On-demand delivery and ride-hailing companies like Uber, Lyft and DoorDash have been campaigning for years for the legal right to treat their drivers as independent contractors rather than employees.
Last month, California’s Proposition 22 — which was the most expensive ballot campaign in the state’s history when it went to a public vote in 2020 — was upheld by a state appeals court. The law could have transformative effects on the growing gig economy.
One such effect that Prop. 22 enshrines is that ride-hail drivers are not entitled to a guaranteed minimum wage. Veena Dubal, a professor at the University of California College of the Law, San Francisco, conducted a study on how ride-hail drivers are compensated. She found that the companies use data they collect about drivers’ behavior to set personalized wages.
Dubal defines this method of compensation as “algorithmic wage discrimination.”
“If they were considered employees, this would likely be illegal,” Dubal said. “But they’re not. And so it’s just not protected.”
“Marketplace” host Kai Ryssdal spoke with Dubal about her study. The following is an edited transcript of their conversation.
Veena Dubal: What algorithmic wage discrimination does is use data that firms have on workers on their individual behavior, on their location. They use that data to determine how much they’re going to pay workers. And so you and I might be doing the exact same type of work the exact same way and at the exact same time, but we get...
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