While many parts of the economy are in crisis, the digital platform sector is booming—and may well be the only viable employers for many. But their business models give workers less freedom, not moreby Mathew Lawrence / August 17, 2020 / Leave a comment
With the recent grim economic figures, the UK has now achieved two shocking Covid-19 records: the worst recession of any G7 country and the highest excess death rate in Europe. The pain is set to intensify, with many forecasting a weak recovery and long-term scarring effects from the deepest economic contraction since records began. But one part of the economy has surged during the crisis: the digital platforms that increasingly organise our lives, from Amazon and Alphabet to Deliveroo and Uber. The implications of this change is profound for distributions of wealth, power, and dignity in work and wider society. Unless we build a new politics of work and technology, the twin and convulsions unleashed by the pandemic and rise of the platform economy is set to worsen insecurity and inequality.
Platform work fuses advances in digital technology with a longer-term shift towards the casualisation of work, with workers using online platforms such as Uber or Deliveroo to access task-based contracts for on-demand services. The rise of platform work accelerates long-standing shifts towards outsourcing and the weakening of labour protections, with platform workers denied the hard-won rights and protections of the traditional employment contract. And though the technologies of surveillance they deploy are new, the platforms are replicating a far older trend in the history of capitalism: technologies being used to deepen the measurement and evaluation of workers in order to increase the ability for control and exploitation.
With unemployment set to rise to its highest levels in decades by Christmas, platform work is expected to surge; they may be only the forms of work on offer for many. A canary down the mine for the future of work was the recent announcement by Hermes, the delivery firm, that they are planning to create more than 10,000 jobs as demand for home delivery continues to grow. Yet 9,000 of these jobs are set to be couriers, many of whom would be classified as self-employed, lacking basic legal protections such as the minimum wage, full sick pay or holiday benefits, and with their work organised through the platform. With the news that Hermes is set to be bought by the US private equity firm Advent International for almost £1 billion, it paints a dark picture of work in the age of the platform: deep insecurity for many workers, great rewards for a narrow set of investors.
Take Uber’s most recent financial report on its second quarter performance, released on 6th August. It lost $1.78 billion in the second quarter of 2020, slightly down from a year ago, in which it had a net loss of $5.24 billion. These statistics confirm another striking element of the platform economy. Despite their portrayal as hugely profitable firms operating on the technological frontier, many platform companies post significant losses. Indeed, many have never turned a profit, and are only sustained by burning through vast sums of venture capital, who invest in loss-making platforms in the hope that one day the platforms will dominate the market, and reach outsized profitability. And the business model of many platform companies is often the same: testing the limits of labour law wherever they operate, built on the back of increasingly precarious work, with a highly financialised business model. This is a guarantee of a future of work that is insecure and unequal.
How can we reimagine work in the age of the platform? One route is through the courts. Last week, for example, a California judge ruled that Uber drivers are employees not contractors and should be given benefits, such as health insurance, currently denied to them. Uber have responded by threatening to leave the state. In the UK, the Supreme Court is set to rule on a landmark case brought against Uber regarding the employment status of Uber drivers; its implications are potentially profound for the future of employment law and the security of workers.
But we shouldn’t rely on the courts for a solution. Instead, we need to reimagine the institutional arrangements that underpin the platform economy, reshaping labour law, ownership, and digital infrastructures through organised politics. That should start with a new deal for all workers—powerful rights on day one, new forms of collective voice, and greater control over the management of their time—to reset the terms of working life and rebalance power in the economy. For example, in Norway the food delivery platform, Foodora has a collective agreement with its riders—and new approaches to the collective and equitable management are emerging, such as the growth of data trusts and data commoning.
And in place of the deep asymmetries of power generated by the ubiquitous surveillance of the platforms—central to what Shoshana Zuboff calls “surveillance capitalism”—we need a new politics of technology: one where data is collected and stewarded in common based on consent, where the purpose of technologies is democratically discussed and their limits collectively agreed upon, where workers can use data to build shared power and solidarity—and where the tools we build are in service of a common good.
Now is the time for action. Despite the growth in size of many platforms, others are historically fragile due to the effects of the pandemic; even as Uber Eats revenues grow, for instance, Uber’s mobility revenue has taken a sharp hit, though both branches of the business continue to make a loss. This, paired with the unprofitability of many platforms under their current model, presents a unique opportunity to challenge their power.
Work and our workplaces are where new technologies are trialled and inequalities are laid bare—but also where power is built and exercised, where progress can be made and where vested interests can be challenged. A path to a better technological future and world of work must begin with reimagining how work is organised. That must start by transforming how work is organised through the platform economy.