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The sharing economy has its benefits but labor often gets the short end of the stick. (GeekWire Photo / Monica Nickelsburg)

After four months working with Ofo, Sean Healy reached a breaking point.

He started driving vans and trucks for the bike sharing company’s new Seattle operation. He was helping Ofo deploy thousands of bikes around the city in a matter of weeks to compete with Seattle’s other dockless bike share services. Healy says Ofo didn’t provide seat belts for workers in the back of the vehicles, restraints for the bikes, or safety gloves. He cut his hand and asked Ofo to provide gloves for the fleet management team. The general manager said she’d look into it.

(Screenshot courtesy of Healy)

“They’re asking people to do more with less and they’re not providing safety equipment,” Healy said. “It’s all of these little things combined … those are poor working conditions.”

Ofo asked Healy to help out with more office work, planning fleet operations. He agreed but didn’t forget what he says were unsafe working conditions for the people on the ground. When those concerns continued to go unaddressed, Healy decided to quit. But he couldn’t exactly quit Ofo. He was never technically an employee.

Healy’s story is not unique. He’s part of a growing workforce that gig economy companies rely on but don’t employ. Businesses are increasingly using “contingent workers” — contractors or employees of temporary staffing agencies — instead of hiring directly and providing the requisite benefits. These alternative work arrangements are becoming more common, helping companies save money and reduce liability, while workers grapple with job insecurity and confusion.

Domestic outsourcing

Like most jobs, Healy first connected directly with the company where he wanted to work. Ofo interviewed him and agreed to take him on. That’s where his story diverges from the traditional career path. Ofo asked Healy to apply through a third-party temp agency called Trades Labor Corporation. A few weeks later, Ofo signed a new contract with Millionair Club Charity, a staffing firm that helps people at risk of homelessness find work. Ofo asked Healy to transfer over to Millionair Club in November. Although he worked almost exclusively with Ofo managers, Healy was technically an employee of Millionair Club.

An analysis from researchers at Princeton and Harvard found the number of Americans in these alternative work arrangements rose from 10 percent in 2005 to 16 percent in 2015. Workers hired through third-party staffing agencies saw the sharpest rise, from 0.6 to 3 percent, over that period. People providing services through online intermediaries, like Uber, grew to 0.5 percent of all workers in 2015. A study by the U.S. Government Accountability Office defines contingent work more broadly, including part-time gigs. By that definition, contingent workers comprised 40 percent of the U.S. workforce in 2010.

This domestic outsourcing makes it difficult to track workplace safety and “increased risk occurs for a variety of reasons, including because agency temps often are not provided adequate safety training or equipment,” the GAO study says.

As an employee of Millionair Club, Healy did have access to a closet with safety gloves and vests but he says that was never communicated to him. Healy dealt with Ofo directly. “It always felt like the temp agency was more of a formality for HR,” he said.

Nikolai Mell

Nikolai Mell tells a similar story. He first interviewed with Ofo and began working for the company before signing any paperwork. Eventually, they instructed him to apply with the Trades Labor Corporation and later Millionair Club. Mell claims the back of the vans — which were either provided by drivers or rented from Enterprise — did not have seat belts or safety equipment to strap down free-floating bikes. He says injuries were common when the pressure was on.

“It was really difficult to do this in Seattle rush hour traffic, and when things got a little bit stressful and we really had to hit that quota, it started to become very clear that we were one car accident away from someone turning me into mulch in the back of those vans because there’s nothing to tie anything down,” he said. “There’s nowhere to sit.”

Ofo bikes are free floating in the back of an operations van (left). Nikolai Mell says the strap on the side of the van (right) is the only thing members of the fleet team could hold onto. (Images via Mell)

Healy and Mell decided to air their grievances on Reddit. They hoped to get a groundswell of support from other workers to stage a walkout. That walkout never materialized; Mell and Healy say workers were too concerned about rocking the boat and losing their gigs.

Ofo tells a different story.

“There’s nothing more important than our ofo family and ensuring those we work with feel safe, respected and valued,” a spokesperson said. “As ofo’s first city in the U.S., Seattle is a special place to us, and we’re proud of our partnership with the City, the work opportunities we’ve created, and our commitment to give back in every community we serve.”

Millionair Club communications lead Kjerstin Wood said the organization didn’t hear about any safety concerns until seeing the Reddit thread. “Safety and respect for our workers is a top priority,” she said. “We are currently gathering information as quickly as possible so that we can address these concerns.” Millionair Club is planning a routine audit of working conditions at Ofo to make recommendations for safety improvements.

Millionair Club works to help people at risk of homelessness by taking them on as employees and providing resources to help them get on track. The non-profit’s contract with Ofo is new and in the short time the two have been partnered, no Millionair Club employees have been transitioned into full-time employment with Ofo, though the bike sharing company does have five Seattle job openings listed on its website.

Ofo is based in China, where bike-sharing has taken off. Seattle is Ofo’s first expansion into the U.S., and the company recently raised a $700 million investment round. Ofo has a fleet of 8 million bicycles in more than 170 cities worldwide but the new Seattle operation is relatively small.

Buying service instead of paying wages

Rachel Heath, a University of Washington professor who studies labor economics, said the trend toward third-party staffing arrangements is “related to broader trends of inequality in society.”

“The workers that do have those long-term jobs are doing better and better and … they’re able to negotiate for some of the record profits that firms are earning, whereas the workers that are more temporary are less getting a piece of the pie,” she said.

Workers who aren’t employed directly by the company where they work have a harder time developing skills needed for upward mobility in the labor force, Heath says.

“When firms anticipate a long-term relationship with a worker, they tend to invest in training that worker not just in very specific skills that they need to do their immediate job but long-term, big-picture mentorship and general training; skills that they can use to connect pieces to different jobs,” she said. “When you’re using a third-party that has a worker for a more short-term, specific need, that training, that investment could very well be less.”

This workplace insecurity is the new normal for a growing portion of the labor force. It isn’t always clear who is responsible when problems arise, often leading workers to assume ultimate responsibility. Healy says that was the case at Ofo. Before leaving the job, he asked fleet workers whether they ever received gloves. They ended up buying their own.

“These are guys who are trying to work themselves off the street, trying to rebuild their lives,” he said. “That’s where the real issue for me comes in. It’s not just what you’re doing but it’s who you’re doing it to.”

For Healy, the crisis of employer responsibility isn’t likely to end with Ofo. He also drives for Uber and Lyft. Those darlings of the gig economy have their own complicated relationship with the people powering their services. The debate over whether ride-hailing companies should offer more employee-like protections to drivers is playing out in Seattle, with a first-of-its-kind law that would allow drivers to unionize. Seattle passed the law in 2015 and has been embroiled in legal battles in the years since.

“This is what’s really driving wage inequality,” David Weil, the former head of the Wage and Hour Division of the Department of Labor, told The Huffington Post. “By shifting tasks to contractors, companies pay a price for a service rather than wages for work. That means they don’t have to think about training, career advancement or benefit provision.”

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