July 4, 2018

Even a decade on, we live in a world transformed by the Great Recession. Unemployment rates in much of the developed world have returned to pre-crisis levels or lower, which by normal market logic should push wages up. Instead, pay has stagnated while inequality has exploded – particularly in the US.

One possible culprit is the rise of the so-called ‘gig economy’. In her new book, Gigged: The Gig Economy, the End of the Job and the Future of Work, tech journalist Sarah Kessler uncovers how despite early claims that the flexibility of short-term “gigs” would make workers happier, they bring ‘liberation’ from a traditional safety net, reliable work hours, and even, in many cases, anything close to a livable wage.

Kessler’s book makes it more clear than ever that some solution to the fragmenting of traditional employment is direly needed
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While ‘freelancers’ have existed since the invention of money, the ‘gig economy’ kicked off with Uber. The taxi company used AI scheduling and mobile apps to connect passengers to independent drivers. It was distinct from existing freelance marketplaces in its focus on a lower-skill task, and its control over things such as pricing and marketing that, in higher-skill markets, were mostly handled by freelancers themselves.

After Uber truly took off in around 2013, droves of startups mimicked the model – Instacart was the Uber of grocery shopping, Taskrabbit was the Uber of housework.

Kessler has been reporting on the gig economy nearly from the beginning, starting as a blogger for Mashable in 2011, and more recently as an editor at Quartz. When we met recently to discuss the book, she said she was initially encouraged to write it as an immersive first-person narrative – an update of Barbarah Ehrenreich’s Nickel and Dimed in which she would try to live for a year on wages earned through the gig economy.

But she realised that her own background as a well-educated white Midwesterner would make that viewpoint far too narrow. So we get just a few glimpses of Kessler trying her hand at things like the banally authoritarian ‘personality test’ administered to would-be contract housecleaners (“If a $100 bill is laid out on a table without a note, do you take it?”).

Further reading
Amazon: the new Victorian workhouse

By James Bloodworth

Instead, Kessler focuses on the workers living out the reality of the gig economy’s promise. She spent years following them, and captures them as fascinating, complex figures: an Uber driver who would later agitate for a strike against the company; a Canadian woman who masters the micro-drudgery of Amazon’s Mechanical Turk; a computer programmer who tires of the corporate world and goes freelance; and an activist hoping to bring gig opportunities to the rural poor.

Alongside her intimate portraits of these workers’ lives, Kessler picks apart the founding mythology of the gig economy. Companies like Uber consistently emphasise workers’ supposed love of ‘flexibility’, especially to deflect hard questions about pay and fairness. That sort of glad-handing has roots going back at least to the Kelly Girls of the 1950s – temporary office workers who were described by their services as “bored with strictly keeping house.” The was that they didn’t need to be paid or treated well because they were just pampered homebodies, working purely for fun.

While workers today of course value ‘flexibility’ – who doesn’t? – surveys show that all things being equal, they’d rather have a reliable full-time job
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That wasn’t true back then – Kessler finds a contemporary study showing that 75% of temp workers in the early 1960s were primarily motivated by a need to earn money. And it’s not true now. While workers today of course value “flexibility” – who doesn’t? – surveys show that all things being equal, they’d rather have a reliable full-time job.

An even broader version of the ‘flexibility’ mantra came from Uber founder, Travis Kalanick. Kalanick (before getting unceremoniously booted from his own company in 2017) was fond of saying that his platform offered “turnkey entrepreneurship”.

“Uber totally sold its job on this idea that it was a path to the American Dream,” Kessler told me. “That it was going to really significantly improve your life status and you’d be running your own business.” That rhetoric, along with tactics like $200 bonuses for drivers who recruited friends to join the platform, helped Uber successfully sign up tens of thousands of drivers around the world.

Further reading
The gig economy: a platform for exploitation

By James Bloodworth

One of those drivers was Mamdooh Husein, better known as “Abe,” whose tale is easily the most compelling, weird, and enlightening Kessler tells. We meet Abe as a 28-year-old waiter, whose spartan life in Kansas City makes him long for more. That longing makes him an easy mark for scams including a pyramid scheme called GIN, which promises him wealth and freedom (in exchange for a few small upfront payments). He is badly stung, in an experience that initially makes him sceptical of Uber’s very similar promises – though deep in debt, he eventually signs on.

For Abe and many other gig workers, the promise of ‘entrepreneurship’ is a deceptive one. Like many other drivers, Abe is initially enthusiastic about Uber, but winds up frustrated by falling pay and unexpected expenses. While the company promised that drivers like him could earn up to $90,000 a year, those calculations didn’t include little things like gasoline, car insurance, and maintenance – all of which drivers footed the bill for. For some Uber drivers, expenses can cut income by as much as half.

Describing their workers as ‘entrepreneurs,’ while downplaying the fact that businesses have expenses, seems to have been a conscious strategy by Uber and other gig platforms. The sense that it’s all a long con is even more acute in a handful of cases where startups encouraged workers to buy supplies from the companies themselves. In one case Kessler describes, a cleaning company offered $150 kits full of supplies to contract workers – which it seems unlikely were sold at a loss. Uber for a time offered subprime leasing deals through a subsidiary, and used the app to pitch them to drivers (though in typical fashion, Uber somehow managed to lose money on this company-store scheme).

On-demand technology itself was often used to create employee-like relationships with a veneer of plausible deniability
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Just as damning is Kessler’s finding that on-demand technology itself, loudly promoted for making work more flexible and services more nimble, was often used to create employee-like relationships with a veneer of plausible deniability. Instead of human managers giving direct instructions, which would make them more likely to be classified as employees, gig workers are trained by online videos, scheduled by algorithms, and evaluated by ‘star’ ratings issued by customers themselves.

Those star-rating systems have become standard issue not just for gig apps, but for everything from product reviews on Amazon to restaurant directories like Yelp. But the fact that they’re applied to individuals, rather than companies or products, is emblematic of the larger issue here – it helps companies offload risks that come with having employees.

On gig platforms, workers who get bad ratings can simply be removed from the platform
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If a worker employed by a company gives sub-par service, they might be fired, but they’re equally likely to get more training or a chance to improve. On gig platforms, workers who get bad ratings can simply be removed from the platform – often, as Kessler describes, with no explanation, warning, or recourse.

The rise of the gig economy, of course, happened in a broader context that made workers ripe for such exploitation. When Uber arrived, unemployment in the US was still over 7%. At the same time, the recession set off sustained cuts to American education at all levels – cuts which hit the most marginalised communities hardest.

That educational gap is clear in the story of Terrence Davenport. Kessler highlights Davenport’s years-long effort, with help from a well-meaning nonprofit, to connect his poor, rural Arkansas hometown, through the internet, to the gig economy. For most remote work – research, data entry, and customer service – Davenport’s students wind up competing with workers abroad who can afford to charge much less for the same work.

Further reading
All hail the capitalism revolution on the streets of Paris

By Ian Birrell

At the same time, few of the programme participants have even the basic education for online jobs, such as social media management, that require strong language skills. After several years of heartbreaking struggle in which very few participants found even temporary work, the programme was shut down.

Abe eventually came to regard Uber as yet another scam, and started a campaign to pressure the company to improve its treatment of drivers. At the time, some news outlets reported the action as an inspiring blow struck for the little guy, but Kessler’s thorough reporting reveals it as something more complicated. The small strikes Abe organises have essentially no effect, so he – as Kessler finds out through an email he shows her – offers Uber a deal: for a payment of $10,000, he’ll stop organising.

Uber doesn’t bite, but Kessler is rightly troubled by this willingness to trade collective power for personal gain. In her effort to understand it, she concludes Abe “had felt powerless for most of his life” and violently resented that feeling. But he had few models for change aside from self-help scammers – and a bit later, President Donald Trump.

By the end of Gigged, Kessler tells us that Abe has managed to put together the down payment on a rental property. An American optimist to the core, he thinks this will inevitably lead to a future career as a real estate tycoon, making him enthusiastic about Trump’s (since-fulfilled) plans to cut taxes and regulations on the corporations and the wealthy. “When you’re rich,” Abe told Kessler, “You can do things nobody else can do. You’re truly free.”

It seems the gig economy is deeply implicated not just in inequality, but in a disturbing subtext of supposedly ‘populist’ Trumpist ideology
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Abe’s story suggests the gig economy is deeply implicated not just in inequality, but in a disturbing subtext of supposedly ‘populist’ Trumpist ideology. The broad shift away from employment and towards relationships in which workers are treated as second-class citizens drives home the idea that being rich is the only security. It also teaches the lesson that being entirely self-centered – exploiting the weak, blackmailing the strong, and devil take your fellow man – is a great way to get there.

The nature of the platforms reinforces this antisocial spirit, to the benefit of the gig companies. Workers don’t interact in a workplace, and can’t communicate with or even identify one another through the platforms, making organising for change much more difficult. Even skilled workers aren’t immune – Kessler reports on emerging AI systems that can coordinate teams of freelancers to complete complex projects, such as long business documents, without direct human supervision. That could expand companies’ protection from employment lawsuits, applying the same kinds of pressure to high-skilled workers that are already faced by drivers, cleaners, and couriers.

Platforms similar to Uber, but built without profit in mind, could form the basis for a new kind of worker cooperative
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How do we reverse those trends? Technology can be turned to better ends. Platforms similar to Uber, but built without profit in mind, could form the basis for a new kind of worker cooperative, preserving gig flexibility while ensuring fairer pay (and likely leveraging that as a selling point).

Another bright spot Kessler finds is that there is actually a profit motive for some companies to provide good jobs that don’t require college degrees. That’s particularly true of those, like Starbucks and Costco, that emphasise high-quality service, and want to avoid high turnover and training costs. For consumers interested in voting with their dollars, she suggests using licensed taxis, or hiring a housecleaner directly instead of through an app.

But the logic of the market alone won’t restore worker dignity, or mass faith in responsible leadership. European and UK  legislators have increasingly shown a willingness to reinforce traditional labour relationships, but there’s much less stomach for it in in America.

Some states have pushed for more worker-friendly rules, but others, including Texas, have actually prevented cities from regulating gig platforms
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Some states have pushed for more worker-friendly rules, but others, including Texas, have actually prevented cities from regulating gig platforms. Rather than making Uber more like a regular job, though, Kessler argues that laws need to adjust to the new reality of flexible labour – for the US, she suggests that portable benefits and more fine-grained employment categories might help, though she acknowledges those have their own issues. She also touches on more radical proposals like Universal Basic Income, a streamlined welfare system beloved of Silicon Valley itself.

Kessler’s book makes it more clear than ever that some solution to the fragmenting of traditional employment is direly needed.  That the shortcomings of flexible labour have become so clear, at a moment when the US is so politically ill-prepared to act, may yet prove a tragedy of historic proportions.