Uber suffered a legal blow this week when a California judge granted class action status to a lawsuit claiming the car-hailing service treats its drivers like employees, without providing the necessary benefits.
Up to 160,000 Uber chauffeurs, or "driver-partners" in company-speak, are now eligible to join the case of three drivers demanding the company pay for health insurance and expenses such as mileage. Some say a ruling against the company could doom the business model of the on-demand or "sharing" economy that Uber, Upwork and TaskRabbit represent. Homejoy, an online platform for house-cleaning services, recently shut its doors over a similar issue, claiming that it lost the support of crucial investors.
Whatever the outcome of these specific cases, it's unlikely to reverse the most radical reinvention of work since the rise of industrialization — a massive shift toward self-employment and self-management in open networks enabled by information technology. It's not a trend driven solely by these tech companies.
Buzzwords like a "gig-based lifestyle" and the "sharing economy" are indicating that seemingly natural institutions like employment, corporations and social welfare might soon turn into niche players. Where have all the workers gone?
2015: THE BREAKTHROUGH OF THE GIG ECONOMY
In July, Democratic presidential front-runner Hillary Clinton climbed the steps to her podium at NYC’s New School to talk economics. She promised to “crack down on bosses misclassifying workers as contractors” and targeted the gig economy. It should no longer be allowed to threaten well-proven labor practices.
What Clinton was not acknowledging is that the prototypical contract between the workers, who accepted their role as cogs in the machinery of the industrially-shaped organization in return for a middle-class living, has been lying shattered for a while. Since the liberalization of world markets and the rise of information technology during the ‘70s, automation and outsourcing played it rough on corporate jobs.
In place of the traditional notion of long-term employment and the social and other benefits that came with it, app-based platforms have given birth to the sharing economy. Uber and Lyft connect drivers to riders. TaskRabbit helps someone who wants to remodel a kitchen or fix a broken pipe find a nearby worker with the right skills. Airbnb turns everyone into hotel proprietors, offering their rooms and flats to strangers from anywhere.
NEW DREAMS FOR FADING MIDDLE CLASSES
The inherent promise is to democratize the access to service luxuries, in the same manner as the Fordist arrangement enabled the masses to own cars and to live the suburban dream. Workers can create a living through a patchwork of contract gigs. They become self-dependent and can dip into new professions easily. Occasionally, they treat themselves with a stay in a fancy Airbnb treehouse or have a TaskRabbit to restock their fridge.
Thus far, the industries where this transformation has occurred have been fairly low-skilled, but that's changing. Start-ups Medicast, Axiom and Eden McCallum are now targeting doctors, legal workers and consultants for short-term contract-based work.
This work/life-style may be embraced by young bohemians, single mothers or pensioners who want to earn an extra dollar, but critics fear that insecure wages, the loss of social security and permanent competition wield pressures to most. After all, in this model companies owe nothing to their workers but a paycheck. Most worryingly, a growing precariat may be unable to politically address increasing inequalities, because they are masked beneath the promise of pervasive service luxury for everyone.
WILL THE COMING WAVE OF AUTOMATION FLUSH AWAY LABOR?
With the next round of automation and virtualization adding to the picture, many augurs fancy a more collaborative sharing economy dawning on the horizon. A widely received study of the University of Oxford estimates that within the next fifteen years, about 47 percent of total U.S. employment is at risk of substitution by intelligent robotics, big data algorithms or the Internet of things.
Take the example of UPS drivers: On the surface UPS trucks look the same as they did 20 years ago — brown and chunky. But today, the truck is full of sensors that record the driver’s every step — whenever he opens the door, buckles his seat belt or starts the truck, he leaves a data trace. Big Brown’s comprehensible rationale is that just one tiny minute each driver is saving over a day adds up to a total of $14.5 million over the course of a year. The human downside is that the former masters of the urban jungle have turned into package runners. While they frantically fixate their handheld computers for directions, they are already dreading their supervisors telling them to back up less frequently before they clock off.
At the other end of the social stratum, the staff-heavy work in law firms is located in the initial phase of a case. This ordering and search for precedential is mainly done by young professionals who want to earn their spurs. In a few years intelligent algorithms will be able to assume this task within almost no time, reducing the need for labor in law firms considerably. Feel free to construct similar analogies with an arbitrary list of doctors, social scientists, journalists and the like.
Blue collar work is about to be technologically de-skilled up to a point where humans become the errand boys of intelligent machinery before they are discarded by the next wave of innovation, while high-skilled work is robbed of its routine parts. Since we are carrying our computers in our pockets, the edges between work and free time are visibly blurring. For the time being, information technology decouples work from steady wages, while eventually it may eradicate the need for human labor altogether.
Indeed, digitalization has turned out as one huge narcissistic injury for human beings. Our self-image is largely based on the principle that we regard ourselves as the smartest beings on the planet. Now we are designing machines and eventually creatures that are cognitively superior to us in many ways. We will have to abandon the modernist fetish of us as "Super-Rationals" by creating a new self-understanding. The only open alley remaining is to perceive us to a much greater extent as social, empathic and sentient beings. The odds are good that we will turn out to be more unpredictable, anarchic and surprising.
SHARING INTO THE ABYSS
The New Work Movement formed by philosopher Frithjof Bergmann in the late 1980s has envisioned the reduction of weekly working hours in turn for new means of high tech self-providing with 3D printers and the like. More recently the futurist Jeremy Rifkin highlighted that consumers and producers are becoming one: prosumers.
The vanguard of this development can be seen, as prosumers are producing and sharing music, videos, news and knowledge. But this is not restricted to information goods only. Renewable energy, 3D printable products and online college courses might be next. Inspired by the idea of the collaborative commons, people are beginning to share cars, homes, clothes and tools, outstripping the traditional market economy.
Observant critics, like the essayist Evgeny Morozov or the philosopher Byung-Chul Han, have pointed to the dark side of the evolving sharing economy. Instead of collaborative commons they envision a total commercialization of intimate life, where the human psyche works as a productive factor. On the one hand, popular platforms like Uber or Airbnb pervert their respective initial collaborative ideas of car sharing and couch-surfing/hospitality, price them and turn them from shared goods into commercial products. On the other hand, even humble kindness is commercialized through pervasive mutual evaluation.
In short: The extremes are dominating the debates. One side contends this sweeping change augurs a future of job insecurity, impermanence and inequality. Powerful online platforms will take over the role of today’s multinationals and build an oligopoly. The others see it as the culmination of a utopia in which machines will do most of the labor and our workweeks will be short, giving us all more time for leisure and creativity.
MANAGERS — COUNSELERS — EVERYONE
Both of these extremes seem to miss the mark. In my view, the most decisive development underlying the discussion is the need for workers self-organization as the artificial wall between work and life dissolves.
The development of the relationship between managers and workers is marked by three steps: from controlling and planning vs. doing as you’ve been told, to counseling and mediating vs. self-controlling teams and finally a model where management as a profession is abolished and everyone becomes a manager, at least from time to time.
Workers themselves, especially millennials, are increasingly unwilling to accept traditional roles as cogs in the corporate machinery being told what to do. Today, 34% of the U.S. workforce freelances, a figure that is estimated to reach 50% by 2020. That's up from the 31% estimated by the Government Accountability Office in a 2006 study.
Socialized in the midst of the information revolution, Millennials grew up in parallel to the birth of a new human age. They perceive a fundamentally different world, time and space than the previous generations. Carrying all the knowledge of the world at their fingertips, they have no stomach for the props of modernity: experts, lectures, texts, rigid affiliations, standardization and massification.
The toughest tension for workers now is to balance private and work-related demands although they are intrinsically interwoven. The choice of what, how, with whom and when to work sounds appealing, but it is tough to learn. Hierarchy in the end guarantees a certain security and lends a lot of stability. At least there is always someone up the ladder to blame. How are people integrating the demands of the new world of work? And how should we organize an economy dominated by online platforms?
FROM SELF-EMPLOYMENT TO SELF-ORGANIZATION
Gig work is not the only alley beyond hierarchical organizing. Networked experiments happen in different parts of our society: peer to peer and open source projects, social entrepreneurship initiatives, bartering circles, fab labs, food coops, collaborative housing, talent marketplaces, urban gardening, virtual worlds, self-organized schools or new forms of lending, to name a few.
Frederic Laloux and Gary Hamel have shown in their impressive research that a surprisingly high number of traditional companies have acknowledged this reality as well. They have abolished permanent management and staff functions to hand these responsibilities over to self-managing teams. Without job titles, team members flexibly adapt their roles, engage in decentralized decision making and conflict resolution, hire people and purchase investments.
As such, it may be the fulfillment of Peter Drucker’s organizational vision “… in which every man sees himself as a ‘manager’ and accepts for himself the full burden of what is basically managerial responsibility: responsibility for his own job and work group, for his contribution to the performance and results of the entire organization, and for the social tasks of the work community.”
A SILENT REVOLUTION
Don’t expect any kind of revolution that starts with a movement, translates into parties and struggles for power within the state. There will be no rejuvenated workers revolution, no simple categories like left and right. Rather think of dispersed and networked experimentation from below. Expect variety, contradiction, chaos, euphoria and blind alleys. To define rough contours, take a look at bold frontrunners like the programmer’s repository Github or computer game designer Valve.
Institutionally, both represent conventional companies. Their unique feature is that they are trying to manage without a caste of managers. Employees self-organize and work on projects of their own choice 100% of the time. Moreover, they are obliterating the boundaries of what a company can be. Of Github’s more than 300 employees, only a third are working in the central office, the rest are scattered globally. Furthermore, it has built an open source community that collaborates on millions of code repositories. Where does the firm end, to whose needs does it cater, who is eligible for strategic decisions?
Valve in turn is most famous for its digital game store Steam. With well over a 100 million users and an estimated market share of around 75% of games bought online for the PC, it is at first sight an example of first mover monopoly on digital markets. Nevertheless, Steam has spilled over amazing side effects. Reams of gamers are designing, bartering or trading virtual items and mods. With this “hobby,” some of them are earning more than with their actual jobs.
People are melding passion, joy and self-determined work. Think of it this way: In a lab-like environment, massive multiplayer online games like "EVE Online" foreshadow how we will soon have the option to make a living in virtual worlds. In this sci-fi universe, hundreds of thousands are conventionally leveling up their spaceships, but simultaneously they act as in-game photographers, politicians, historians, newbie shepherds, designers or e-sport pros.
A FAREWELL TO MARKETS: WELCOME ECONOMIC ECOSYSTEMS
The economic term referring to the ongoing transformation of how goods and services are produced is platform capitalism — an app and the engineering behind it bring together customers in neat novel economic ecosystems, cutting out traditional intermediaries, like traders. Its development unfolded in three steps, symbolized by the popularity of corresponding buzzwords.
First, the "sharing economy" phase, where people discovered the power of the Web to offer their couches to fellow travelers or to share a ride. This was followed by the "collaborative economy" and the entrance of profit-oriented platforms, like Uber or Airbnb, who offered earnings to people in this process. The third chapter was written by Upwork and the other players of the "on-demand" or "gig economy," who are connecting freelancers with customers.
Presently, we will all be spectators watching the triad Google-Amazon-Apple racing for hegemony in the coming platform capitalism. The business model is to build economic ecosystems that allow others to earn money, whereby the access to and process along the way of transactions is strictly controlled. These meta-traders thrive on one of the most carefully tended economic taboos. Namely, markets, which function on the basis of scarcity, have always tended towards monopoly, not competition, once they grow mature.
Today, in an age of abundant information and zero marginal costs monopoly is the inevitable and immediate reward for the first successful mover. Antitrust regulation has become toothless. There is no such thing as a vibrant digital market, only a successive series of monopolies. Google anxiously waiting for the next start-up to disrupt its search engine market, so to speak.
In his recent bestseller “Postcapitalism,” Paul Mason eloquently puts it like this: “The main contradiction today is between the possibility of free, abundant goods and information; and a system of monopolies, banks and governments trying to keep things private, scarce and commercial. Everything comes down to the struggle between the network and the hierarchy: between old forms of society moulded around capitalism and new forms of society that prefigure what comes next."
AVOIDING THE PITFALLS OF PLATFORM CAPITALISM
Speaking from the perspective of political economics, it will be essential to create sharing and on-demand platforms that follow a non-market rationale, such as through open source technologies and nonprofit foundations, to avoid profit overriding all other considerations. They could be developed within a core team accompanied by a wider fan community. The operating system Linux or the web browser Firefox have already proven the merits of such models.
It is frequently argued that freelancers are treated as second-class citizens in our tax and social systems. Some favor the introduction of a new class of dependent contractors. Social security measures like pensions or healthcare ought to be untied from employers, to make them portable and individualized.
As I’ve discussed, the dissociation of work from wages is an overarching development in our time of transition that would be better addressed by the launch of a basic income within the platforms. People working in the coming nexus of contributors/members/contractors/players should no longer be dependent upon paternalistic corporations or welfare states.
To address the blurred boundaries between professional service and amateurish bargaining, new network-style associations of practitioners could bolster newcomers by providing collaborative education and online courses, or set internal standards for minimum remunerations. They could also serve as a booster for groups of freelancers, offering packages that complement each other's services. Moreover, the platforms could co-create mediation bodies for clashes between freelancers and clients, thereby naming and shaming best and worst practices to develop a cultural code of conduct.
Finally, in times where we define social and empathic capabilities as the unique capacity of human beings, the most momentous development would be a new ethos for service work, turning it into the best-paid field of professions. Otherwise, we stand a good chance of ending up in a divided domestic workers’ society, which thrives on the commercialization of intimate life.
COMPLICIT GIGGERS
The old corporate man, who finds himself slightly bedazzled in the midst of a transformation into a self-organizing wo/men: What is he looking forward to? To him, the quest for success and the search for his soul, for his place and task in the world have become one. It is a challenging journey, with diminishing boundaries between work and life.
He has to be comfortable entering work with his full self. Not surprisingly, most self-management practices already under way allow people to bring personal issues into the workspace and are training their workers in conflict-resolution techniques. It has proven as a good way to be more present, when you talk about relationships or leisure passions with your colleagues.
People have to manage themselves to successfully become managers of others. They have to adapt to fluid hierarchies and most importantly, to get in sync with their passions. They are a key, albeit a dangerous one: for some difficult to find, for others an all-consuming fire, at times unsocial, but ideally a sweeping force to collaborate and create.
That’s so important because creativity is about to take the place of efficiency as the overarching economic mantra. Its economic rationale of "winner takes all” is increasingly transferred from the arts to other societal domains like academia or the media. Within the bulk, people are working under precarious conditions, dreaming about their future breakthrough. Meticulous day-to-day efforts are overshadowed by the exceptional.
As a consequence, gig workers have to be apt to participate with varying intensities in different networks. Most importantly, though, they have to be on the lookout for accomplices. In her own experience as a nomadic, internationally collaborating cultural theorist, Gesa Ziemer recognized that traditional notions like friendship, teamwork, colleagues or collectives were ill-equipped to characterize the kind of working relationships she had experienced. Consequently, she hijacked the term complicity from the criminal realm.
Accomplices act collectively in small groups, in an affective and aesthetic mode to creatively cross established frontiers; an intense, often times coincidental relationship with a clear cut once the complicity ends. Our unpredictable transitional time demands attentiveness for the emergence of co-creative journeys at any time and pushes the organizational man to morph into a complicit gigger.
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