By Jeff Elder
This Labor Day weekend, one of the biggest economic stories in the world takes place in San Francisco. The odd-job economy is headquartered here, and the struggle for a fair wage for its workers takes place in courtrooms, elections and the streets.
Uber, Lyft, and DoorDash are clustered together on the east side of The City, like techies waiting for an Uber house after a night out in the bars of SoMa. The tech founders and workers of these burgeoning companies were instrumental in San Francisco’s latest tech explosion.
But that’s just one of the reasons why this is where the odd-job economy wage fight is taking place, says Paul Oyer, a Stanford professor of economics who studied industry at the National. Bureau of Economic Research and as editor of the Journal of Labor Economics.
Here are the others. San Francisco is a high-tech city where people who don’t have a car flock to ridesharing apps. The city has become an illustration of the wealth disparity, with tech founders and investors contrasting with service workers forced to leave. Yet San Francisco is a city that culturally prides itself on social justice. And this cauldron of fuel elements is being overseen by a progressive municipal government during a pandemic that has heated up all the mix.
“San Francisco is an illustration of this inequality,” Oyer told The Examiner.
The debate erupted this week during a street protest in the upscale Pacific Heights neighborhood. Union organizers rounded up a caravan of DoorDash food delivery drivers who clogged Washington Street on Thursday, honking and cheering the megaphone speeches.
The protest aimed to bring drivers’ demand for better pay to the door of DoorDash CEO Tony Xu. However, the two sides are so divided that they even quarreled over whether Xu actually lived at the site.
At the heart of the dispute are wages: how much and how concert workers, who set their own hours as drivers, are paid. The two parties cannot even agree on the current amount.
DoorDash claims in a lawsuit against The City (San Franciscso is also suing DoorDash) that Bay Area drivers make $ 36 an hour, including tips. Thursday’s rally organizers and drivers told The Examiner they end up earning less than the minimum wage, which is $ 16.32 in San Francisco.
“The only way for me to survive is to rent cheap rent and live in a crowded situation,” driver Rondu Gantt told The Examiner. “Tony Xu makes hundreds of millions of dollars. This gap is glaring. “
Xu is the perfect embodiment of the pay gap, if you ask the labor organizers. The New York Times reported that Xu was the second highest paid CEO last year (behind Alexander Karp, the CEO of Palantir), with a salary of $ 414 million. DoorDash says Xu actually won less than a tenth of that. The CEO’s annual salary is $ 300,000, depending on the company, and the rest? “Tony doesn’t receive this full price unless DoorDash significantly outperforms the market,” the company said in a statement. Oyer, the Stanford economist said it was true, but added: “He always makes a ton of money, and the little guy isn’t.”
This disparity – the crux of this historic union battle – was personified during the Pac Heights protest. “He made over $ 400 million last year, while I made a few dollars per delivery,” driver Saori Okawa told the crowd, speaking of Xu. When asked for his opinion on this, a well-dressed middle-aged man replied, getting into a luxury SUV: “My opinion is that you are all a bunch of commies.” (Pac Heights was the only San Francisco neighborhood to vote for Proposition 22 in November, according to the city’s ABC7 News.)
The street demonstration in an upscale neighborhood evoked the Google bus protests of 2013-2018. At the time, media around the world captured protesters surrounding the commuter buses of tech companies. The protests denounced gentrification and wage disparities.
But Ted Egan, the chief economist for the city of San Francisco, says the wage struggle for the odd-job economy is much more than that. “This is clearly a major union debate that has become a very hot topic,” Egan told The Examiner. “And San Francisco is a center of it.”
The main battleground is the Prop voting initiative. 22, which was heavily supported by DoorDash, Xu, and other gig economy companies like Uber. The ballot initiative allowed drivers to remain independent contractors with some work flexibility and a fixed salary – but left companies to fend for themselves to provide them with health benefits, sick leave or unemployment insurance. And the drivers, who would not be able to bargain collectively under Proposition 22, say that with the expense, the pay ends up being well below what the law says.
Proposition 22 won in November 2020, but was declared unconstitutional by an Alameda County Superior Court judge last month. Judge Frank Roesch wrote that the ballot measure “only appears to protect the economic interests of network companies by having a divided and non-union workforce.”
DoorDash maintains that prop. 22 is still the law. The company believes Roesch’s decision will be appealed and the law upheld.
San Francisco supervisor Gordon Mar thinks otherwise and says the city is on the side of the workers, in the courts and on the streets. Former union organizer, Mar spoke at Thursday’s protest, later telling The Examiner that the rally showed “the extreme inequality these new industries are creating.”
“We’re Ground Zero for the gig economy,” Mar said. “A lot of the key players in these industries started at The City and are still here. They have been able to prosper and grow in part because of the incentives and tax breaks, and it is important for us to engage in this important debate on fairness for workers.
Dozens of drivers applauded Mar as he spoke in the street at the protest. But others, like Jacqueline Cancino, who lives in the Crocker-Amazon neighborhood in the south of the city, voted against Proposal 22. She believes it would hurt her ability to keep a flexible schedule and take care of herself. his young son. “Living in San Francisco is very expensive,” she says. But she and her husband both drive for gig economy businesses and are able to make ends meet “if we put the time and effort into the job.”
Without a doubt, the success of technology and the sweat of the gig economy workers clash across town this Labor Day weekend. But sometimes they do connect.
Yonten Kimshul drives for Uber, Lyft, and DoorDash – but only part-time, as he tries to break into the tech industry. Ignoring Thursday’s protest, he was driving for Uber nearby. “I have read Proposition 22, and there are so many legal aspects to it that I’m not sure I understand it,” he told The Examiner. Kimshul now lives in Brisbane because he says it’s more affordable and works part-time in data entry, hoping to join a full-time tech company. Describing himself as “fairly balanced”, he says he doesn’t get too caught up in politics.
“But I feel bad for the people who drive full time in the city. You cannot survive doing this. Not here.”