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Major digital labor platforms in the United States—including Uber, Lyft, DoorDash and Amazon Flex—are systematically misclassifying gig workers as independent contractors, denying them basic labor protections and enabling exploitative practices, Human Rights Watch (HRW) said in a report released Monday.
The 155-page report, The Gig Trap: Algorithmic, Wage and Labor Exploitation in Platform Work in the US, focuses on seven leading companies. It outlines how these platforms use opaque algorithms to assign work and determine pay, often leaving workers earning less than local minimum wages.Â
Based on interviews with 95 workers across 13 states—most of them in Texas—HRW found that many gig workers live in economic precarity, without health benefits, job security or clear information about how much they will earn.
“These companies promise flexibility but leave workers at the mercy of unpredictable, opaque systems that set wages and hours with little oversight,” said Lena Simet, a senior researcher at HRW. “The illusion of autonomy masks algorithmic control and financial vulnerability.”
Among the companies studied, only Amazon Flex offers a flat hourly wage. Others rely on dynamic algorithms that calculate pay only after a job is completed, preventing workers from knowing in advance how much a task will earn. Many reported net pay as low as $5.12 per hour after expenses—below the federal minimum wage of $7.25 and nearly 70 percent less than the estimated living wage in Texas.
About three-quarters of workers surveyed said they struggled to afford housing, and more than one-third said they could not cover a $400 emergency. Many feared losing their accounts—effectively their jobs—without warning or recourse, due to algorithmic decisions. Nearly half of the deactivated accounts were later reinstated, raising concerns about systemic errors and lack of accountability.
Meanwhile, the platforms continue to thrive financially. Uber, which holds 76 percent of the U.S. rideshare market, reported $43.9 billion in revenue for 2024 and a net income of $9.8 billion. DoorDash earned more than $10 billion and controls 67 percent of the U.S. food delivery market.
By classifying gig workers as independent contractors, these companies also avoid contributing to Social Security, Medicare, and unemployment insurance. HRW estimates Texas alone lost more than $111 million in unemployment contributions between 2020 and 2022.
In response, Lyft defended its contractor model, citing flexibility for drivers. Amazon engaged with HRW about the findings but did not offer an official comment. Other companies did not respond to requests for comment.
The human rights watchdog is urging federal and state authorities to enforce existing labor protections, mandate algorithmic transparency, and reclassify gig workers as employees. It also calls on the U.S. to support a binding international labor standard on platform work through the International Labour Organization.
“As more people turn to gig work to survive, governments must act to ensure dignity, stability, and rights for all workers,” Simet said.
