The ‘Platformization’ of Work is a Boon, not a Bane
The right-minded detractors of giant digital platforms such as Uber or TaskRabbit often present the platforms as the embodiments of an evil trend. They conjure up a economic dystopia of poor powerless gig workers at the mercy of huge digital predators. The ongoing lawsuits to reclassify many of these independent contractors as full employees (Are Uber drivers employees?) with all sorts of rights further illustrate the controversies these platforms generate.
The platformization of work causes us to question the very meaning of work, employment, work relationships, insurance and the role of the state to protect a country’s workers. As Nick Grossman and Elizabeth Woyke explain in their already widely-discussed paper “Serving Workers in the Gig Economy”, the gig economy has completely unbundled the benefits and protections that have traditionally come with full-time employment, which means that “the different components of a job — income, structure, social connections, meaning, access to healthcare — which used to be bound together, are now becoming available from different places”. The platformization of work, with the emergence of web and mobile marketplaces and work platforms such as Amazon’s Mechanical Turk, UpWork (the freelancer marketplace), and on-demand service platforms like Uber, Handy and Doctor on Demand, has accelerated the shift in the past 2 to 3 years.
But the truth is that for low-qualified workers, the world before the digital platforms was MUCH WORSE… and if we all play our cards right and help policymakers make the right decisions these platforms can be an actual boon.
Here are 6 reasons why platforms are not necessarily bad news.
Platforms = Good News
1.There is just MORE work because of these platforms. Corporations have been reducing their reliance on full-time workers for a long time, but the development of the work platforms has made it easier for them to offer more work than before, work that would previously have been performed by overworked employees or work that would not have been offered at all. So more people have more work. As work can be unbundled into different tasks, in many shapes and sizes, there is less reluctance to hire someone to perform a task, that is not just window-cleaning. A wide array of jobs and tasks can easily be found on the platforms.
Case in point, WeSlash, a French platform that connects students to companies and startups that need a few hours of their time. Very few students in France used to have jobs before the platforms. It was not as common as in the US for students to have part-time jobs in France, most notably because high school and higher education schedules make it very difficult, and because odd jobs are a lot more rare. Not only can many students now have the extra revenues with the flexibility they need, but they also accumulate work experience that will make it easier for them to enter the job market. The youth unemployment rate is still 25% in France! (and even higher in Spain and Italy).
Likewise older low-qualified workers have a very high unemployment rate. So the more rigid the labor laws and the labor market (France is the best example here), the more value the platforms actually have.
2. Entire markets have been created or expanded exponentially. Uber was obviously bad news for the taxi industries in large cities. But what Uber has proven is that the market for chauffeured transportation was infinitely bigger than the taxi market in these cities, big enough for hundreds of thousands of new drivers. Hundreds of thousands! There are clearly less wealthy passengers that the taxis could never target. The network effects of two-sided markets simply expanded the existing market exponentially.
3. Platforms contribute to market transparency for better worker revenues. Founded in 2015, Dispatcher is a new app that matches gig workers with jobs. Its cofounders want to build a real-time labor exchange for the gig economy, similar to an ad exchange, to empower the on-demand workforce. It mediates the relationship between the worker and the work platform and serves as an ‘agent’ for the worker, helping him/her make the best decisions about where and when to work. “Our vision in the future is to potentially predict what are the best jobs based on location and time. So workers can pick and choose, essentially. It Uber’s paying me $20/hour while Postmaster, because it’s dinner, is paying me $30/hour, a worker may decide to do Postmates rather than Uber. Today, they don’t have that visibility. The thinking is that, with Dispatcher, when we become the labor exchange, that visibility will get exposed”, Robert Yau, Dispatcher’s founder explains. The critical vision of Dispatcher is that price transparency can be brought to the marketplace, to the benefit of the worker!
4. Platforms have made it possible for middle-class individuals to increase their revenues when these revenues had been stagnating or declining for decades. A large part of the independent contractors who find work on those platforms already have full-time or part-time jobs but want to or need to work more to increase their revenues. As is now well-documented, the revenues of middle-class Westerners have declined over the last two decades. To simply make ends meet, most people need to be very creative. The many platforms of the digital economy have made gigs and property-sharing sources of revenue (renting the things you own, as with Airbnb) easily available.
The ‘gig economy’ may include high-end and specialised work (graphic design and medical services for example), but it concerns overwhelmingly low-wage and commodity work (driving, delivering and traditional hourly shift work), which there hasn’t been enough of in the past decades.
According to a recent study by Freelancers Union and UpWork, in 2015, 54 million Americans — more than one third of the working population! — participated in some form of freelance work, which is largely due to the growth of the digital work platforms that have made this type of work so much more available.
5. The platforms have shifted control over working time to the workers’ hands. Scheduling had long been a particular challenge for regular hourly employees, who often found it impossible to work multiple part-time jobs simultaneously. Typically, low-wage Wal-Mart employees were forced to accept hard part-time schedules that made it impossible for them to have another job, even though they badly needed it. In the late 1990s, Barbara Ehrenreich, who investigated the lives of the working poor in America as an undercover journalist, published Nickel and Dimed: On (Not) Getting By in America.
The book became an instant classic. Barbara Ehrenreich described at length her experience as a cleaning lady and a Wal-Mart employee and showed all the hidden costs of being poor. What was clear in her book was that the total lack of control over one’s schedule is one of the main causes of alienation and poverty.
The same workers today do not have hourly pays that are much higher (yet) but they can accept or refuse any gig, combine several gigs when possible and maximize their number of hours. (Handy, the cleaning services platform is a good example). New services have been created to “platformize” rigid schedules and generalise the freedom enjoyed by gig workers. Shift Messenger, a Y Combinator alum, was launched in 2015 to give workers a communication tool specifically designed to help them manage their schedules. They can post their shifts and swap with co-workers.
6. There is now a whole new ecosystem of services for workers, as Nick Grossman and Elizabeth Woyke show in Serving Workers in the Gig Economy. These services all have a common theme, “the desire to retain the flexibility and freedom of gig work, while obtaining the protections and benefits of traditional full-time work”. So independent workers can have their cake and eat it too. The main difficulty about being a freelancer only was access to benefits and protections. The safety net — benefits such as unemployment, disability and retirement — bundled with work, is part of a package that’s invisible… and taken for granted. But there are new kinds of insurance products that address freelancers. For example, Peers offers a program of portable benefits that stay with the worker regardless of employer. Even offers a banking product that helps hourly workers manage the ups and downs of an unpredictable work schedule and income.
The Right Policy Decisions
But let’s not be naïve and let’s MAKE SURE WE PLAY OUR CARDS RIGHT:
- First let’s not kid ourselves about the ability of these gigantic platforms to become predators. If every gig worker is a small company, then identity and personal reputation are their brand and professional card. If so much is mediated by platforms, it it critical that the workers control their data. Reputation gained on one platform could be used to obtain income from another platform. So data portability would give workers more flexibility to choose where and how to work. Right now, by default, the data generated is the property of the platform rather than that of the worker. Mature platforms prefer to keep their users’ reputation value within their own system, which will only increase the winner-take-all trend towards gigantism. It’s important to make data portability an issue and favor the small newer platforms that use data portability as an argument.
- Second let’s make policymakers aware of the value that work platforms can have for workers. Lobbying and raising awareness is critical to have governments on the side of gig workers. Rather than banning the platforms, they could incentivize work platforms to adopt a model with more protections. Work platforms opt toward a model of independent contractors because of the transactional costs and friction of the employment paperwork. If these burdensome and costly processes could be made into digital, instant, API-driven processes, then there could be more protections from the start!
Laetitia Vitaud with Switch Collective
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