Not if your side gig is really your full-time gig at least for now. Many have jumped on the gig bandwagon to earn additional income, unfortunately for some, the gig really isn’t paying enough to make it worth the time, especially when your tip is considered part of your wages. And if your side gig is now your full-time job … this becomes even more apparent. As the article from Redcode states:
“Last week, Instacart — the most popular app for delivering groceries to people’s houses in the US — received widespread criticism for allegedly denying their shoppers their hard-earned tip money.
It started when one Instacart shopper shared a receipt that seemed to show that the company was eating into his $10 tip and using that money to help subsidize the worker’s pay, netting him only 80 cents in base pay on a delivery. First, Instacart denied any accusations of tip theft, calling that shopper’s situation an “edge case” and a “glitch” in the company’s new pay model, which it says is designed to reward shoppers more fairly.
But that didn’t help explain the dozens of other similar cases workers shared online with screenshots of their pay stubs — or Instacart’s history of issues with worker pay. Today, the company agreed to change its policy to increase the minimum pay to workers for deliveries, separate that pay from designated tip money, and compensate workers who saw their tip funds redirected.”
All paid wages in the United States must be paid in line with the federal and state laws, that protect employees from employer exploitation. No matter how it is depicted, there are minimum wages laws that must be followed. I’m not saying that minimum wage is a livable wage, but that at least it should be monitored for adherence.
“Whether or not these companies are or have been intentionally misusing their workers’ tip funds, the public outrage brings to light a deeper issue: Many workers in the new on-demand app economy are not being paid a consistent living wage. Tip theft might be one of the ugliest and most blatant potential cases of gig worker exploitation, but the reality is that even when gig economy workers get their tips in full, many of them are being paid far below what we would consider a decent minimum wage — by some estimates less than $10 an hour after expenses — for jobs that sell workers on a promise of making much more.
For too long, companies like Instacart, Uber, and Lyft have fallen back on the same explanation for these cases: Most of their workers enjoy the flexibility of their jobs, and most of them do it only part-time for supplemental income and are doing it well. It’s the complainers who aren’t doing it right.”
As with many industries if gig employers do not self-regulate, then the government will. The Uber and Lyft phenomena decimated the taxi industry so much so that New York City has implemented a wage floor per hour for ride-sharing drivers and California is considering classifying these workers as employees, not 1099.
“Lyft and Uber have said this will result in higher fares, but they haven’t said by how much. According to Lyft, there could be other consequences, such as Uber taking more market share; ultimately, a monopoly would not be good for drivers and riders alike. Setting those concerns aside, if the New York wage floor turns out to be successful, it could serve as a model for other cities. Tech companies including Uber, Lyft, Instacart, DoorDash, Postmates, and others have actively lobbied against such a decision, writing in a joint letter that it would “decimate businesses.”
For most gig workers in the ride-share business, they need their wage payment to be timely and correct as they need the funds to continue working the gig. Gig workers are also referred to as 1099 employees, meaning they work for themselves and are responsible for all related taxes which makes the situation even more difficult if they are not being paid accordingly.
Overview by Sue Brown, Director, Prepaid Advisory Service at Mercator Advisory Group