Poor worker conditions power gig economy | FT Alphaville
Summary
TLDRThis video script explores the dark side of the gig economy, where smartphone apps promise efficiency but may rely on poor worker conditions. The narrator's personal experience as a delivery rider reveals mandatory shifts, low pay, and a lack of job security, contrasting companies' claims of flexible, empowering jobs. The script questions the sustainability of such business models and the impact on workers, suggesting a return to a feudal-like society with app companies as modern-day lords.
Takeaways
- 📱 Smartphone apps are transforming the way we summon services like taxis, plumbers, and even masseuses to our exact location with a push of a button.
- 🤔 The efficiency of these apps is questioned, as it may be at the cost of poor worker conditions, rather than true innovation.
- 📚 The 1992 sci-fi book 'Snow Crash' by Neal Stephenson envisioned a brutal labor market within a sophisticated digital economy, foreshadowing today's gig economy.
- 🚗 The gig economy is criticized for exploiting workers by classifying them as contractors, thus avoiding traditional employment protections and benefits.
- 💰 The cost of services provided by apps is often subsidized by investors and workers, who may have to work harder for less money.
- 📉 There have been protests by gig economy workers like Uber drivers, who claim they cannot earn a living wage after accounting for all costs.
- 🏍️ Workers bear the costs of their equipment and maintenance, while companies like Uber and TaskRabbit claim they offer flexible and empowering jobs.
- 📝 The author's personal experience as a delivery rider revealed rigid schedules and low earnings, contradicting the advertised flexibility and income potential.
- 📋 The contract for gig workers contains clauses that are intimidating and aim to prevent workers from asserting their rights, although legally unenforceable.
- 💼 Companies in the gig economy are accused of underpricing their services to drive out competition and later raise prices once a monopoly is established.
- 🌐 The rise of the gig economy is compared to feudalism, where workers are in a coercive and exploitative relationship with app companies that profit at their expense.
Q & A
How are smartphone apps changing the traditional work landscape?
-Smartphone apps are enabling on-demand services by allowing users to summon services like taxis, plumbing, or massages to their exact location with a push of a button, thereby changing the way we work and interact with service providers.
What is the concern raised about the efficiency of apps in the gig economy?
-The concern is that these apps may not be making the world more efficient as we think, but rather exploiting poor worker conditions to power the gig economy.
What is the 'Deliverator' in the context of the 1992 sci-fi book 'Snow Crash'?
-In 'Snow Crash', the 'Deliverator' is a character who represents a brutally Darwinistic labor market within a sophisticated digital economy, delivering pizzas under the control of a mafia monopoly called Casa Nostra, emphasizing speed and risk.
What is the core issue with the cost of service provided by these apps?
-The core issue is whether the low cost of services offered by these apps is due to true innovation or simply a loss-leading model subsidized by investors and workers, who often have to work harder for less money without traditional employment securities.
What has been the response from workers in the gig economy regarding their working conditions?
-There have been several protests by workers from companies like Uber and delivery services, arguing that they cannot make a living wage once all costs are accounted for, and they bear all the risks while the platforms profit.
What was the experience of the journalist who tried working as a bike rider for a delivery company?
-The journalist found the job to be hard, with little flexibility, high costs for equipment and maintenance, and low earnings that did not meet the living wage. They also experienced technical issues with the app and felt pressured by the mandatory nature of the shifts.
What contradictions did the journalist find in the contract with the delivery company?
-The contract stated there was no minimum commitment for drivers, contradicting the mandatory shifts they had to work as stated by the company. It also contained clauses attempting to prevent workers from asserting their rights as employees or workers, which are legally unenforceable.
How do companies like Uber and TaskRabbit respond to accusations of poor working conditions?
-They argue that they are creating flexible and empowering jobs, and that contractors are free to leave if the work does not suit them or if they are not earning enough.
What is the perspective of some critics on the gig economy's impact on job quality?
-Critics argue that while the gig economy is creating jobs, the quality of these jobs matters, and the so-called empowerment often comes with a lack of control over earnings, pricing, and working conditions.
What is the argument made by some economists about the pricing strategy of gig economy companies?
-Some economists, like Guy Standing, argue that companies are underpricing their services to drive out competition, with the intention of later raising prices once a monopolistic situation is achieved, which is a form of predatory pricing.
What solution is proposed by some to address the issues within the gig economy?
-One proposed solution is the implementation of a universal basic income to provide a safety net for the growing precariat class, which lacks the security traditionally enjoyed by workers.
What is the potential impact of recognizing workers' rights in the gig economy?
-Recognizing workers' rights could lead to increased costs for companies, which may then have to be passed on to customers, potentially changing the competitive landscape and pricing structure of the gig economy.
Outlines
📱 Gig Economy and Worker Conditions
The script discusses the impact of smartphone apps on the gig economy, focusing on the working conditions of those who provide services through these platforms. It questions whether the efficiency of these apps is overshadowed by poor labor conditions. The author references 'Snow Crash' by Neal Stephenson to draw parallels between the dystopian labor market in fiction and the current gig economy. The narrative includes the author's personal experience with a delivery service, highlighting the discrepancy between the promised flexibility and the actual mandatory shifts. The summary also touches on the protests by gig workers demanding fair wages and job security.
🛵 The Reality of Gig Work: An Insider's Perspective
This paragraph delves into the author's firsthand experience as a delivery rider, emphasizing the challenges faced in meeting the demands of the job, such as time constraints, app issues, and the difficulty of maintaining a profitable wage. The author's earnings are compared to the living wage in London, highlighting the struggle to make ends meet. The contract's terms are scrutinized, pointing out contradictions and intimidation clauses designed to deter workers from asserting their rights. The company's response is included, claiming that they offer flexible and well-compensated opportunities, a claim that is contested by the author's experiences and those of other workers.
🏰 The Gig Economy's Feudalistic Parallels
The script compares the gig economy to feudalism, with companies acting as modern-day lords, extracting surplus value from workers who bear the risks and costs. It discusses the power dynamics, where companies control prices and conditions, and workers compete for limited opportunities. The comparison extends to the legal loopholes that classify workers as contractors, thus avoiding responsibilities towards them. The paragraph also considers the broader implications of this model, including the potential for a universal basic income as a solution to the precarity faced by gig workers.
🏛 The Future of Gig Work: Challenges and Possibilities
The final paragraph contemplates the future of gig work, acknowledging the challenges faced by workers and the societal implications of the gig economy's business model. It suggests that while these platforms are popular with consumers, they may be built on unsustainable practices that disadvantage workers. The discussion includes the potential for collective bargaining and unionization as means for workers to improve their conditions. The script ends with a reflection on the societal shift towards an 'Upstairs, Downstairs' dynamic, where workers are increasingly disadvantaged in the digital economy.
Mindmap
Keywords
💡Smartphone Apps
💡Gig Economy
💡Contractor
💡Snow Crash
💡Living Wage
💡Precariat Class
💡Minimum Commitment
💡Legal Loophole
💡Universal Basic Income
💡Collective Bargaining
💡Upstairs, Downstairs Society
Highlights
Smartphone apps are transforming the way we summon services, but the gig economy may rely on poor worker conditions.
Author Neil Stevenson's 'Snow Crash' envisioned a brutal labor market within a sophisticated digital economy.
The gig economy's low wages and lack of job security contrast with the convenience and cheapness of apps.
Workers are protesting against the discrepancy between the reality of gig work and recruitment promises.
The narrator's personal experience as a gig worker revealed mandatory shifts and a lack of flexibility.
Delivery apps like Uber and TaskRabbit claim to offer flexible, empowering jobs.
Workers face high costs for equipment and maintenance without the benefits of traditional employment.
The narrator's earnings averaged less than the London living wage after costs.
Contract terms for gig workers are confusing and contradictory, with intimidation clauses.
Delivery companies claim high average earnings for riders, but workers report inconsistent pay.
Gig economy critics argue that companies underprice services to drive out competition and later monopolize markets.
Economist Guy Standing suggests a universal basic income to address the precarity of gig work.
The gig economy may be cultivating a new social class without the security of previous generations.
Workers in the gig economy face challenges in organizing and bargaining collectively.
A landmark legal decision suggests potential recognition of rights for gig economy workers.
The gig economy's success with customers masks the pressure on workers' living standards.
Critics argue that the business models of gig economy apps are dubious and exploit workers.
The transcript suggests a return to an 'Upstairs, Downstairs' society with app-based services.
Transcripts
smartphone apps are changing the way we
work with the push of a button we can
summon services to our exact location
whether that's taxis plumbers take ways
or even masseurs we think these apps are
making the world more efficient but what
if they're not what if what's really
powering this gig economy is something
much less sophisticated like poor worker
conditions to find out I decided to try
it out myself I'll tell you about my
interview process and the contract
designed to scare you off asserting your
rights in the 1992 sci-fi book Snow
Crash author Neil Stevenson has a go at
envisioning a brutally Darwinistic labor
market which sits within a sophisticated
digital economy where everyone must fend
for themselves without any job security
or protection he conjures up the job of
the deliberate err someone who at his
own prerogative Scouts to make a living
out of pizza delivery within that
economic dystopia everything by the
physical delivery is automated the
sector is controlled by a mafia monopoly
called Casa Nostra guiding the cartels
operations is one single principle the
deliverator stands tall your pie in 30
minutes or you can have it free shoot
the driver take his car or file a
class-action suit but whereas snow crash
was only a story
today's gig economy is not what's
frightening about that is that the
brutality of this system is being lost
on those who actually use these apps
[Music]
the heart of the problem relates to the
cost of service we love the apps because
they're convenient and cheap technology
has something to do with that but in
reality the jury's still out on whether
this is true innovation or just a loss
leading model currently being subsidized
by investors and workers many of the
latter having to work harder for less
money and without the securities
provided by traditional employment
contracts just because they're called
contractors instead of employees or
workers this year has seen several
protests by uber and delivery workers
they say it isn't possible to make a
London living wage
once all costs are accounted for they're
the ones taking all the risk while the
platforms are making a steady profit at
their expense we have to pay for a
motorcycle mine costs two and a half
grand Jeremy like the people send big
money on a bike then you've got
insurance which cost me a hundred and
forty pounds every month you've got a
keep your bike maintained but get it
serviced companies like uber delivery
and TaskRabbit counter the accusation
saying they're creating flexible
empowering jobs they add contractors are
free to walk away if the work doesn't
suit them or if they're not earning
enough price not paying for tomorrow
there was genuine anger among protesters
over the disconnect between the reality
of the job versus the expectations put
forward in the recruitment process but
equally in the case of food dispatching
firm delivery
they were objecting to the company's
unilateral decision in the summer to
switch workers from hourly to per drop
contracts without any warning at all
delivery is somewhat unique in offering
these two types of agreements to
understand some of the concerns of the
drivers I decided to apply for a job as
a bike rider at delivery
hello speller speaking I did so using my
real identity after completing a quick
online form I was through to the
telephone interview that's right I'm
good thank you I was under the
impression it's supposed to be quite
flexible right I'm working full-time
but I'm looking for a supplementary
income it's a media job so it just
involves writing stuff on the internet
just about the nature of the commitments
so it's a minimum of two evenings of two
to three hours on the weekend provided
Sunday and other than that it's up to me
when I can do the time and when I when I
don't have to at no point was I asked
what contract type I wanted the terms
given were the hourly type 7 pounds per
hour plus a one-pound bonus per delivery
but it was stressed I could earn up to
12 pounds per hour or more in surge
periods so I've got my kids I didn't get
it immediately I had to go back a second
time to get it all because they didn't
have the staff on hand to do it the
first time around I was told initially
that my shifts would be really flexible
but it turns out that's not the case
instead I'm doing four shifts a week
6:30 to 9:30 Tuesday Thursday Saturday
and Sunday these are had to pre commit
to and I can't change them now that I've
established them and the ones on the
weekend are utterly mandatory so I have
to do them no matter what otherwise I
don't get paid my zone is London Bridge
and that was my second choice and at the
weekend I'm doing Fulham which was the
only other option for me that was
available in the end I delivered five
orders over two separate shifts on the
job I soon realized it's very hard to
stick to deliveries manual it demands
you take your helmet off when going in
and out of a restaurant or to a
customer's home but that plus finding a
secure place to park your bike eats up
time and is impractical delivery also
wants you to double-check the contents
of each order before setting off but
rifling through a bag of hamburgers to
check what's a cheeseburger and what's
not is inconvenient and
the customers I delivered to were almost
exclusively urban professionals living
in gated communities as a whole the app
was efficient when working but
exceptionally battery draining on the
second go the app crashed halfway
through the shift and was out of order
for more than an hour leading me to miss
out on potential bonus earnings my
orders were back-to-back and there was
hardly an opportunity to even take a
toilet break which made me feel a little
like a rat on a treadmill if there are
errors you bear the risk my overall
earnings averaged out to be about 8
pounds 10 per hour I also got three
pounds in tips
London authorities say the capital's
living wage is nine pounds 75 whilst
employers aren't forced to abide by that
they are obliged to pay minimum living
wage of 7 pounds 20 this turns to 7
pounds 50 from next April onwards but
the most troubling aspect of my whole
experience was when I read the contract
it said there was no minimum commitment
which drivers had to work but wait a
minute so it's a minimum of two evenings
of 2 to 3 hours on the weekend Friday to
Sunday over the phone and in person
delivery had repeatedly told me I had to
work mandatory shifts so there was a
contradiction between what I was hearing
about flexibility and what was written
on paper even within the contract there
seems to be a contradiction so firstly
it says that you weren't obliged to do
any minimum level of work but then just
down the page it says that you are
expected to be as flexible as possible
to meet deliveries needs what really
stands out for me about this contract is
or there are two things the first is the
clause which says that delivery riders
can't bring a claim to an employment
tribunal or any other Court where they
say that they are an employee or a
worker in other words this says they
can't assert their rights as workers or
employees and then the second Clause
just underneath that says that if they
do go to court and they do claim that
they are employees or workers then they
will pay deliveries costs in relation to
that legal action these clauses are
legally worthless no tribunal will
enforce them so if they've had that
advice and they have still chosen to
include them the only reason they can
have chosen to do so is to scare their
workforce from asserting their rights so
it's a form of intimidation basically
yeah you could say that delivery
declined to be interviewed but they did
give us a statement including the
following points riders are at the heart
of delivery and we are proud to offer
them the flexible work they valued they
choose when and where to work and for
how long allowing them to fit their work
with us around other commitments such as
studying or starting a small business
indeed over 10,000 people apply to ride
with us each week which shows that
working with delivery is popular and
valued by riders right across the
country riders with delivery on average
earn substantially more than the
national living wage the Financial Times
journalist herself was paid
significantly above the living wage in
spite of her completing fewer deliveries
than the average of other riders working
in the same area at the same time but
the delivery workers I've spoken to
insists there's never a guarantee there
will be enough orders to achieve the
minimum wage
especially after costs are accounted for
there are also parts of the country
where delivery advertises rates of 6
pounds per hour plus one pound per drop
at this year's web summit in Lisbon
those representing the gig economy
didn't seem fazed by growing criticism
Bradley tusk lobbies Washington on
behalf of uber and its CEO Travis
kalanick he said low wages weren't the
fault of the uber model sure there are
the black car drivers in London and taxi
drivers who feel disillusioned physical
uber although they can always become
uber drivers by the way but at least in
the u.s. what frequently happens is the
taxi cartel tries to shut up or down
today once innovation and because Luber
alternately is so much a more democratic
system others however see it differently
are they creating jobs and yeah sure
they are creating some jobs but it's the
quality of the jobs that also really
matters and that's where this notion of
empowerment comes in so one of the
things that we're told is that these
workers can work when they want to you
know they're self-employed and have lots
of flexibility but often we see in
practice is that say for instance with
uber those those self-employed drivers
don't set the price
uber sets the price
in the gig economy many companies are
using a legal loophole regarding
contractor status to turn workers into
competing privateers who they control
and dictate earnings - it echoes the old
system of feudalism the workers battle
it out to grab whatever works available
in a zero-sum game but the app companies
behave more like medieval robber barons
they are the house that always wins
there's a high similarity with the
broader feudal structure insofar as that
is a coercive inegalitarian
extractive relationship where lords are
drawing surpluses off peasants and other
workers to line their own pockets and
increase their own status and financial
power lords have the power to vary their
terms and conditions as they please they
can switch from taking money rent to
cultivating the land themselves directly
and saying you have to come and work on
the land for so many so many days a week
economists guys standing reckons
companies are deliberately underpricing
their service because they rely on
venture capital they don't have to go
public and therefore they can run an
operating loss why are they running
under operating loss because they're
deliberately underpricing
their service in order to drive out
competition who can't compete at that
price once they've done that they can
raise the prices and then have a
monopolistic situation today often
within the app economy it's the worker
who has the means of production and has
responsibility for the costs of
maintenance and the insurance when the
app is pure renting a pure rent here and
this is a form of feudalism but it's a
very specific form
landing argues instead the unrestricted
digitalization is cultivating the rise
of a precariat class a new social group
which exists without the predictability
or security enjoyed by the previous
generation of workers and since this
digitalization can't be reversed
he thinks the solution is a universal
basic income but the political will
alone to drive it through would have to
be extraordinary and this would take
time they tried it in Switzerland but
the referendum failed in October British
prime minister Theresa May announced the
government would conduct a review into
the rights at stake in the gig economy
Labour leader Jeremy Corbyn has even put
digital platform worker rights into his
party's manifesto in medieval times if
and when freelancers did pop up in large
numbers
they were often met by community
disapproval this forced them to regulate
but for today's gig economy workers
organisations difficult so we're not
interested in talking on end of the
individual races we're here to talk
collective bargaining that means people
representing a wider group of people
they refuse to recognize that the people
here are working as collect as a
collective as a collective bargaining
unit and they refuse even what to say
the word unique but some say forging a
union is definitely within the realms of
possibility
Powell's firm recently won a landmark
decision at a London Employment Tribunal
on behalf of uber drivers she's
optimistic that the law can work on the
side of this new precariat class
[Music]
the law itself is quite effective it has
this category of worker which recognizes
that some people might not be an
employee but they're certainly not in
business on their own account but if
these rights are recognized this could
impact competition as respective costs
will have to be passed on to customers
in other ways what we're learning slowly
but surely is that the gig economy works
by putting living standards under
pressure despite its success with
customers critics say these apps are
built on dubious business models and
that someone is always losing out at the
moment it seems to be the workers until
anything changes there's no escaping
that what these apps are really doing is
popularizing the return of an Upstairs
Downstairs society workers instead of
saying you rang milord just end up
saying you hailed milord
[Music]
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