Uber’s Dangerous Expansion Into Temporary Labor

Uber is at it again. The company is expanding its “on demand” model of precarious work to the temporary staffing business—an industry already notorious for exploitative labor practices. Through its new app Uber Works, which the company launched last month in Chicago, Uber aims to arrange temporary shifts in jobs like bartending, warehouse work, and commercial cleaning. Uber will partner with temporary staffing agencies like TrueBlue, which will employ and pay the workers who obtain assignments through the app. 

Uber is no stranger to outsourcing. Instead of employing its drivers directly, Uber calls them independent contractors, even though Uber controls nearly all aspects of its drivers’ work, including which customers a driver picks up, the route taken to destinations, and the rate for each ride. Unlike the traditional independent contractor—who is making financial investments to sustain and grow her business, negotiating prices with clients, and building a client base—Uber drivers are not, by any stretch of the imagination, in business for themselves. In response to Uber and other companies’ increasing reliance on workers classified as independent contractors, California recently passed a law that establishes a clearer and stricter test for who should be considered an employee.

Instead of employing its drivers directly, Uber calls them independent contractors, even though Uber controls nearly all aspects of its drivers’ work, including which customers a driver picks up, the route taken to destinations, and the rate for each ride.

Now Uber is embracing another form of outsourcing—to labor contractors like temporary staffing firms. Just like hiring workers directly and calling them independent contractors, this type of outsourcing drives down wages and degrades working conditions.

Workers employed through intermediaries like temporary staffing agencies earn less money and endure worse working conditions than permanent, direct-hires. Full-time temporary staffing workers earn 41 percent less than do workers in standard work arrangements, and they experience large benefit penalties relative to their counterparts in standard work arrangements. [1] They are typically relegated to the most hazardous assignments, yet often receive insufficient training and are more vulnerable to retaliation for reporting injuries than workers in traditional employment relationships.[2]

Just like hiring workers directly and calling them independent contractors, this type of outsourcing drives down wages and degrades working conditions.

Along with the erosion in wages, benefits, and health and safety standards, workers hired through temporary staffing firms are especially vulnerable to violations of workplace laws. Temporary staffing agencies consistently rank among the worst large industries for the rate of wage and hour violations, according to a Pro Publica analysis of federal enforcement data.[3] This is because competition among temporary staffing companies is fierce, so these companies—many of which are thinly-capitalized—often illegally cut labor costs to keep their contracts. And temporary workers fear that they will be fired from an assignment or lose out on opportunities to transition to permanent employment if they complain about illegal workplace conditions.

Fortunately, states are taking steps to rein in these abusive employment practices. In 2017, Illinois passed the Responsible Job Creation Act, which requires, among other things, that temporary staffing agencies provide their workers with written notice of the terms of each assignment and keep specific records about each worker, client company, and assignment. If a temporary staffing agency discriminates against its workers or steals their wages, the notice and recordkeeping requirements will ensure that there is a paper trail. And, in 2014, California passed AB 1897, a law that holds host companies—the companies that hire workers through temporary staffing agencies and other labor contractors—jointly liable for violations of wage-and-hour and workers’ compensation laws. The law incentivizes host companies to select responsible labor contractors. It also means that temporary staffing workers can recover damages for wage violations even if their direct employer goes out of business—a common occurrence for staffing companies hit with significant civil judgments—or otherwise does not have the funds to pay them. NELP is pushing to expand these protections to other states.

We all deserve a safe and healthy workplace, wages that support our families and allow us to thrive, and stable and secure employment. Laws like the ones in Illinois and California ensure that working people—regardless of where they work and for whom—have basic rights on the jobs, and that all employers—including Uber and its partner staffing companies—are held accountable for violating those rights. Other states should follow California’s and Illinois’ lead so that we can stop the degradation of workplace standards in the already precarious temporary staffing industry.

Laws like the ones in Illinois and California ensure that working people—regardless of where they work and for whom—have basic rights on the jobs, and that all employers—including Uber and its partner staffing companies—are held accountable for violating those rights.

[1] America’s Nonstandard Workforce Faces Wage, Benefit Penalties, According to U.S. Data, National Employment Law Project, June 7, 2018, available at https://www.nelp.org/news-releases/americas-nonstandard-workforce-faces-wage-benefit-penalties-according-us-data/.
[2] Rebecca Smith & Claire McKenna, Temped Out: How the Domestic Outsourcing of Blue-Collar Jobs Harms America’s Workers, June 10, 2014, at 11, available at https://www.nelp.org/wp-content/uploads/2015/02/Temped-Out.pdf
[3] Michael Grabell, The Expendables: How Temps Who Power Corporate Giants are Getting Crushed, Pro Publica, June 27, 2013, https://www.propublica.org/article/the-expendables-how-the-temps-who-power-corporate-giants-are-getting-crushe