A Blog by Jonathan Low

 

Mar 2, 2020

Will the Coronavirus Shut Down the Gig Economy?

It seems likely that if the virus becomes prevalent in large urban areas where the gig economy is strongest, demand and prices may go up as people shun public transportation, offices, supermarkets and other stores, though they may have concerns about people they dont know touching their food.

And if gig workers, many of whom live on cities' outskirts, avoid urban cores, prices could go up even further. JL


Alexis Madrigal reports in The Atlantic:

If people begin to shelter in place it would seem likely more people would order groceries rather than put themselves at risk. Gig-economy companies are popular in large urban centers, where they play a now-crucial role in transportation and the delivery of local goods. Uber drivers and Instacart delivery people receive financial incentives to work. Crossbreeding this disease with the nation’s platform economy might mean that the rich will shelter in place, safe and sound, while the poor troll through the streets, taking their chances for a necessary payday.
The shadow of the new coronavirus finally reached American shores this week, as markets jittered downward and new cases crept up. The scope of any outbreak here is not clear, but experts suspect that the virus will become widespread. While the disease, known as COVID-19, is a global phenomenon, the response to it is necessarily local, and divvied up among more than 2,600 local health departments in the U.S.
Municipal governments have prepared plans and local officials are on high alert, but they have little experience dealing with a new infrastructural fact in a major disease outbreak: the gig economy. In Wuhan, China, where the COVID-19 outbreak originated, delivery drivers have played a major role in keeping the city going during containment efforts. In San Francisco, say, if people begin to shelter in place—or even simply shy away from heading out—it would seem likely that more people would order groceries or dinner rather than put themselves at risk.
Gig-economy companies such as Uber, Lyft, and Instacart have two distinct features. One, they are particularly popular in large urban centers, where they play a now-crucial role in transportation and the delivery of local goods. Two, California’s recent legislation notwithstanding, the labor platforms don’t have employees as they have traditionally been understood. Uber drivers and Instacart delivery people receive financial incentives to work, but they are not compelled by a set work schedule.
These two factors make for all sorts of possible disruptions to normal life if a large-scale disease outbreak were to strike an American city. What will people who have grown used to DoorDash delivery and Lyft rides do? How will the gig workers respond? What will the labor platforms do? What will local governments allow or attempt to compel?
People’s actions will influence how the outbreak plays out, and these questions have never been answered in practice. There’s no this-worked-last-time playbook to run. The new coronavirus is novel not only in its biological configuration, but in how it will be linked to these new technological systems.
County health officers do have experience preparing for disease outbreaks, with the closest analogue being the variant of H1N1 that arose in the spring of 2009. But back then, the whole set of technologies that underpin the gig economy was not around, Jennifer Vines, the health officer for Multnomah County, Oregon, told me. “We’re having to think differently,” she said. Her county is “just starting to map out a regional summit around these exact questions that would include transportation workers. We’re not going with doomsday, but what are the cascading effects?”
For now, Vines and her team have issued basic guidance with fairly standard advice about washing hands, considering future child-care plans, and lightly stocking up on food. They’ve worked with schools, businesses, and some health clinics. Next will come guidance for cities, correctional institutions, long-term care facilities, and homeless shelters. Then they’ll try to convene other companies, including gig-economy outfits, though precisely what will come out of that meeting is unclear.  
Another thing that’s not clear: the extent to which the companies themselves have considered the issues of the disease outbreak deeply. I asked America’s most prominent delivery and ride-hailing services—Uber, Lyft, DoorDash, Postmates, Instacart, and Amazon—for comment about their disease-outbreak preparedness planning. Only Postmates and Instacart responded to me.
“Community health and safety is paramount at Postmates, and we have shared precautionary [Centers for Disease Control and Prevention] guidance with those carrying out deliveries so that they are aware,” Postmates told me in a statement. “We will continue to encourage employees, merchants, consumers, and everyone to follow preventative measures such as washing hands and staying in if you are sick.”
“We’re actively working with local and national authorities to monitor the situation as it unfolds,” Instacart said in a statement. “We’re adhering to recommendations from public-health officials to ensure we’re operating safely with minimal disruption to our service, while also taking the appropriate precautionary measures to keep teams, shoppers, and customers safe.”
It’s possible to think through some of the basic scenarios that people will face if an outbreak becomes severe. The dilemmas are, in fact, all too easy to imagine in the absence of clear plans. Consider ride-hailing. If public transit comes to be seen as too risky because it’s so filled with people, Ubers and Lyfts could be considered the least risky option. Demand would surge.
In many wealthy urban cores, Uber and Lyft drivers actually come from far outside the center of the metro area. If those drivers decide to quarantine themselves at home as demand goes up, the price of a ride could shoot very high. Conversely, if drivers flood into metro centers from outlying regions, they could become vectors spreading COVID-19 within cities and bringing it to outlying areas.
Conflicting situations such as this pose hard choices for cities and companies alike. Uber and Lyft could limit price increases, or prevent drivers from entering certain areas. Or local public-health officers could determine that ride-hail drivers are a risk to public safety and tell the companies to stop operation within their jurisdictions. Would Uber and Lyft accept an exclusion zone? Would drivers and riders? Such restrictions could leave drivers with precarious finances unable to pay their bills.
One silver lining could be that the tracking the companies do of their drivers and riders can make the work of epidemiologists easier, Vines noted. In recent years, during a measles outbreak, health officials were able to contact drivers who had been exposed to the disease by their riders. Still, it’s hard to find this comforting.
Imagine another not-far-fetched scenario. If people see a public-health crisis unfolding, they might begin to make large orders on Amazon to stock up. But Amazon itself could easily suffer during an outbreak. Given the demanding labor policies of the retail behemoth and its subcontracted delivery companies, workers might be unlikely to want to miss shifts if they’re feeling a little under the weather. It could just be sniffles—but what if it’s COVID-19? An outbreak at one or more key facilities could cause the infrastructure that provides delivery services to falter just as demand surges. Suddenly, the convenience of having all the supplies you need to weather an outbreak arrive at your doorstep would disappear.
For every little thing in modern life, a “servant economy” app exists. If schools are out, will demand at Care.com surge? If people don’t want to run out for dog food, will they turn to Chewy and Pet Plate? The dark side of hitting buttons on a phone and having things happen out there in the world is that other people—humans susceptible to viral infection—have to make all those things happen.
No one knows yet how serious a COVID-19 outbreak will be in America, nor how disruptive it will prove for everyday life in any given place. But even if the virological properties of the disease are less nasty than early reporting implies, some Americans may witness a grim technological future that few imagined. Crossbreeding this disease with the nation’s platform economy might mean that the rich will shelter in place, safe and sound, while the poor troll through the streets, taking their chances for a necessary payday.

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