[MUSIC]
Last weekend, I was riding in an Uber Express Pool.
My fellow female passenger was angry she was dropped so far from her destination.
So she tried to punch the driver and steal his phone.
The driver got out of the car, pushing her away, defending himself.
The cop sped up, pulling the two apart, assuming it was the driver's fault.
As he was being interrogated by the police, he kept begging for his phone.
I need to turn off my Uber app, he pled.
If I don't pick up my next client, they will charge me for
the trip and deactivate me from the platform.
This 60-something Korean man was more afraid of the wrath of
Uber than the wrath of the police, and rightly so.
Uber could have unilaterally cut off his livelihood with no hearing,
no notice, and no appeal.
This driver is an independent contractor.
Which in theory means he should have complete independence
over setting his own rates, working conditions, and contract terms.
However, gate platforms like Uber use changing incentives and
the threat of deactivation to exert unprecedented control
over their allegedly independent work force.
These statements may lead you to believe that I'm antibusiness.
But actually I have worked at Uber.
When I joined the company, running their East Africa operations,
I was excited about creating thousands of economic opportunities for
people in Kenya, Tanzania, and Uganda where unemployment rates are really high.
And I was excited about improving mobility in today's hungry for
convenient, affordable transportation.
But that excitement quickly gave way to disillusionment.
Every two weeks, I hosted focus groups with around 20 drivers.
They told me, Alyssa, we're making no money on this platform.
We work for 100 hours every week.
And we only take home $20.
When I ran the historical data, their stories checked out.
When Uber first launched in East Africa, they offered very generous rates and
bonuses to make the economic opportunity a no-brainer.
Drivers, with the encouragement of Uber, took out multi-year loans
to finance the relatively new vehicles required to join the platform.
One year after launch, and two weeks after I joined the company,
we slashed rates by 35%, shifting all of that onto drivers.
It would not be the last bait and switch the company would pull.
When I raised concerns about driver earnings to management,
their message to me was clear.
Gig workers are an expendable resource for growth.
Because of the company's labor practices, I quit after a short six months,
to ironically, become an independent worker myself.
As an independent worker, I faced many challenges, like clients ghosting when it
came time to make their final payment, and going 18 months without health insurance.
In Kenya, 80% of adults are self-employed.
This means that you have no guaranteed salary, no retirement contributions,
no paid leave, no employer-sponsored benefits, and
you have to pay all your own expenses.
The issue of the lack of protections for
contract workers may seem like a distant emerging market problem.
But the US economy is evolving to look like Kenya's.
Since 2010, the IRS has reported a 6% year on
year increase in the number of independent relative to full-time workers.
By 2020, half of Americans will be self-employed.
Full time W2 workers in this country had several protections thanks to the labor
movement, which started around the time of the Industrial Revolution.
Factory owners treated their workers as expendable,
forcing them to work 100 hour weeks just to maximize profits.
Workers organized into unions and rioted, resulting in
the 1938 Fair Labor Standards Act, which instituted the 40-hour work week,
banned child labor and set standards around minimum wage and overtime pay.
None of these protections apply to contractors, which threatens to
increase the unprecedented levels of inequality we see in this country.
Corporations are systemically contorting full-time positions
into contract positions to minimize their fixed labor costs.
Oftentimes, contractors will work for the same single company for years.
By changing nothing more than that individual's formal employment status,
companies are side-stepping the hard-won worker protections of the 20th century and
shifting risk from investors to workers.
Why do I care so much about this misclassification issue?
Well, my dad was classified as an independent contractor for
the 25 years he worked at his company.
He received less than $20,000 and received no benefits.
If my mom, a public school teacher, did not have generous benefits,
I have no idea how he would have retired or
my family would have accessed quality health insurance.
Some of the worst offenders of contract worker abuse are in our own backyard.
I learned five minutes before this session started that Stanford is
increasingly shifting to contractors rather than full time employees to reduce
the benefit obligations.
Such as giving their employees free college tuition for their children.
The communications coaches who helped us with these presentations
are in short term rather than full time contracts.
Google has more contractors on its payroll than full time employees.
How many of you have ordered something on Amazon Prime in the last month?
All of us, same.
[LAUGH] Well, chances are that that package was delivered to you
by an Amazon flex contract employee, who, post expenses,
can make as little as $5 an hour, under half of California's $11 minimum wage.
Contract workers in Arizona moderate explicit content on the Facebook platform.
They spend hours every day watching horrific videos of murder and
sexual exploitation.
Several suffer from PTSD.
Which Facebook, of course,
provides no support for, because they're just contractors, not employees.
These contractors make $15 an hour, or a mere $28,000 a year.
Silicon Valley, fed by Stanford talent,
has profited from driving down the wages of low scale workers.
We've moved backwards as as a society,
back to where we were at the start of the Industrial Revolution.
Back to the age of the 100 hour work week and no effective minimum wage.
Back to the age where workers' rights are dependent on the benevolence of
the management.
Dependent on the whims of the people in this room, rather than protected by law.
The good news is that gig workers are organizing to demand their rights.
In the past few weeks, Instacart shoppers took to Reddit and
Facebook forums to oppose Instacart's policy of deducting tips
from their minimum guaranteed base pay.
This time, the workers won.
Instacart agreed to change its policy and pay out tips separately from base pay,
and they instituted new minimum payments for delivery.
David won against Goliath.
I'd like to leave you with this.
By being at the GSB, we are in a place of incredible privilege.
Our starting salary coming out of this school will be $110,000 higher than, or
2.8x the median household income in the United States.
Your employer will almost certainly give you health insurance, and paid leave and
retirement contribution on top of dinners at Nobu,
free trips to Cancun and soul cycle classes.
I say this not to guilt you, but to implore you to be a voice for
those who do not have the same level of privilege.
You may be wondering what you can do.
Well, you can start by tipping.
Tip generously, and tip with cash or
another former payment where you know the funds will directly reach workers.
Beyond tipping, you can email HR if you witness contract
worker mistreatment within your organization.
If you work in big tech, chances are that mistreatment exists.
If you see contract workers working crazy hours, or
earning wages that post expenses are below minimum wage, or
see workers doing the work of a full time employee, so they deserve full benefits.
And if your management is unwilling to listen like mine was,
you can have the courage to go to the press, even anonymously.
Publications like the New York Times, Recode, and Bloomberg have exposed stories
that have shamed companies like Facebook and Instacart into making changes.
The disappearance of quality employment opportunities threatens to
exacerbate the unprecedented levels of inequality that we see in our country and
our Bay Area community.
Shirking your ethical responsibilities to workers may seem like smart business.
But it stunts the economic mobility of your workers and their children.
Don't be a part of the problem, be a part of solution towards just employment.
Thank you.
>> [APPLAUSE]
[MUSIC]