Net Neutrality and The Gig Economy
With more individuals earning money from gig economy companies such as Lyft and TaskRabbit Net Neutrality is about protecting more than entrepreneurship.
I’ve spent some time talking about how important Net Neutrality is as a concept and how the current FCC plan to eliminate the Net Neutrality protections put in place by the previous Chairman of the FCC, Tom Wheeler could prevent innovation and stifle entrepreneurship. But there are still people stating that we don’t need Net Neutrality provisions at all, which makes me think we need a new argument. Perhaps one that strikes a little closer to an individual’s wallet.
One of the most important economic changes in the past five years has been the rise of the gig economy, or what we used to refer to as freelancers. Nearly 34% of the US workforce is based in the gig economy. According to a report in Forbes, even large companies such as Samsung are turning to platforms such as UpWork for freelance workers rather than hiring full time staff with 20% of the Fortune 500 using the service.
The corollary effect of this shift in employment status is that Net Neutrality is more important than ever to the working individual in the United States. And it’s more than those who run errands/delivery for Postmates, DoorDash or UberEats.
Imagine you’re a freelance designer/strategist/developer. One thing that’s left out in the epic romanticization of the freelancer in the United States is the new business hustle. Now some people actually enjoy that hustle (some of us even make a career of it), but most freelancers really want to focus on doing the thing that they love doing. With more companies using freelancers it is quickly becoming one of the only means of finding employment in certain fields. So freelancers turn to a platform like UpWork or PeoplePerHour to find work so they can spend less time selling and more time working. Win — Win, right? The companies get high quality talent without having to pay for benefits and workers get the freedom of freelancing without the stress that comes with business development.
But what happens when there are no Net Neutrality regulations in place? The ability to find jobs in the new gig economy could become much, much more difficult. If an ISP has a “preferred vendor” whether that’s they’re own service or the one that pays them the most to access their customers then users on competing platforms will lose out. What if AT&T buys Uber? Or UpWork? And all of a sudden there’s a delay when trying to hail a Lyft? That’s not exactly good for competition, or the consumer.
To provide a preemptive rebuttal — yes, I know that there were no Net Neutrality regulations in place at the start of the internet. Before the 2015 Net Neutrality provisions there were numerous instances of service providers blocking or throttling a service online, often to bolster one of their own digital services. Based on the history of ISPs blocking or throttling competing services one likely path is that each provider will have their own preferred platform, most likely based on which one they own (or whichever pays them more) blocking all of the others from operating on their network.
This kind of un-competitive behavior will impact more people than just the entrepreneurs looking to build the next UpWork — it will have a much more immediate and devastating effect on those individuals who use the platforms to find work. With over a third of the US workforce present in the gig economy the erasure of such marketplaces would be devastating. It would potentially be one of the largest layoffs in history, impacting 53,663,220 Americans (that 34% of the workforce from above is a lot of people).
This is the impact that the repeal of Title II could mean for the American citizen. Not just that we’ll miss out on the next Netflix, but there’s the potential for your ISP to impact how you actually go out and earn a living. And that’s something that nobody wants.
