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How yet another gig company is changing rates and hurting workers

The transcription service unexpectedly changed its pay structure this week, following in the footsteps of Instacart and other gig platforms.

How yet another gig company is changing rates and hurting workers
[Photo: firebrandphotography/iStock]

For more than two years, Li Zilles has relied on transcription service Rev to pay rent. To make about $500 a week, Zilles had to work anywhere between five and eight hours a day, transcribing a total of 64,000 minutes spread across more than 1,700 jobs.

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Until Friday, human transcribers such as Zilles could earn at least $0.45 for every minute of audio transcribed through Rev, whose customers include journalists, academics, and lawyers. But last week, Rev dropped the minimum pay to $0.30 per minute with little to no warning, issuing an announcement two days earlier on an internal forum that Zilles says many people don’t check frequently.

The new pay structure could significantly impact earnings across the board. “People are extremely upset about it,” says Zilles, whose Twitter thread made the rounds in media circles earlier this week. “I pretty much expect the income that I could get from this to drop at least 25%, if not more.” (Since Zilles tweeted about Rev’s decision, more than 400 customers have signed a petition to reverse the pay cut.)

Rev is just the latest gig company to change how it compensates workers. Last week, after Instacart shoppers went on strike to protest declining tips, the company axed a $3 “quality bonus” awarded to its highest-rated shoppers. In an open letter, more than 200 shoppers implored Instacart CEO Apoorva Mehta to increase the default tip from 5% to 10%. For many gig workers, tips can account for a significant portion of their pay, since they’re broadly exempt from minimum wage laws. And then there were the Lyft and Uber strikes earlier this year—a response to their respective initial public offerings—which protested low wages and long hours.

From Uber to Instacart, these gig companies often appeal to workers who seek flexible hours or an additional income stream. Working for Rev was especially attractive to Zilles, who had just finished grad school and was searching for a steady gig. But as workers become reliant on these platforms, they’re more susceptible to sudden pay cuts, given they lack the protections afforded to full-time employees.

Rev promises its customers 99% accurate transcriptions at an affordable rate of $1 hour, by relying on a network of 40,000 transcribers, in contrast to other services that use voice recognition software. (Other companies use human transcribers, such as TranscribeMe—but most of those platforms either charge more than Rev or have longer turnaround times.)

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The company uses an algorithm to evaluate audio quality and prices transcription accordingly. That means the most difficult transcriptions—files with poor audio quality or many speakers—can be priced at $0.75 per hour for the translator or higher. But some of the most lucrative jobs involve audio files that are so challenging to transcribe that they’re not worth the time, Zilles says. They also say the algorithm Rev relies on to determine pricing can be unreliable. “Some of the $0.30 have terrible audio and 20 speakers, and there are higher-paying jobs that are inexplicably pretty clear.”

In the company’s internal announcement, Rev frames its decision to widen the pay scale as a way to compensate workers more fairly, while encouraging veteran transcribers to take harder jobs. “As Rev grows, we’ve noticed that the way we price projects is increasingly causing difficult jobs to not pay enough for the time and effort needed,” the announcement reads. Rev claimed the path to compensating its transcribers more fairly was by “paying more for difficult jobs and less for easier jobs.”

In a statement to Fast Company, a spokesperson from Rev added that the change would actually increase pay by 36% in some cases. “A very small percentage of jobs have been lowered, and it’s important to note that these rates can, and often do, increase over time to much more than the originally posted amount,” the company said. “Our freelancers have visibility into the details of each project—including length, difficulty and pricing—before they accept a job.”

But some people doing the transcribing don’t agree. “If they wanted us to deliver some of these files that they’re calling more difficult at the same quality standard, they would take like two or three or four times as long or more, depending on the file,” Zilles says. “So we’re not picking those files up because they’re paying maybe 10 cents more—they’re not paying four times more.” Meanwhile, the easier jobs, which are in high demand, are now worth less.

Yesterday, Gizmodo published an anonymous note from a Rev transcriber who revealed that the minimum pay is now even lower for transcribers who are new to Rev. Their rate was cut from $0.38 to $0.20.

Gig workers are, by definition, at the mercy of platforms that have the power to upend their steady source of income. To build up pools of workers, some companies offer higher rates at the outset. But over time, many of these workers say they start to see diminishing returns. “So many of these folks are being managed by algorithms and apps,” says Lauren Casey, a lead organizer at Gig Workers Rising. “There’s a race to the bottom to see how far they can cut pay and keep people on the platform. I also think a lot of these platforms have cyclical and manipulative algorithms. The first six months, pay can be pretty decent—and then over time, you notice your pay keeps slipping, and you have to work longer and longer hours to make ends meet.”

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People who order groceries through Instacart are paying for convenience, but they may have little insight into how shoppers are paid, or how much they rely on tips. That means customers are likely to opt for the default tip, if they tip at all. (Instacart makes a point of noting tips are optional.) The pay scale is opaque at Rev, too; users don’t know how much money transcribers actually pocket. “Price, ease of use, and fast turn around initially drew me to Rev.com, and frankly I had no idea how they could deliver so inexpensively,” one customer wrote in a comment on the petition. “Now that I understand, I’d pay double the current rate for the same quality and speed—but only if they split 50-50 with transcriptionists.”

There is also often a disconnect between the workers transcribing those meeting notes, or tracking down your favorite brand of baby wipes, and the tech workers designing the platforms, who may have a limited understanding of what gig workers actually experience on the job. And as contractors, gig workers also don’t have a physical office where they can organize or even commiserate with each other. (That’s why a group such as Rideshare Drivers United, for example, started an app to help organizers connect with Uber and Lyft drivers.) Casey believes gig companies benefit from this structure, which leaves many of their workers isolated and makes it harder for them to take collective action.

Rev, for its part, told Fast Company that it “[welcomed] feedback on these changes and will continue to make adjustments in order to ensure our freelancers receive fair pay.” But Zilles claims Rev has just one moderator fielding hundreds of comments in the internal forum, where they made a request for feedback. “I think they’re making a lot of data-driven decisions on the inside,” Zilles says. “Maybe a community moderator shouldn’t be doing this. Maybe you should have a UX researcher doing this work if that’s what you actually care about.”

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About the author

Pavithra Mohan is an assistant editor for Fast Company Digital. Her writing has previously been featured in Gizmodo and Popular Science magazine.

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