(Washington, DC) – Major digital labor platforms, also known as gig companies, operating in the United States misclassify gig workers as independent contractors, denying them labor rights, Human Rights Watch said in a report released today.
The 155-page report, “‘The Gig Trap’: Algorithmic, Wage and Labor Exploitation in Platform Work in the US” focuses on seven major companies operating in the US: Amazon Flex, DoorDash, Favor, Instacart, Lyft, Shipt, and Uber. These companies claim to offer gig workers “flexibility” but often end up paying them less than state or local minimum wages. Six of the seven companies use algorithms with opaque rules to assign jobs and determine wages, meaning that workers do not know how much they will be paid until after completing the job.
“Digital labor platforms have created a business model that evades employer responsibilities while keeping workers under tight algorithmic control, driven by opaque and unpredictable decisions,” said Lena Simet, senior researcher on poverty and inequality at Human Rights Watch. “They promise flexibility but, in reality, they leave workers at the mercy of unstable and subminimum wages, little social protection, and in constant fear of termination without recourse.”
Workers for the seven platforms examined are assigned orders, supervised, paid, and fired by algorithms. All except Amazon Flex, which uses a flat hourly wage, use opaque and frequently changing algorithms to calculate pay per job or shift. Apps and platforms are designed to keep gig workers on the job for long hours and low pay, and dynamic pricing algorithms make it extremely difficult for them to plan their schedules and manage their earnings. Managed by algorithms, workers cannot fully understand how they are assigned work, or how their wages are calculated. Without any transparency, it’s extremely difficult for them to challenge decisions made about their work or pay.
Human Rights Watch examined the working conditions of ride-hailing, shopping, and food delivery workers, with a focus on Texas. The report is based on semi-structured interviews with 95 platform workers in Texas and 12 other US states, as well as a survey of 127 workers in Texas.
Low wages, algorithmic control and barriers to unionizing trap many workers in economic insecurity, even as multi-billion-dollar companies expand their market share and revenue, Human Rights Watch found.
Weak regulations allow these companies to misclassify workers as independent contractors rather than employees, despite the nature of the work and degree of control exercised by the companies often meeting legal criteria for employee status. This enables companies to avoid compliance with minimum wage laws, overtime pay, and contributions to nonwage benefits. For workers, it means providing their own vehicles, fuel, insurance, and maintenance as well as paying the employer’s share of Social Security and Medicare contributions.
The Texas workers surveyed earned nearly 30 percent below the federal minimum wage and about 70 percent below what the Massachusetts Institute of Technology estimates is a living wage in Texas. These findings reinforce those of local governments, academic institutions, and policy researchers, who have consistently found that these workers earn at or below local minimum wages and well below the thresholds needed for a decent standard of living.
The US is home to one of the largest global markets for digital platform work, and the number of people earning income from gig work has surged in recent years. Estimates suggest that by 2021, 16 percent of US adults had worked for a digital labor platform at least once. Platform workers are disproportionately Black or Latinx and live in lower income households.
Workers who responded to the Human Rights Watch survey received an average of US$16.90 per hour (including tips), but nearly half of that was spent on work-related expenses. After accounting for nonwage benefits that employers often cover for other workers, their effective pay fell to $5.12 per hour. Some workers reported earning nothing at all after expenses.
Three-quarters of surveyed workers said they struggled to pay for housing in the last year, and most reported difficulty paying for food, groceries, electricity, and water. More than one-third said they would not be able to cover a $400 emergency expense.
Workers told Human Rights Watch they lived in near-constant fear of being “deactivated” or fired by an app, often without explanation or recourse. Nearly half of those who had been automatically fired were later cleared of wrongdoing, suggesting a high rate of erroneous account deactivations.
The financial insecurity of platform workers stands in stark contrast to the soaring revenues of the companies themselves. Uber, which holds a 76 percent share of the US rideshare market, reported $43.9 billion in revenue in 2024, a 17.96 percent increase from the previous year, and a net income of $9.8 billion. As of April 2025, Uber has a market capitalization of $169.41 billion. DoorDash, with 67 percent of the US food delivery market, recorded $10.72 billion in revenue in 2024 and as of April 2025 was valued at $81.03 billion.
By misclassifying workers as independent contractors, platform companies also avoid contributing to Social Security, Medicare, and unemployment insurance, depriving public funds of critical resources. Based on tax data from the Census Bureau’s Nonemployer Statistics, Human Rights Watch estimates that Texas could have collected over $111 million in unemployment insurance contributions between 2020 and 2022 from platform companies if rideshare, delivery, and in-home platform workers had been classified as employees. The actual shortfall is likely much higher when accounting for unreported income.
In response to Human Rights Watch’s request for comment, Lyft said: “App-based work provides millions of Americans uniquely flexible work opportunities, leaving room for them to meet other goals, commitments, or obligations. It allows them to work around their many real and unpredictable commitments and their busy schedules in ways that traditional 9-5 jobs don’t provide.” Amazon met with Human Rights Watch to discuss the report but did not give an on record response. The other companies did not reply.
International human rights law requires just and favorable working conditions for all workers, including workers for digital platforms.
The US Department of Labor, the Federal Trade Commission, the Texas Workforce Commission, and equivalent agencies in other states should take immediate steps to ensure workplace safety for gig workers and protect their rights to unionize, Human Rights Watch said.
“Digital labor platforms have created a workforce with none of the rights and protections that workers have fought for over decades,” Simet said. “As more people are drawn to platform work to make ends meet, federal and state authorities should step up to guarantee them the protections they are entitled to, and should work with the International Labour Organization to establish a binding global standard for platform work.”
