How companies get inside gig workers' heads with "algorithmic wage discrimination"
The concept of equal pay for equal work is a cornerstone of Americans' sense of fairness in the workplace. But the rise of artificial intelligence allows some large companies to pay workers different amounts to do the same work, a new research report alleges.
The study finds that companies like Uber and Amazon, which rely on independent contractors for labor, use artificial intelligence to enact so-called "algorithmic wage discrimination," similar to consumer price discrimination.
Retailers and advertisers charge consumers different prices for the same goods, based on how much they believe a person is willing to pay, which sellers glean from details like what web browser someone is using. In a similar vein, companies that use independent contractors collect detailed information on where they live, when and where they work, how much money they aim to make, and the types of jobs they're most inclined to accept or reject, according to the report's author, University of California Hastings law professor Veena Dubal.
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From rideshare drivers' perspectives, basing pay on these metrics leads to unpredictable and variable pay, according to Dubal, who drew on hundreds of interviews with gig workers themselves.
Some ride-hail drivers said the companies they work for are "gamifying" work, manipulating them and forcing them to gamble just to make a living.
"Algorithmic wage discrimination allows firms to personalize and differentiate wages for workers in ways unknown to them, paying them to behave in ways that the firm desires, perhaps [paying] as little as the system determines that they may be willing to accept," the report reads, in part.
Amazon spokeswoman Simeone Griffin told CBS MoneyWatch that its "Flex" program that lets drivers work only when they want to gives workers "the opportunity to set their own schedule and be their own boss."
She added that workers' earnings exceed $26 on average per hour worked.
Uber did not reply to CBS MoneyWatch's request for comment.
Workers have to "guess" their wages
And while companies have reams of data on workers, they have little to no insight into how their pay is determined.
"Given the information asymmetry between workers and the firm, companies can calculate the exact wage rates necessary to incentivize desired behaviors, while workers can only guess as to why they make what they do," the report reads.
Dubal added that workers can't count on their jobs for economic stability or security, and called companies' pay practices "deeply predatory."
"It's like gambling! The house always wins," said Ben, one rideshare driver Dubal interviewed.
Another driver for Uber, Domingo, said he had completed 95 of the 96 trips he needed to secure a $100 bonus. Despite being located in a busy part of town, he had to wait 45 minutes to secure his final ride and earn the $100 he'd been counting on to pay for groceries. He believes Uber was baiting him to work longer.
"It feels like the algorithm is turned against you. There was a night at the end of one of week, if felt like the algorithm was punishing me. I had 95 out of 96 rides for a $100 bonus… it was ten o'clock at night in a popular area. It took me 45 min in a popular area to get that last ride," he told Prof. Dubal. "The algorithm was moving past me to get to people who weren't closer to their bonus. No way to verify that, but that's what it felt like was happening."
Bringing your boss "inside your head"
This close workplace monitoring effectively erases a worker's most powerful bargaining tool: The fact that, typically, only they know what wage or salary they're willing to accept for a job.
That's what is most scary about the practice, according to Dubal.
"A source of power I have is that I know what I am willing to accept, and my employer doesn't know," she told CBS MoneyWatch. "These practices remove that, because they can learn what a worker has been willing to accept in a certain context. They are getting inside your head."
She said that this kind of insight into how workers think, combined with the availability of other information like credit data, or how much a given worker might owe in rent, could lead to "an extraordinarily controlled economy where the people in control are in the firms and no one else."
It could undo decades of social and labor movements advocating for equal pay for equal work, she added.
"It's really scary, and this is how you get retrenchment — a rolling back of worker rights — through a new cultural sense of what's OK and what's not OK," she said.