Lina Khan-led FTC to stop gig platforms from harming delivery boys

Washington, Sep 16

The Lina Khan-led Federal Trade Commission (FTC) in the US has announced a new policy to tame gig economy companies and platforms in order to protect all kinds of 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 "capitalise 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 DoorDash and Instacart.

But the groups have struggled to make significant industry changes without the legal protections of a conventional union, reports The Verge.

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' (a percentage of customer payments for workers' services), 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.