Scooter race to the bottom: Three scooter companies, one exploitative labor model

Rather than use employees to recharge their scooters, three companies pay small per-scooter bounties to freelancers

By Keith A. Spencer

Senior Editor

Published May 6, 2018 2:00PM (EDT)

Bird and Spin scooters sit parked on a street corner in San Francisco, California.  (Getty/Justin Sullivan)
Bird and Spin scooters sit parked on a street corner in San Francisco, California. (Getty/Justin Sullivan)

The proliferation of private tech campus commuter shuttles and the rise of ridesharing platforms like Uber attest to Silicon Valley’s nascent obsession with transit. Yet the newest gambit that tech’s venture capitalists are sinking their money into isn’t a futuristic self-driving car or a drone delivery vehicle. Rather, the people who invest in the “future” are all in on the scooter.

When I say all in, I don't just mean chump change, either: $255 million in venture capital has been pumped into the three top electric scooter rental companies now operating in San Francisco, according to CNet.

In San Francisco, the scooters didn't roll in gently, but rather hit the city like a tsunami. In March and April 2018, three companies with four-letter names — Bird, Lime and Spin — unleashed their rental scooter systems in San Francisco almost simultaneously. While some took to the on-demand scooters, the lack of education as to operating rules and the haphazard way that the scooters were strewn across the 49-square-mile city became a grand experiment that tested the patience of walkers, cyclists, city officials and car drivers, all of whom had to suddenly make way for oblivious scooter-riders. The experiment certainly tested citizens' patience; indeed, some vigilantes took to throwing the invading vehicles in Oakland’s Lake Merritt.

Yet the salient and underreported aspect of San Francisco’s “Scootergeddon,” as some are calling it, is the exploitative labor model that, oddly, all three companies settled on — as though all three were simultaneously struck with the same vision from god as to how to wring the most possible work out of their workforce while paying their employees the least.

First, about those three companies: Bird, Lime and Spin are all app-driven platforms: you find and book a scooter with your phone. Unlike many city bike-share programs, all three scooter rental companies are “dockless,” meaning that the scooters can be parked anywhere when riders are done. And all three settled on the same peculiar model for recharging their scooters: paying a “bounty” of $5 to $12 per scooter to the people who recharge them.

You read that right: Rather than hire full-time rechargers, or employ a fleet to drive about, pick up scooters at the end of the day, take them back to a headquarters, recharge them and then redistribute them the next day, Lime, Bird and Spin rely on contractors to do this for them. Like many gig economy jobs, these workers have no benefits, receive no guaranteed minimum wage, and aren’t reimbursed for the electricity they pay for in recharging, nor the gas they use, nor the maintenance on their vehicles. Accordingly, they don't get benefits, either.

I reached out to Lime and Bird to ask how it was that all three companies settled on the same labor model for recharging; neither of them could say. “I believe we were the first ones to have developed the idea, but I’d have to double-check. I’m not aware,” a Lime spokesperson told Salon. A Bird spokesperson was similarly unsure. “I can say that Bird was the first to market with electric short-range vehicles,” they told me.

I asked Kati Sipp, a consultant who worked in the labor movement for years and who runs a blog, “Hack the Union,” about labor in the 21st century, how it was that all these companies settled on the exact same recharging model using precarious labor. “I mean if I had to guess, I would bet one of them did it, and the other two were like, ‘Oh, that's the problem we've been trying to solve. That's great. Let's just steal that idea.’”

Sipp said that one reason that contractor models like this come into use is because they not only save companies money, but limit their liability. “They save money and [are] less protected by labor law  — they’re probably exempted from civil rights or discrimination claims and things like that because they’re 1099 contractors, or at least it’s harder to enforce those kinds of claims,” Sipp told Salon. She added that these companies save on “maintenance of the cars that are driving around and picking them up, and the electricity they use… overall it could come out to less than minimum wage.”

People who have signed up as rechargers do report relatively low wages, as well as interesting ways that the companies nickel and dime their contract workers.

I chanced upon a recharger for Lime, Christina, who was driving around San Francisco picking up Lime scooters in her truck last week. Christina said that she chose Lime because the company paid around $12 a scooter, whereas the other two companies only paid $5 for each scooter recharged — a figure that is confirmed by both companies’ websites. Christina said that the first night she had tried it, she was limited to just three scooters to see if she was serious. “Today is going okay,” she told me. “I got 16 [scooters] charged.”

Tom, another Lime "juicer" — that's what that companies calls their freelance rechargers — was walking through Golden Gate Park with a pair of scooters when I encountered him. "I don't think I could do this as a full-time job," Tom said. "I just kind of do it here and there for fun. You don't make much." Tom said he made $60 on a previous day, and also that he rarely found and recharged more than six or seven scooters in a day. "You have to get up early and put them back around on the street — that's the worst part," he mused.

Harry Campbell, who runs a popular blog, “The Rideshare Guy,” about various gig-economy related rideshare companies, blogged about his experience trying out being a Bird recharger. Campbell picked up three scooters, recharged them, and dropped them back off in the morning to a company-approved "nest," and did not quite make $5 per scooter; apparently, the company pro-rates the amount that rechargers are paid based on the battery level of the scooter, and since the scooters he recharged had 5 to 10 percent of their charge left, his per-scooter payment was less than $5 each.

Campbell reported making $13.75 as a result — though he doesn’t subtract gas, depreciation and electricity costs from his total, nor the benefits he might get were he a full-time worker, nor the income taxes he will later have to pay.

Sipp said many gig economy workers may not be fully aware of all the expenses they incur. “People just don’t understand it, when they get into things like depreciation… Say you're driving your car around to pick up scooters —  your car experiences depreciation, you're paying for car insurance, and the bounty doesn't cover all of the costs of operations that you have as an independent contractor… so then you end up making $2 an hour or something when you offset your cost against whatever the bounty is.”

“[When] Uber or Lyft goes into a new market, they say the rate [they pay workers] will be high, in order to attract new workers,” Sipp said. “And while they have very few drivers, they pay that higher rate, and then as soon as they get a decent labor supply, they’re like, ‘we're cutting the rates to make the rides cheaper so that we can increase the amount of people that are using the service.’”

“It's just this race to the bottom for their workers,” she concluded.

Meanwhile, the costs of converting full-time labor to contract labor often fall on both the employee and the state. As the Los Angeles Times notes, “the misclassification of workers as independent contractors costs [California] roughly $7 billion in lost payroll taxes each year.”

Scrutiny over which workers are classified as contractors and which aren’t has bled over into a recent California Supreme Court ruling, in which the court said, per the LA Times,

to classify someone as an independent contractor … businesses must show that the worker is free from the control and direction of the employer; performs work that is outside the hirer's core business; and customarily engages in "an independently established trade, occupation or business."

One would think that recharging scooters would constitute a “core” business of an electric scooter company.

By Keith A. Spencer

Keith A. Spencer is a social critic and author. Previously a senior editor at Salon, he writes about capitalism, science, labor and culture, and published a book on how Silicon Valley is destroying the world. Keep up with his writing on TwitterFacebook, or Substack.

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Related Topics ------------------------------------------

Bird Electric Scooters Exploitation Gig Economy Labor Lime Lyft Race To The Bottom Spin Uber