Jennifer Scott, Uber Eats courier and president of Gig Workers United, in Toronto on May 20.Christopher Katsarov/The Globe and Mail
Last July 20, members of the Ontario Workforce Recovery Advisory Committee – a panel appointed by the provincial government to study the future of work – met with a group of gig workers, labour advocates and a representative from Uber Canada. UBER-N
It was a rare occasion when union activists from Gig Workers United were in the same (virtual) room as an Uber lobbyist. For years, both camps have been fighting a battle about whether gig workers, such as delivery couriers and ride-hailing drivers, should be considered employees and granted the rights that come with that designation under provincial law, or remain classified as independent contractors.
The meeting was the single opportunity all sides had to voice their concerns in the presence of each other before the panel made recommendations to the government which would end up heavily influencing labour legislation in the province.
Uber to reportedly scale back hiring, reduce expenditure on marketing and incentive activities
Ontario’s minimum wage for gig workers faces mounting criticism
“I felt uncertain about Uber participating in that roundtable because we had Uber workers attend as well. We were sensitive to that,” said Vass Bednar, a public policy expert at McMaster University and panel member. “But everyone had an equal chance to speak, and Uber was not swashbuckling in saying, ‘Here’s what we want.’”
The stakes were high for all groups. The panel had just six months to write a final report.
“We were only invited to attend the session at the last minute,” recalled Jennifer Scott, an Uber Eats courier and president of Gig Workers United. “I was nervous because I knew whom I was up against.”
At the meeting, Uber’s manager of public policy, Jake Brockman, made a pitch that the committee consider an employment model for Uber drivers adopted in the United Kingdom in 2021. They are designated as “workers,” a cross between an independent contractor and an employee. Workers get minimum wage for the time they actually drive passengers, as well as holiday pay and a pension plan, and retain the flexibility of being able to use the app any time they want.
Ms. Scott, Gig Workers United and other union groups such as the Ontario Federation of Labour are vehemently opposed to this third way of classifying gig workers. They call it a cop-out that gives incremental benefits to drivers under the guise of a more progressive way of categorizing gig workers, while Uber and other companies maintain control over their wages and how they work.
What ensued over the next 10 months was everything the labour movement was fundamentally against. The OWRAC report was released in December, 2021, and contained the critical recommendation that Uber had pushed for – creating a separate category of workers called “dependent contractors” who would have some employment rights, such as termination pay and a minimum wage, but still not be designated as employees under the provincial Employment Standards Act.
That was a crucial win for Uber and other delivery platforms such as SkipTheDishes, DoorDash and Instacart. Aspects of Ontario Premier Doug Ford’s new Working for Workers Act 2022 (Bill 88), which received royal assent in April, drew heavily from the report’s suggestions. Even though the law did not explicitly create a separate class of dependent contractors, it gave the impression of enhanced rights for gig workers, while maintaining their status as independent contractors.
Indeed, the story of Uber versus gig workers in Ontario is a microcosm of a continuing global battle over the rights of a growing new class of workers – a class that has emerged only in the past decade, birthed by the technological prowess of Silicon Valley, and whose livelihoods are governed by algorithms.
It is a three-way tug of war between Big Tech, which has been allowed to operate in an unbridled fashion for years and is determined to maintain the status quo; policy makers and regulators who are scrambling to keep up with technological change; and labour advocates who are vehemently opposed to the erosion of worker rights in the name of flexible work.
“These tech companies, from Uber to Amazon, have rapidly changed consumer expectations around speed and service,” said Veena Dubal, professor of law at University of California, Hastings. “If all you have to do is click a button on your phone and a really cheap ride shows up in the form of an immigrant worker, it’s so easy and you get addicted to it, right?”
The story of Uber versus gig workers in Ontario is a microcosm of a continuing global battle over the rights of a growing new class of workers.Christopher Katsarov/The Globe and Mail
Gig work has grown rapidly in Canada. Before the COVID-19 pandemic, approximately 1.7 million people, or 10 per cent of the labour force, defined themselves as gig workers, according to Statistics Canada. Half said they worked on digital platforms to supplement their income, and half said gig work was their sole source of income.
Uber says it has about 100,000 drivers and delivery couriers in Canada who work for its ride-hailing platform and its food delivery platform, Uber Eats, as of 2022. The company operates in 140 municipalities across nine provinces, and Toronto is its biggest market.
From the summer of 2021 right up until Bill 88 was passed, Uber lobbyists met repeatedly with federal and provincial policy makers and stakeholders, in an effort to obtain some kind of legislative guarantee its drivers and delivery couriers would not be redefined as employees, according to conversations with three former and current government officials, and three former Uber lobbyists.
The Globe and Mail spoke to these sources under condition of anonymity so they could speak freely and not jeopardize their current employment.
In a statement to The Globe, Uber said it is fully registered and follows all lobbying rules. The company also said because it would be directly impacted by Bill 88, it was often in contact with the Ontario government.
What Uber really wanted, according to sources, was government assurance not only that gig workers would not be reclassified as employees, but that a third category of workers – dependent contractors – would be created and included in Bill 88. Two sources characterized Uber’s campaign in Ontario as an aggressive and relentless government-relations strategy that ramped up last summer until Bill 88 was passed.
Often, one of the sources said, Uber’s lobbyists got frustrated at the lack of response from a ministry, and reached out directly to the Premier’s office. The Premier’s office did not respond to a request for comment about Uber’s lobbying activities.
Some of Uber’s activity was disclosed publicly through Ontario’s lobbying registry. For example, a record dated Oct. 25, 2021, said Laryssa Hetmanczuk lobbied to “help inform the government about best practices of app-based work, as the government moves forward with legislation to support workers in Ontario.”
Ms. Hetmanczuk is a principal at the public affairs firm GT & Company, and was campaign manager for former Ontario finance minister Rod Phillips in his 2018 election bid.
In the face of government scrutiny and a burgeoning anti-Big Tech labour movement, Uber’s playbook had changed in recent years, according to two former Uber lobbyists. If the ultimate goal was still to kill the employee-status designation, the company had to make some concessions, such as health, dental and retirement benefits for workers.
In January, Uber struck an agreement with the United Food and Commercial Workers union that allowed drivers and delivery couriers to seek union representation in disputes with the company. On Feb. 8, both groups sent a letter to Ontario Minister of Labour, Training and Skills Development Monte McNaughton, proposing a package for “legislative standards for app-based workers.” That letter, provided by Uber to The Globe, outlined two key proposals that were seriously considered or adopted by the government.
First, a benefits fund for workers who complete at least an average of 20 hours of engaged time a week. More time spent on the platform would result in a bigger pool of money for benefits. That month, the Ontario government announced it was studying the idea of a “portable benefits” program geared at gig workers, with contributions from government and the private sector, and benefits administered by an independent body.
Second, an earning standard for workers. Uber called for workers to receive at least 120 per cent of minimum wage for what is called “engaged time” – periods when workers are driving customers or out doing deliveries, but not wait times in between. That proposal, which was also in the OWRAC report, was ultimately adopted in Bill 88, though its terms were slightly different – the government proposed gig workers get paid the current minimum wage of $15.50 an hour, but only for engaged time. Some gig workers told The Globe that Bill 88 would not increase their wages at all because of the engaged-time clause.
“These were incremental breakthroughs that Uber was making with government and labour groups. They had to do it. But you can see how governments and labour groups ended up adopting what Uber proposed,” said Ms. Scott.
While the bill did not entrench dependent-contractor status, it achieved what Uber was trying to prevent – the classification of workers as employees with full traditional workplace rights.
In a statement to The Globe, Ontario’s Ministry of Labour acknowledged that Uber met with senior policy officials in the development of Bill 88. But it added that actual legislative change was ultimately based on recommendations from OWRAC.
Ms. Bednar, the OWRAC member, said it was disappointing that many people thought the panel’s efforts were just a “pantomime.” Its report was heavily criticized by labour groups, including Gig Workers United. The Ontario Federation of Labour said that the report opened the door to “gutting employment standards.”
“Maybe it wasn’t presented in the best way. But the spirit of what the report intended to reflect was to build more of a floor for workers that are exploited by an algorithm,” she said.
Other experts have more reservations. “The problem is, the bill had no material impact on workers. It did not meaningfully change the playing field for them and it entrenched the status quo for Uber and other gig platforms. It was a clear win,” said Ryan White, a labour lawyer with the Toronto-based firm Cavalluzzo LLP. Mr. White has spent much of the past year defending Saurabh Sharma, an Uber Eats courier in Toronto, in a dispute regarding his classification as an independent contractor.
Uber has never shied away from the fact that classifying drivers and delivery couriers as employees would be the death knell of its business model. “Our business would be adversely affected if Drivers were classified as employees instead of independent contractors,” chief executive officer Dara Khosrowshahi told investors in a company filing just before Uber went public in May, 2019.
“Employee status in most jurisdictions means that workers will be covered by the applicable minimum wage laws, and that the employer will pay the employee share of benefits like social security and unemployment insurance. That will cost Uber greatly,” said James Parrott, director of economic and fiscal policy at the New School in New York.
In March, 2021, the United Kingdom Supreme Court ruled that all 70,000 Uber drivers in the country be reclassified as workers, entitling them to minimum wage (for engaged time), vacation pay and a pension plan. Drivers were awarded vacation pay based on 12.07 per cent of their earnings, and Uber was asked to contribute 3 per cent of a driver’s earnings to the pension plan.
Uber acknowledged the ruling would be costly, although mostly from vacation payments and pension contributions, rather than the minimum wage. Company filings show the decision cost Uber US$600-million in the first quarter of 2021. London is, by far, the company’s most important market in Europe and accounted for 6.4 per cent of all Uber mobility bookings in the fourth quarter of 2020, public filings show.
Still, the company’s revenue has grown over the past five years. Uber generated revenue of US$17.4-billion in 2021, compared to US$11.1-billion in 2020. Part of that revenue jump was because of the remarkable success of Uber Eats during the pandemic. In fact, Uber generated more revenue from food delivery than ride-hailing in 2021. Its ride-hailing revenue, while improving, has still not recovered to prepandemic highs.
In the company’s most recent earnings call, an analyst, James Lee of Mizuho Securities, expressed trepidation over looming regulatory battles over the status of its workers, specifically a continuing dispute in New York State similar to the one in Ontario.
But Mr. Khosrowshahi was adamant. Uber drivers, he said, want to be independent contractors. “You can work for us, you can work for competitors, you can work when you want, where you want. It’s pretty powerful,” he said, while declining to comment on the brewing battle in New York.
For many drivers and delivery couriers, however, one of the biggest problems with independent contractor status is that the apps do not actually give them the independence they want. They can’t negotiate or control their wages. Pay is determined by the platforms, based on several factors, such as time, distance, and the number of drivers and delivery couriers at any time in a particular area. And that formula changes.
“Workers use multiple apps because none of these apps pay them sufficiently. This is a response to precarity,” said Joshua Mandryk, a lawyer at Goldblatt Partners who works closely with unions and other pro-worker groups.
“You never know what the algorithm is going to do on any given day,” said Spencer Thompson, a former Toronto-based Uber Eats courier who had been working for the app for five years until late 2021. In late 2020, after noticing a decline in his wages after the start of the pandemic, even though Uber Eats was growing in popularity, he started keeping track of his pay. The drop was significant – a decline of 60 per cent a delivery, before tips in December, 2020, versus January, 2020.
Mr. Thompson claims Uber realized customers were tipping more in the pandemic and lowered the base fare it paid drivers and couriers. “For the majority of time I was doing deliveries for Uber Eats, people would not tip, because the app would not prompt customers to tip,” he said.
“Then sometime around 2019, Uber changed the design of the app so that customers would be prompted to tip by percentage, instead of a dollar amount of $2 or $4 or $6. That really increased our overall wages,” he said, adding that it was normal to take home about $30 an hour on a busy evening.
Uber often sends its drivers and delivery couriers contracts and amendments that are pages long via e-mail. Workers must agree to them or risk being deactivated from the platform. Ms. Scott, who has been an Uber Eats courier since 2017, said she’s received nine contracts and addendums to contracts.
The Globe reviewed all nine. In none of them are drivers and delivery couriers given a clear indication of how their wages are actually calculated.
What the contracts consistently state is: “The Delivery Fee includes amounts based on distances estimated to be travelled, time estimated to be spent travelling, and estimated wait times at pick up and dropoff locations which may be based upon an efficient routing. It also includes any applicable additional amounts based on attributes such as supply and demand (e.g. surge amounts or boost multiplier).”
In all contracts, Uber reserves the right to change the delivery-fee calculation at any time based on “local market changes.”
“Figuring out how much you are going to get paid for a night of work is like a game,” said Nav, an Uber Eats courier in Brampton, Ont., who wanted to be identified by a nickname because he holds a second job and is not allowed to speak publicly about also working for Uber.
Nav spends hours on Reddit forums with other delivery couriers figuring out what areas of Toronto, Brampton or Mississauga could be in “surge” or “boost,” meaning couriers would get an extra few dollars delivering in that area.
Sometimes, Nav says, you’d get a “surge” or “boost” notification and by the time you got to the area, it would be gone. “It’s all about the speed you work at. The faster you bike, the faster you drive, the more orders you do, the app will continue giving you work,” Nav said.
In April, just after Bill 88 received royal assent, Aasish Chowdary, an international student from India and a part-time courier on Uber Eats, noticed the number of orders he received had declined dramatically. Mr. Chowdary was a delivery walker – he did not own a bike or car and delivered food in downtown Toronto by foot.
“In two hours of work, I used to get five or six orders. Now I’m getting one or two,” he said. Then he started seeing threads on Reddit and Twitter in which other walkers complained they had experienced a decline in orders. Mr. Chowdary ended up taking on a job as a dishwasher in a restaurant, which paid him a consistent minimum wage for hours worked, but no tips.
The Globe sent Uber a list of questions about how it calculates wages for workers, whether workers experienced a decline in earnings in 2020 and why delivery couriers on foot in the Toronto area are getting fewer orders.
In an e-mailed response, the company said its base fare is determined on estimated travel distance, estimated travel time and estimated wait time at pickup and drop-off locations, which is based on “efficient routing.” The company also said that how busy a delivery person is depends on how many customers are ordering.
Uber repeatedly emphasized that most of its app workers enjoy the flexibility of using Uber and Uber Eats because they get to control “where and when they work” and are free to use other apps besides Uber. “89 per cent of drivers and delivery people say they need the flexibility provided by platforms like Uber – which is why over 23,000 have signed a petition and 2,800 have emailed their MPPs to ask for reforms,” Uber said in the statement referring to an internal petition the company sent out regarding their Flexible Plus benefits program. “We will continue to support these important efforts to modernize labour laws so that drivers and delivery people receive benefits and protections they need while maintaining the flexibility they value,” the statement added.
While Bill 88 falls short on the minimum wage issue, in that it doesn’t pay workers for idle time between deliveries and rides, it attempts to address the power imbalance on the issue of pay transparency. The platforms should provide a description of how pay is calculated. They should also disclose details about any performance rating system, as well as how the platform determines how many work assignments it offers couriers and drivers.
But enforcement of the legislation is key, and will determine how much power tech platforms really have over governments, said Mr. White, the lawyer from Cavalluzzo LLP.
“Uber’s business model, and that of so many other big tech companies, is built around downloading costs to the individual worker. That’s exactly what they are doing with their position on minimum wage and the push for dependent-contractor status,” he said. “Once you begin to chip away at the notion of what an employee is, you get exactly what Uber is looking for – weaker rights, fewer entitlements. So, governments need to be aware of that.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.