Gig road to poverty

December 14, 2018

From the November-December 2018 issue of News & Letters

Los Angeles—One sector of the economy that has been growing in recent years is the gig economy, which increased from 2% of GDP in 2013 to 5% in 2018. Half of these gig economy workers are in on-demand jobs such as Uber, Uber Eats, Postmates and Lyft. Contrary to the boosterism that we always hear from Trump, an MIT study revealed that on average a driver’s income declined last year from $1,469 per month to $783, a drop of 47%.

This never gets included in a Trump text claiming that the economy is the greatest in history. Neither does the fact that those workers have to provide for their own safety net: unemployment, pension, sick leave, and medical costs, which are under constant attack by the Administration and the Republican Party.


The MIT study, focused on 1,100 Lyft and Uber drivers, showed that taking into account their cost for fuel, insurance, maintenance and repair, their net income is $3.37 per hour. The result is that, “74% of those drivers are earning less than the minimum wage in the state they operate.”

At the same time, Uber just raised $2 billion on the bond market in October, on the basis of the surplus value created by the workers. These facts do not jibe with Trump bragging about job growth.

By claiming that “the growth in on-demand work is driven in large part by people who use platforms like Uber on the side,” Uber presents whatever their drivers net as pure gain, not to be compared to a full-time worker’s need to support a family.

The MIT study explains that “a more appropriate metric is to focus on would-be average hourly earnings which have remained steady over time.” According to an Uber driver, “70-80 hours per week is necessary to make Uber as the first job.” Another said, speaking about the effect on the worker’s health, “I cannot walk after working 10-12 hours per day, including weekends.”

The “part-time” workers usually work until midnight during the week and through the night on the weekend to provide for their families. With the minimum trip earning $2.62 per ride, sometimes working 10 hours per day is not sufficient.


Growth of this kind of employment is not easing poverty in the U.S. According to a new study, in cities such as Charlotte, N.C., and Atlanta, the mostly African-American residents who had been born into poverty are being bypassed in any job growth since 1990.

Karl Marx stated that capitalist advocates of his day, like Trump today, cannot solve the inherent contradiction in capital which is reaching its limit of exploitation of humanity and nature: “Private property does not know how to change crude need into human need. Its idealism is fantasy, caprice and whim…”

Trump and Uber type corporations are another twist in the history of capitalism—something for the workers to grapple with in fighting for a new human society.


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