The Federal Trade Commission published a policy statement announcing sweeping protections for gig workers. The new initiative targets “internet-enabled ‘gig’ companies” such as Uber and Lyft participating in anti-competitive practices. According to the FTC, gig workers will generate $455 billion for the American economy in 2022. Moreover, during fears of recession, the gig economy is vital for many Americans to stay afloat. Here’s everything you need to know about the FTC crackdown on companies taking advantage of gig workers.
The FTC says gig workers deserve a fair labor market
“No matter how gig companies choose to classify them, gig workers are consumers entitled to protection under the laws we enforce,” said FTC Bureau of Consumer Protection Director Samuel Levine. “We are fully committed to coordinating our consumer protection and competition enforcement efforts […] to ensure gig workers are treated fairly.”
In July 2021, rideshare drivers went on strike to protest poor work conditions and fight for the right to organize. The Uber and Lyft drivers called for support for the Protecting the Right to Organize (PRO) Act. The divisive bill introduced by Representative Robert C. Scott (D-VA) passed in the House in March 2021.
How will they protect gig workers?
The FTC noted several key areas where “there is potential for harm to workers in the gig economy.” Firstly, app-based gig companies often misrepresent the nature of gig work. According to the FTC, these companies promote a level of independence not offered to full-time employees. However, companies often closely monitor and control tasks.
They’re also evaluating how gig workers can leverage bargaining power. Unfortunately, app-based gig companies offer little to no transparency about when and where work is available or expected performance and evaluation. They also tend to take advantage of concentrated markets and participate in anti-competitive practices that hurt gig workers’ wages.
The FTC says in the press release that they will hold companies accountable for transparency about potential earnings and costs. They’re also cracking down on using artificial intelligence to calculate pay. Just because an AI calculates a pay rate doesn’t absolve companies from labor laws. Also, gig companies can no longer include contract terms that prevent workers from seeking other jobs. Finally, the FTC will investigate wage fixing between gig companies and “exclusionary or predatory” practices that harm workers.
