How the gig economy is changing the way we work and live
The profile photos at taskrabbit.com will feel familiar to anyone who has ever used Facebook. But the people in them aren’t looking for friendship, but rent money. Prices per hour are listed beside each person’s beaming face, followed by the percentage of positive customer reviews they have received. Most of the cheery people are pitching their services — whether it’s doing laundry or, as Taskrabbit advertised ahead of Fashion Week this month, being your Instagram husband — in the $20 to $30 range. But the company, which describes itself as “revolutionizing everyday work,” takes a 30 percent cut.
Not all revolutions are for the better.
If Silicon Valley has its way, this is what the proletariat — or, as some put it, the precariat — of tomorrow will look like: No uniforms. No hard hats decked out in union decals. No set workplace, really. Just a roving mass of underemployed laborers, recruited to advertise their smile online. Digital binders full of workers.
It goes by a few different names — sharing economy, on-demand economy — each of which tend to emphasize a different relationship in a triad among consumer, software platform and worker. For simplicity’s sake we’ll call it the gig economy, but it’s really just plain 19th-century-style exploitation dressed up in techie garb, harkening back to ye auld days before the labor movement won things like the eight-hour work day, the right to unionize, pensions, health care benefits, workers’ compensation, unemployment benefits and job security.
“Nearly 35 percent of today’s total workforce is composed of non-employee workers,” found a February survey from researchers with Ardent Partners and Fieldglass, which designs vendor-management systems (a fancy way of saying software used to hire temp workers). That figure includes freelancers, independent contractors and temporary workers.
The financial software company Intuit predicts that the number of contingent workers in the United States “will exceed 40 percent of the workforce by 2020,” and that it will also increase worldwide.
Silicon Valley is taking advantage of the 2008 recession that pushed workers off payrolls and into a precarious job market where there is less work to go around and wages aren’t close to what they used to be.
“Part-time and contract jobs in the past tended to rise during recessions and recede during recoveries,” the Associated Press noted in 2014. “But maybe no longer: Part-time workers have accounted for more than 10 percent of U.S. job growth in the years since the recession officially ended in June 2009. Meanwhile, union membership has been sliding steadily since the mid-1980s.”
In order to get by, today’s labor force has to take what it can get. More and more, they’re turning to the gig economy.
A survey conducted last year by Intuit found that 3.2 million people are currently working in the gig economy. It estimated that number will reach 7.6 million within the next four years.
“The typical workweek includes a mixture of: on-demand work (34 percent), a traditional full or part-time job (30 percent), contracting and consulting (19 percent), and running a business (14 percent),” the researchers noted.
“The on-demand economy is reshaping the way people earn a living, take control of their careers and support their families,” Intuit vice president Alex Chriss, general manager of Self-Employed Solutions, expounded in a press release. “[P]eople have more opportunities than ever to supplement existing income streams or to take the leap into being their own boss. But we must also recognize the shadows that have emerged. The benefits infrastructure of a generation ago was not built to accommodate the reality of work today.”
You are a commodity
Silicon Valley has become adept at sucking value out of nearly everything. Ebay was an early pioneer of this business model. Got a box of old GI Joes in your basement? Sell ’em on eBay. Airbnb applies this concept to your home. Got an extra room in your house? You can become a freelance hotelier. Uber does the same with cars. Become a taxi driver and pay off that loan on your Mazda. It is as if Silicon Valley can allow no commodity to exist without every possible penny being squeezed out of it.
Now it is applying this model to people.
“I’ll go and do a task for Taskrabbit on my lunch break, and then I’ll go back to work,” Niyya, a Brooklyn native in her twenties, told The Indypendent. In addition to holding two steady part-time jobs, she is also going to school, and fitting in gigs through the hiring platform. “My mom has worked two jobs for like 20 years each. But I feel like, for our generation, there are very few jobs to go around. There are no long-term possibilities. You have to find something else to supplement your income, because the wages aren’t stable.”
Whether it’s by performing previously professionalized jobs like providing taxi rides or hammering shelves to a wall, many workers in today’s economy cannot allow their free time to go by without turning it to dollars. Silicon Valley is there to help, provided it gets to wet its beak.
The hiring platform Thumbtack inverts Taskrabbit’s business model. Freelance workers, not the consumer, pay to use it, purchasing credits that they use to apply for mostly temporary, menial tasks — which they will not necessarily be hired to perform.
As cultural commentators such as Douglas Rushkoff have pointed out, despite claims of being part of a sharing economy, many of these companies have actually usurped platforms that provided their services for free. Before Taskrabbit and Thumbtack began connecting cash-strapped freelancers with gigs for a profit, there was Craigslist, which has never charged users a dime. Before there was Airbnb, there was couchsurfing.org, a social network that connected millions of travelers around the world with places to crash. Once a nonprofit, couchsurfing.org eventually tried to follow Airbnb’s path. It raised $25 million in venture capital and changed its domain to couchsurfing.com.
Gig-economy platforms pitch their services as digitally innovative, providing flexibility to workers and greater convenience to customers. But as modern as the CEOs of billion-dollar startups want the gig economy to appear, it is actually turning back the clock on the gains workers fought for and won over the past 150 years.
Conquering the World on Workers’ Backs
Illustration: Gary Martin
“They want all the benefits of being a service provider without any of the responsibilities of being a service provider,” said Tom Slee, a software engineer and author of What’s Yours Is Mine: The Dark Side of the "Sharing Economy". “Uber is taking 30, 35 percent of the amount of any fare. Airbnb takes about 13 to 15 percent of any rental. They’re involved in every transaction. They take a significant amount of money from every transaction. Yet when push comes to shove, they want to say, ‘This is not our responsibility and we want nothing to do with it if anything goes wrong.’ A well-presented platform can be quite useful to people who have skills to promote, but these current ones end up being [based on] a largely exploitative model.”
Uber, valued at $68 billion — more than any other privately held company in the world — sets the standard in the gig economy. It has argued that its drivers are not employees, but independent contractors using its network. This allows them to evade taxes, licensing laws in most areas, and a whole slew of labor regulations.
“If you call your workers contractors and they believe you, you’re denying them access to rights as an employee,” said Zubin Soleimany, an attorney with the New York Taxi Workers Alliance, which is pursuing several legal claims against Uber for violating basic workers’ rights.
The alliance filed a class-action lawsuit against Uber on behalf of its 35,000 New York City drivers in June, accusing it of failing to pay minimum wage or overtime and not reimbursing drivers for expenses such as tolls or the high-end vehicles the company pushes its workers to purchase upon enlistment.
“Behind every customer seeking a fast ride is a worker, often working 60 to 80 hours a week, who is denied the basic rights of being an employee,” the suit states.
One such person is D., an Uber driver about 60 years old who also works for several other platform-based cab services, and declined to be identified for fear of retribution from the company.
“We don’t get no job protection,” D. said, speaking in Lower Manhattan. “We don’t get no retirement. We don’t get no bonus. What we get is a lot of work. A trip from here to Williamsburg in a yellow cab costs $10 to $15. On Uber, it’s $7. I will start work at two in the afternoon, and by midnight I will have $300, not including payment for tolls, not including gasoline, not including payment for the car, not including Uber fees. But by then, I’ve got to keep working because people are coming out of the bars. And I need the money. All told I put in 16- to 18-hour days. I live in the car.”
The cash-flush company’s low fares have helped it undercut competition, giving it a near-monopoly among app-based car services (89 percent of U.S. market share) and making it increasingly difficult for traditional cab companies to get by. Having essentially cornered the market across the U.S., Uber is expanding globally. It now operates on five continents. Its cheap rides allow it to conquer competition, and its empire is built on the backs of workers who are scrimping to get by.
What’s more is that once drivers are kicked off of Uber’s network — typically, for failing to meet the company’s secretive and largely arbitrary star-rating standards — they are “left to hang out to dry,” as the Soleimany put it.
The Taxi Workers Alliance also filed a complaint in July against New York Governor Andrew Cuomo and the state Department of Labor on behalf of two former Uber drivers who have waited months to receive unemployment benefits. Though the handbook for claimants says that it takes three weeks to six weeks to settle an unemployment claim, the department has refused to inform the drivers whether or not they are eligible. Instead, they were told by email that all unemployment claims by Uber drivers are under “executive review” and cannot be processed. The complaint charges the department with refusing to investigate Uber’s misclassification of its employees as independent contractors.
Cuomo denies playing a role in the department’s policies, but it is under his authority, and the governor has praised Uber as “one of these great inventions, start-ups, of this new economy.” He backs legislation that would erase a ban on private “transportation network companies” outside New York City. Uber and Lyft have lobbied heavily for the bill, as it would let them expand their business model to upstate.
The Price of Convenience
Though premised on exploitation and a Randian quest for world domination, the gig economy does offer consumers greater convenience — assuming they can afford surge rates for taxis whenever it rains, and are fine with a housing shortage that increases rent for vacant apartments in their neighborhood because landlords are operating illegal hotels for Airbnb tourists.
The gig economy is great for consumers, unless you are a person of color, rejected because of your profile picture — a problem Airbnb only announced it has begun to address this month. Or if you are disabled, as Elizabeth Ramos found out after repeatedly trying to hail a wheelchair-accessible Uber ride last summer.
“Uber is known for being a little more economical,” Ramos, who has severe scoliosis, told the NY Daily News. “Not having them defeats the purpose for people like myself, for people in a wheelchair, to live a normal life.”
Ramos is suing Uber, arguing that the app is a public accommodation like any other taxi service, and is thus subject to the federal Americans with Disabilities Act.
Even assuming the gig economy makes consumption easier for those who can afford it, it is almost as if consumers are being asked to take Jello Biafra’s 1980s quip, “Give me convenience or give me death,” literally. What price does this new world of having goods and services at our fingertips come at, if it unravels our basic social fabric?
The real cost of the gig economy, if we are to believe those who see its share of the overall workforce growing perpetually over the coming decades, might not be fully apparent until Taskrabbit workers like the Niyya reach their seventies. What will happen to millions of workers who reach retirement age without funds to cover living and health-care expenses? Will they still be hopping here and there performing low-paid tasks until they need walkers?
Lessons of the Past
The gig economy’s prophets say they are concerned about the workers of the world, too.
“[W]e must find a path forward that encourages innovation, embraces new models, creates certainty for workers, business, and government and ensures that workers and their families can lead sustainable lives and realize their dreams,” reads a statement on “principles for delivering a stable and flexible safety net for all types of work” signed last November by several Silicon Valley CEOs, including those for Lyft, Handy and Etsy, along with leaders of the Service Employees International Union, the National Domestic Workers Alliance, and the National Guestworker Alliance.
The letter lists some lofty-sounding principles, but it raises more questions than it answers:
Who should contribute financially (and how much)? What type of organization (or organizations) should administer these benefits and protections? What type of legislative or regulatory action is required to create or enable this model while allowing for experimentation and flexibility? We believe these issues are best pursued through policy development, not litigation, with an orientation toward action in the public, private and social sectors.
Rather than reinventing the wheel, however, perhaps gig workers stand to gain the most the way the labor movement always has — by organizing.
The Taxi Workers Alliance has made inroads in organizing Uber drivers in New York and staged a one-day strike in February, but so far, Silicon Valley has been successful in using America’s weak labor movement to its advantage.
When, in May, Uber announced it would grant its drivers the option of joining the new Independent Drivers Guild, the New York Post editorial board worried that unionized cabbies could lead to the company’s downfall. But the Post has little to fear. As Taxi Workers Alliance executive director Bhairavi Desai observed, the guild, though organized through the Machinists Union, receives the bulk of its funding from Uber.
“It’s essentially just an old-fashioned company union,” she said.
There are some success stories.
Bikers with the London-based food delivery service Deliveroo managed to fend off wage cuts last month with a six-day strike. They used a crowdfunding site on the Internet to solicit contributions for their strike fund.
Workers’ movements in the past have sought to own the means of production. Today, that includes owning the software. Visitors to internetofownership.net will find a global database of service platforms that offer ownership and work-related democracy to their participants, an emerging movement known as platform cooperatism.
Gig-economy workers are up against billions of dollars in capital and the political power that comes with it. Yet, their success might just depend on something for which there is no app: building collective power.
“There are ways for people to push back, it’s the same old ways as before,” said Tom Slee. “It’s acting together, acting collaboratively, whether through unions or otherwise. It’s a combination of direct means and lobbying for regulatory protection as well.”