The veil has lifted on Silicon Valley, revealing a culture rife with management and legal problems previously hidden behind the excitement of disruptive innovation. The tech industry finally appears to be taking issues of sexual harassment and gender and racial bias more seriously. The resignations of Uber CEO Travis Kalanick and prominent venture capitalists and the uproar at Google over the anti-diversity memo hint at some increased accountability for start-ups.
But problems in Silicon Valley go well beyond these high profile struggles. Low-wage workers of all genders and race are still getting left behind, even as tech companies re-examine their culture and commit to better workplaces. At Uber, neither years of drivers’ complaints about poor treatment (encapsulated in a video of Kalanick yelling at a driver), nor litigation produced significant changes. It was only when Uber’s white collar, higher-paid employees spoke out that the Board took action.
Tech companies’ paid leave policies provide a stark example of differential treatment. Amazon’s paid leave policy, announced after the New York Times exposé of the company’s appalling working conditions, applied to permanent employees, but left out hundreds of thousands of temporary warehouse workers. Similarly, Netflix offered unlimited paid parental leave for employees in the streaming division, but not hourly workers or those on the DVD side, who do more manual labor. (After public attention, Netflix amended the policy.)
One big factor in the differential treatment is the distinction tech companies adamantly maintain between corporate workers who they consider their employees and everyone else who they treat otherwise – either as independent contractors or employees of someone else, such as a subcontractor or staffing agency. Independent contractors are not entitled to the protections of our federal workplace laws. Companies disclaim any ability to address the challenges of these workers based on a myth that if a company demonstrates any concern for these non-corporate workers that they will be forced by the law to treat them as “employees.”
Nothing in the law, however, compels conduct like Uber’s indifference to drivers’ well-being. It is far from clear that if Uber had taken steps to deal with drivers’ sexual harassment claims that it would have created great legal vulnerability. They could simply ban problematic customers from the app. Similarly, paying higher fare-sharing rates to ensure that drivers have a decent income would not change the legal relationship between Uber and its drivers.
The decision to put Uber drivers in a separate category and deny them the basic protections Uber provides its corporate employees fits within a broader narrative that Silicon Valley revels in – that they are mavericks to whom the normal rules of the road do not apply. A Harvard Business School professor described the tech startup belief system as follows: “We’re different. Rules don’t apply. We’re in a new realm, and we seek total world domination.”
This differential treatment also is fed by how the media covers work-life balance and sexual harassment. The travails of upper middle class, professional women have long dominated the national conversation about these issues. Think Sheryl Sandberg and Anne-Marie Slaughter. Of course, the media is responding to what it believes its readers want – ultimately the public’s disinterest in the lives of low-wage workers drives the lack of coverage.
The most important explanation for why Uber and similar companies feel free to ignore the plight of their low-wage nonprofessional workers is their lack of bargaining power. Unlike engineers and other corporate employees who command skills-based leverage, Uber drivers are a replaceable commodity. Additionally, Uber’s vehement insistence that drivers are independent contractors puts them outside the protection of traditional labor law and prevents them from banding together to gain more leverage.
Nonetheless, there are rays of hope pointing toward more equitable outcomes:
Addressing misclassification: A class of Uber drivers alleging that they are employees and not independent contractors was approved by a judge in North Carolina and will move forward.
Improving labor standards: There is a growing wave of higher minimum wage laws and paid leave laws at the state and local level, such as those in Washington state, California, San Francisco, and Washington, D.C., that offer better benefits for lower-income workers.
Consumer solidarity: Consumers have tremendous power to influence the behavior of platform companies, which are extremely brand conscious. After implementation of Trump’s travel ban when it looked like Uber was trying to capitalize on the taxi boycott, thousands of consumers exercised that influence by deleting the Uber app, forcing the company to quickly reverse course.
Improvements at Uber – Uber has finally recognized its problematic relationship with its drivers, releasing its “180 days of change” campaign directed at drivers, including updates to the app, which have resulted in $50 million in tips just since June. These changes have been criticized, however, as insufficient or misleading.
Why should we care what happens at Uber? As a percentage of the overall workforce, Uber drivers remain a very small slice – roughly .5 percent of the total workforce. If recent events at Uber teach us anything, however, it is that what happens at Uber commands attention unlike any other company. For much of its history, this dominant public role has been for the worse – the company has set the pattern for how to manipulate a business model to minimize labor costs with very little public opprobrium. We can only hope that with the events that brought Uber to the brink of implosion and with Khosrowshahi now at the helm, this dominant public role can be for the better – not only for white collar, professional corporate employees, but for drivers and other workers too.