DURHAM, N.C.– There is a role for credit unions in serving members who work in the gig economy, and it begins with understanding what those workers don’t understand, according to one person.
Citing Uber and Lyft drivers as an example, Alex Rosenblat told credit unions gathered here that they are representative of the broader spectrum of gig workers at large.
“Drivers often start out this work with very little understanding how to run a business,” said Rosenblat. “Many drivers in their early days will echo the advertisements when it comes to how much they are earning, which is not accurate. What they think they are taking home, they are not taking home.”
That creates financial stresses for members that a credit union needs to be aware of in order to provide assistance—assistance many of those members may not realize they need, said Rosenblat, who is a research lead with the Data & Society Research Institute.
Her comments came as part of a presentation during Filene’s big.bright.minds conference here.
Help During Tax Season
Rosenblat said many of those members/gig workers especially require guidance during tax season, when they are often unaware of all the expenses they could deduct or that there are mileage-tracking apps that can help them in that regard.
She noted this isn’t just true of Uber/Lyft drivers, but other gig economy workers such as those who operate Airbnb accommodations.
Some Insights Into Uber
Rosenblat, who studies the future of work and automation, has spent extensive time studying Uber and is author of the book “Uberland,” and she shared some insights around what it is like to drive for Uber, as well as what it means for the broader employment market:
- Rosenblat noted Uber/gig economy jobs are often promoted as entrepreneurship for the masses, with lots of claims around what technology can do for society, and the assumption technology always produces a brighter future. But that’s often not the case, she said.
- Many of the claims Uber made around earnings proved to be false for many. “But it generated a promise of an expectation and created an environment of regulatory forbearance—meaning the rules exist and the regulators don’t want to enforce them,” said Rosenblat.
- Uber often intentionally uses what’s known as “phantom design” in the apps used by drivers and passengers to indicate there are more cars available than there actually are. She said the “manipulation is just a design tactic.”
- Rosenblat said that while Uber pitches “freedom” of being a driver, there is actually considerable pressure on drivers who often feel a lack of control and who can be “deactivated” for a variety of reasons. “Having to choose which of the 14 hours per day you work really isn’t freedom,” added Rosenblat.
- Drivers are often sent “Orwellian” messages, such as how lowered Uber rates will actually create higher earnings.
More Resources
Filene pointed credit unions toward three studies it has conducted around the gig economy:
- Report 492: Resource Guide: Small Buisness Lending and Independent Workers
- Report 480: The Case for Workplace Financial Well-Being: The View from Credit Unions
- Report 475: Meeting the Needs of Independent Workers at Vancity Credit Union