Lina Khan Led FTC Aims to Tame Gig Economy Companies
WASHINGTON, DC (IANS) – The Lina Khan-led Federal Trade Commission (FTC) has announced a new policy to tame gig economy companies and platforms to protect delivery partners/online cab drivers from unfair contracts, pay and hours.
The FTC approved a new policy by a 3-2 vote, saying that “protecting these workers from unfair, deceptive, and anticompetitive practices is a priority, and the Federal Trade Commission will use its full authority to do so”.
It will continue to “capitalize on its broad jurisdiction and interdisciplinary expertise to combat unlawful practices that harm gig workers”.
Over the last two years, groups like the Gig Workers Collective are addressing the concerns of delivery partners for companies like Door Dash and Instacart.
But the groups have struggled to make significant industry changes without the legal protections of a conventional union.
The rapid growth of the gig economy is made possible by the contributions of drivers, shoppers, cleaners, care workers, designers, freelancers, and other workers.
Gig workers are paid in different ways, including weekly, in “batches” after completing multiple gigs, or immediately upon completing a gig (for a fee).
“Many workers are heavily dependent on customer tips. Gig companies may generate revenue from multiple sources, including a ‘take rate’, customer fees, and commissions charged to merchants,” said the FTC.
Meanwhile, gig companies tightly prescribe and control their workers’ tasks in ways “that run counter to the promise of independence and an alternative to traditional jobs”.
At the same time, gig companies may use non-transparent algorithms to capture more revenue from customer payments for workers’ services than customers or workers understand.
“This dynamic calls for scrutiny of promises gig platforms make, or information they fail to disclose, about the financial proposition of gig work,” said the FTC.
Behind the scenes, ever-changing algorithms may dictate core aspects of workers’ relationship with a given company’s platform, leaving them with an invisible, inscrutable boss.
“Workers have little leverage to demand transparency from gig companies,” the FTC added.