As Web-based businesses such as Uber and Handy create loyal fans in the D.C. region and across the country, the independent contractors they employ have helped to create one of the fastest-growing sectors of the economy.
Yet Congress has been almost entirely silent on the emergence of a vulnerable workforce unprotected by traditional benefits.
Sen. Mark R. Warner (D-Va.) is trying to fill the void, marrying his party’s current focus on income inequality to his obsession with technology and financial policy.
In a speech scheduled for Thursday at the left-leaning New America Foundation in the District, Warner plans to jump-start a discussion about how the tax code, the social safety net, labor regulations and even small-business grants might need to change to help part-time cabdrivers, house-cleaning crews or deliverymen who take their assignments online.
“This is a tidal change in the relationship between an individual and the workplace,” Warner said. “It’s stunning that nobody in Washington is talking about this.”
Bah Oochiwara, 23, of Mount Vernon, Md., biked throughout the District for about a year for Postmates, an on-demand delivery service for anything from sushi to blueprints. The money, he said, wasn’t worth the effort.
“They work you like a freaking slave, sending you eight miles and paying you four bucks,” Oochiwara said of Postmates on a recent evening in downtown Washington.
When contacted, Postmates provided information about its liability insurance program but had no further comment.
It would have been helpful, Oochiwara said, if Postmates offered a base pay, because on slow days he made almost nothing. “If you’re just trying to make some money” on the side, it’s okay, he said. His brother works at both Postmates and Starbucks. “But if you want something to keep you stable, it’s not going to happen.”
Democrats on Capitol Hill have focused recently on economic inequality and the plight of low-wage workers. But their proposals to raise the minimum wage and require paid sick leave would not help the independent contractors who typically work in the exploding field of Web-based service companies.
According to the Government Accountability Office, there are a lot of them — 40.4 percent of working people fall into the broad category of part-time, self-employed or temporary “contingent workers,” meaning anything from a day laborer to an Uber driver to a freelance journalist. They make less per hour on average than regular employees, have less job security and rely more on government services.
That number is up from 35.3 percent in 2006. It also skews disproportionately young and Hispanic, valuable demographics for Democrats heading into next year’s elections.
“I do think there’s an opportunity here for Democrats to grab on to — how we make this economy work better and continue to have economic mobility?” Warner said.
It’s also an opportunity for Warner in particular, whose legislative record has been focused more on the national deficit than the perils of low-wage work. A self-described “radical centrist” and “business guy,” he barely survived last fall’s election after failing to turn out large numbers of Democratic-base voters in Northern Virginia.
After that campaign, Warner acknowledged that he had not accomplished as much in the Senate as he wished. And as a former venture capitalist who made millions in the cellphone industry, Warner has deep connections to the business executives who might help develop solutions to the challenges of contingent work.
There is value to what Warner calls the “gig economy.” Platforms such as Uber more efficiently connect labor with demand, and are especially useful for people who can’t find other jobs or want to work odd hours while in school or raising kids. Freelance marketplaces also lower start-up costs for small companies that can’t afford full-time employees.
Making a living in the gig economy can be difficult, however. According to a survey of workers for online freelancing platforms, the biggest source of dissatisfaction was that they couldn’t make enough money. Benefits and protections provided by traditional employers — workers’ compensation, retirement contributions, unemployment insurance, even the minimum wage and the right to join a union — are elusive.
Warner is thinking through ways to change that. He has spent the past few months talking to think tanks, unions, business leaders and workers about what this sector looks like and what the federal government might do to help.
The biggest issue: expanding the social safety net to cover more of this unattached workforce, which he links to his more conservative concerns about the national debt.
“People thought the dot-com economy was great, and they thought that the housing was great until it wasn’t,” Warner said. “If you have no safety net at all and stuff hits the fan, you go from here back to just being completely on the government.”
The Affordable Care Act is one step in this direction, Warner said. Being able to buy health insurance independent of an employer largely removes one disadvantage from the freelance life; Uber’s chief executive has said it’s been “huge” for his business. Warner said he’s thinking of ways that similar marketplaces could be set up for other benefits.
So far, he isn’t sure who should pay for it. Some states are thinking about taking it upon themselves to set up public retirement systems. But there are other options: Unions for the building trades send workers to jobs at many different employers, who all pay into a central fund for health coverage, retirement and training. In the online platform context, that could mean asking companies to add user fees that support benefits for workers.
Warner has spoken with Sara Horowitz, the president of the Freelancers Union, which provides unionlike benefits to its 264,000 mostly white-collar members. She has advocated for an unemployment insurance system to which workers could contribute in tax-free accounts, potentially administered by unions or unionlike groups.
“Unions really do offer us a model for how to do this, and we should be thinking about how to iterate and evolve them,” Horowitz said.
Warner is also interested in reshaping rigid tax definitions to create a category for “dependent contractors,” who do most of their work for one employer but have more flexibility than traditional employees. The approach might broker a peace in the legal war over whether these workers are employees or independent contractors — allowing the Uber-type business model to survive while adding some worker protections.
Finally, Warner thinks there might be private-sector tools that could help, such as Web programs that build rainy-day funds into tax filings.
Warner isn’t proposing any plans yet, saying he just wants to get a conversation started — which may reflect the notion that getting anything done could be extremely difficult. Changing labor law has proven nearly impossible for decades, given strong partisan divides between labor and business.
Aneesh Chopra, who worked for Warner when he was governor of Virginia and went on to become the White House’s first “chief technology officer,” said that attracting attention to the subject is still an important first step.
“Even if it’s simply to bring awareness and to have a conversation, he will have done something,” Chopra said. “And I think as a doer, that gives him some satisfaction.”