts them from having to worry about insurance, overtime, etc.
Have you noticed, from company to company, a substantial difference in the way you’re treated as an employee?
The differences between them are small. For example, at DoorDash and Postmates, you get trained at a rented office space somewhere. Instacart—I think this is a measure of how many people they have to train due to high turnover—they don’t even bother to rent an office. I was literally trained in the parking lot of a Whole Foods. I thought we were meeting at a Whole Foods because we would go into the store. They partner with Whole Foods, so I thought they would show us how to do things in the store. We never went inside.
Yeah. The drop off is steep for any of these companies, not just delivery, but for Uber, for all of them. People work for a couple weeks, maybe a couple months, and then the vast majority disappear because they don’t get paid that well. I’ve found, in general, a willingness to waste workers’ time. If I got a job at a Starbucks or Walmart and I’m getting trained, that’s paid time. Because I’m an independent contractor, that doesn’t happen. The training sessions are unpaid. DoorDash training started more than half an hour late. My first day with Postmates, I went up to a bookstore in Mountain View, and the credit card they gave me wasn’t activated. I was supposed to buy a newspaper, which cost like $2. You get 45 minutes from when you accept an order until delivery, or you get yelled at. I sat in that bookstore for half an hour waiting for them to call me back. I got a bad review and it ended up being an hour wasted.
You couldn’t have paid with your own money and been reimbursed?
I could have paid with my own money.
But you would not have been reimbursed?
No. A similar situation came up with DoorDash. When you order through DoorDash, they have one box for directions for the restaurant, and one box for directions for the driver. So an appropriate direction for the driver would be, “My doorbell doesn’t work.” I get messages in the driver box that are like, “Be sure to get the sauce.” I’m at this wing place, and I was directed to get some sort of sauce, but it cost 70 cents, so they can’t just give it to you. Do I spend 70 cents out of my own pocket to save time? Or, and this is what I ended up doing because I thought it would be interesting to see what happened: I tried calling the customer, who didn’t answer. Then I called the company and asked them what I should do. So they’re like, “Alright, Ted. Hold tight. We’ll call the customer and we’ll figure this out.”
They’re gonna get on this sauce situation as fast as possible.
Right. So I sat there; 30 minutes later my phone rings, and it’s the guy with DoorDash, thinking he was calling the customer. Again, this is half an hour lost just sitting. That’s fine if you’re paid hourly.
You don’t make any money for that time?
No. I’m paid per delivery, and I’m paid $5 per delivery. Usually a delivery takes, start to finish—if you’re absolutely the luckiest person in the world—30 minutes. If that was always the case, $10 an hour, that’d be great—good enough—but more often it comes out to around $5 an hour. That’s the problem.
You also deliver groceries for Instacart. What is that like?
It’s actually harder to buy groceries than you’d think. It’s easy when you’re buying for yourself, but all these little things come up. Maybe there’s a size of ketchup you’re used to and they don’t have it. That’s actually one of the easier things. It’s one thing when it’s kinds of manufactured food, but Instacart gives customers the option to choose the level of ripeness of an apple or an avocado. So here they are, quantifying it in the app, and I have to make these very qualitative judgments, because ripeness is not objective, you know? And here’s the thing that’s really wild—this hasn’t happened to me yet, thank god—but I can bring the groceries to their house, and they can look through and say, “Actually… I decided I don’t want this; I need to return this.” So I have to go back to the store. Again, it’s a per delivery fee, so I don’t get any more money if I have to go back and return things than if they just accept everything.
How are the tips?
Not great. It’s funny, though, with all these companies, a common figure is that they claim you can make up to $35 an hour. Then, underneath that, they’ll say—I’m thinking of DoorDash’s website in particular—“Make $35 an hour and keep 100% of your tips.” First of all, boasting about keeping your tips seems wild to me. Of course you keep your tips; that’s what tips are. Uber has actually withheld tips, and they dealt with a lawsuit. Anyway, the ads make it sound like you’re making $35 an hour plus tips, but you would be really lucky if you made $35 an hour with tips. Frankly, I’ve never come close. I’ve never made more than, I don’t know, $20 an hour including tips.
Does that factor in car-related expenses?
No. That’s just gross.
So you’re not making $20 an hour then, right?
Not at all, no. Gas, maintenance, insurance, parking… and I, um… I park… illegally, a fair amount. Often there just isn’t another realistic option. That’s another thing that frustrated me at that damn bookstore. I parked illegally because I thought, “Well they’re not making it; it’s not a burrito. It’s just there—the newspaper—to pick up.” I didn’t expect to be there for half an hour, and I was parked illegally the whole time. I didn’t get a ticket, but that was a risk. When I worked for Starbucks, in New York, they sent me to deliver something to another store, and I thought it was very respectable that they gave me a subway card, so I didn’t have to waste my money. That’s not how these companies work, in any way.
So is it possible to earn a living working these jobs?
I’ll put it this way: it’s very expensive to live in the Bay Area, but I’m finding that it is possible to pay your rent working these jobs. But, I do think that the companies are very dishonest. What I’m trying to highlight is that, as investors get excited about these companies, workers get screwed over, and because it’s not great for workers, I don’t know if it’s going to grow the way it has been growing. The companies that exist today depend on this incredible flow of people coming through, who then realize that it sucks, and quit. That’s not going to last forever.