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Two Models for a Fairer Sharing Economy

Amir Anwar and I have a new chapter out in The Cambridge Handbook of the Law of the Sharing Economy. The full piece is available to download at the link below:

Graham, M. and Anwar, M. A. 2018. Two Models for a Fairer Sharing Economy. In Davidson, N. M., Finck, M., Infranca, J. J. (eds). The Law of the Sharing Economy. Cambridge: Cambridge University Press. 316-327.


Abstract

Millions of workers around the world join the so-called “sharing economy” every day to perform a variety of jobs. Most of these jobs are digitally mediated through internet-based platforms which connect buyers and sellers of goods and services. However, recent research has begun to highlight the many risks associated with jobs in the sharing economy (Scholz, 2016; Slee, 2016). Many such jobs are characterised by temporary contracts, long and irregular hours, low income, and are often unregulated. The work is highly commoditised, and a global market for this work means that many workers feel they are replaceable, with little bargaining power (Graham et al., 2017a). Workers are made to compete against each other which drives down wages. Thus, many workers will earn below the national minimum wage of their country of location. Since many of these jobs are small “tasks”, clients may have no formal or legal requirement to provide employment benefits to workers. In other words, many sharing economy work practices carry with them various forms of insecurities, and workers typically have less bargaining power than in standard labour markets. These risks are even more pronounced among workers in low and middle-income countries, where our research is situated. 

In this chapter, we discuss ways in which the sharing economy can contribute towards economic development by making its work practices fairer not just for workers in low and middle-income countries contexts, but also for those in other parts of the world. We first argue that there is a need to reframe work practices in the sharing economy. In some cases, this will mean ensuring that platforms are seen as employers (and workers are seen as employees rather than being seen as being self-employed) in cases where they exert a large amount of control over working lives. Secondly, a better understanding of the important nodes in sharing economy value chains (that is, points of influence and control) can help formulate strategies involving disruption and intervention by labour so that more value is captured for and by workers. This chapter introduces and reviews two models of cooperative working that could work in conjunction with each other to make the sharing economy fairer for workers around the world.

Why the digital gig economy needs co-ops and unions

We live in a world in which it is increasingly possible to use online labour markets to outsource work directly to any corner of the planet. Millions of new jobs are thus available for workers in some of the poorest parts of the planet. But the fact that we now have millions of people around the world all competing for the same jobs threatens to undermine a range of working standards.

This situation in which we find ourselves is largely possible because of the rapid spread of the internet to relatively low-income populations. Ten years ago, less than 20% of the world’s population was connected to the internet; and next year we’ll probably have more connected people in the world than disconnected ones. Many of these new internet users live in parts of the world in which well-paying jobs (or indeed any kinds of paying jobs) are hard to come by.

So it makes sense that so many people turn to online work marketplaces do to tasks like virtual assistance, translations, transcriptions, computer programming, graphic design, writing, and other such intellectual and digital forms of work. This system is often organised as a cut-throat bidding process: clients lists jobs on those marketplaces, and workers then try to outbid each other for contacts by offering a lower price or better service.

What it notable about this labour system is that it potentially cuts out a lot of intermediaries, or ‘middle-men’, in chains of work. Think, for instance, of a small business in Manchester that needs a document translated. This could have once been done by outsourcing that task to a local firm, who would outsource to a large business process outsourcing firm, who, in turn, would outsource it to a smaller firm based in Manila, who would then employ a translator to do the work. Now this task can simply be done by connecting the buyer in Manchester with the worker in Manila through an online marketplace.

In theory, this can yield benefits for both the buyer and seller of work, as far less profit needs to now be captured by a chain of intermediaries. But, in many instances, what actually happens is that new intermediaries arise in these digital marketplaces: taking relatively high rates from clients and paying relatively low wages to workers.

This seems to happen for two main reasons. The first is that in traditional workplaces, workers are grouped together under one roof, making it straightforward for the employer to observe the work. However, when work is organised instead through digital platforms, the employer and worker enter into a non-proximate relationship, making monitoring and control difficult.

Ranking and reputation scores, therefore, play a massive role in ensuring quality. If you have a good feedback score as a worker, you’ll get a lot of work. Conversely, if you have not yet managed to amass positive feedback, it becomes extremely challenging to find work. There are a lot of workers on platforms like Upwork.com and Freelancer.com who spend years trying to get their first job. Such workers will accept extremely low paying jobs and sometimes undertake speculative and free labour for the promise of a high rating. What then happens at the same time is that some of the people who do have good scores bid for jobs and then re-assign them to workers with lower scores (usually for a much lower wage).

Second, and perhaps more importantly, online work platforms – by design – treat labour as a commodity to be bought and sold. Work is often packaged up into bite-sized tasks, and workers are treated as replaceable. If labour is a commodity to be easily bought and sold, then the very existence of millions of people in online marketplaces who are desperate for work and are willing to work for low wages will create intermediaries. It is irrational to do tasks yourself as a worker who has a decent score when you could outsource them for a fraction of the cost you would receive to deliver them.

This means that practices like paying minimum wages and living wages become less meaningful – when tasks can be commoditized and outsourced. The very existence of a broad base of people willing to work for subsistence-level wages can exert a gravitational downwards pull on any work towards them in a supply chain.

As millions more potential digital workers join the global network every year, how then should we avoid a situation in which an oversupply of labour can result in an unfairly low market price for work?

We’ll probably need to begin by reframing the very work that goes on in these platforms. If work is a commodity to be bought and sold, and workers are all individual entrepreneurs, it is rational to use these platforms to exploit co-workers. Many workers have internalized these sorts of internalised visions of individuality, competition and predatory behavior. But if people see themselves as workers rather than entrepreneurs, then we have more possibilities for workers to collaborate, cooperate, and organise in an attempt to secure better working conditions for all involved in this disparate digital workforce.

There is a range of ways in which this could be done. One place we could learn from is agricultural production networks. For instance, as the poverty of workers began to impact yields and the supply and availability of coffee, the creation of cooperatives and other benevolent intermediaries was actually encouraged by multinational buyers.

We could therefore envision more digital platform cooperatives that would ensure that workers all have a stake in the platforms that mediate their work and receive fair compensation for their time. Trebor Scholz and others have been working tirelessly to bring this vision into being for platform workers. The idea has even been adopted by Jeremy Corbyn as part of his ‘Digital Democracy Manifesto.’

However, while platform cooperatives will undoubtedly be beneficial for the workers who are enrolled into them, they do not inherently solve the problems introduced by a low market price for work. Stopping a cooperative worker being paid a fair wage from re-outsourcing that work to other workers for much lower wages could prove hard to police.

Others might look to digital unions or looser forms of networks as ways to build a sense of solidarity between digital workers. One explicit role for a digital workers’ union could be building a class consciousness amongst workers, even those at opposite ends of the globe. Such work would need to highlight the precariousness of much of the digital work that is out there. In this effort, it’s worth turning to Gina Neff’s work on this so-called ‘venture labour’, who pinpoints that this notable absence of class consciousness is characterised by “explicit expression of entrepreneurial values by non-entrepreneurs". This cannot be allowed to become the norm. Organising efforts should instead use those very digital forms of communication to highlight the fact that workers are receiving all of the risks of entrepreneurship, but few of the rewards.

These strategies for cooperative forms of organising do not guarantee to resolve the problems of the global digital workforce. But they present a promising starting point; an alternative vision for what digital labour should look like. As thousands of people join the internet every day, many of whom are hungrily looking for work, we need to creatively think about how best to use digital tools for collaboration amongst workers instead of competition between them. Our digital tools are new, the forms of work that they mediate are new, and many of the challenges they raise are new. But, in a world where the atomization of work continues to be used against digital workers, let’s not forget an old rallying cry that has served us well: workers of the world, unite!

(this article was originally posted at OpenDemocracy)

Digital work marketplaces impose a new balance of power

Factories can’t run, farms can’t produce, mines can’t be mined, supermarkets can’t be stocked, and call centres can’t accept calls if workers don’t go to work. Even though the decks are often stacked against workers, the basic fact that workers can withdraw their labour with strikes, and encourage others to do so with picket lines, has done much to improve working conditions in a range of industries around the world.

But in a world of globalized, digitized, and atomized work, we now have a fundamentally different balance of power.

Traditionally, a core weakness of capital in its struggle with labour was its need to be spatially fixed. Employers needed geographical sites in which workers did their work. This is not to say that capital wasn’t inherently much more mobile than labour. But, although jobs could be outsourced and offshored, those new sites of production were often vulnerable to a withdrawal of labour power.

Recognizing that as a group they could wield significant bargaining power, many workers formed trade unions. Unions could engage in collective bargaining with employers to demand a greater share of returns generated by the work done by workers. Collective bargaining also enabled workers to regulate how they were treated in the workplace. For example, grievance and disciplinary procedures were developed to protect workers from managerial despotism. Because of the ever-present threat of a withdrawal of labour power, this collective bargaining tended to be far more effective for workers than individualized bargaining done by atomized workers. Unions have been shown to significantly increase the wages and conditions for workers.

This is now all changing due to the advent of digital work marketplaces. Platforms like Upwork.com, Freelancer.com and Fiverr.com mediate the auctioning of work. Clients post tasks and workers bid on them. With some colleagues, I have spent the last few years studying this phenomenon: interviewing about 120 digital workers in Africa and Asia who do jobs as varied as programming, content creation, transcriptions and clickwork. We asked each one of them how comfortable they felt asking for a raise or for better working conditions, and whether they had considered joining a union.

What we heard back from many of them was that they felt extremely replaceable. The nature of much digital work means that workers from all over the world are thrust into the same marketplace and are forced to compete against each other on very short-term contracts: some lasting only a few hours. Digital workers in Kenya know that if they withdraw their labour, then workers in the Philippines can easily take their jobs. And Filipino workers likewise know that Indian workers can do their jobs if they were to refuse to work. Every worker on these digital platforms knows that there are many more out there to take his or her place.

Does this mean that digital work represents a move to a fundamentally post-union world? A world in which work is fundamentally characterized by competition rather than solidarity between workers? If we want to avoid a world in which competition between workers leads to a race to the bottom in terms of wages and working conditions, then I would argue that there are three key strategies that we should be thinking about to redress the current structural imbalance of power.

Networks instead of hierarchies

First, we need to strengthen efforts to build collective identities amongst digital workers. Many workers do not see the utility of unions, and many workers do not even see themselves as workers! Here there is a space for more groups like the so-called ‘Freelancers Union’.

It is important to point out that while that organization actually promotes precarious freelancing (their website features articles like ‘Top 10 signs you were destined to be a freelancer’), its efforts could nonetheless be useful in generating a collective identity amongst digital workers. Many workers also digitally assemble on Facebook groups, sub-Reddits, and other digital points of assembly to chat, complain, share opportunities, and exchange knowledge. As my colleague Alex Wood has demonstrated, these networks can be the launchpad for successful activism to counter workplace injustice. Thus, in areas where hierarchical unions or collectives make little sense, we can instead look to networks.

Digital-era strategies

However, although these efforts could be useful in generating a collective identity amongst digital workers, they might not alone tip the balance of power in their favour. A second strategy could therefore be to focus on effective trade union strategies that are properly brought into the digital age.

Some might argue that in a world of precarious short-term contracts, with workers all over the world competing against each other, it is impossible to emulate traditional strategies that made trade unions effective. But even though digital markets are not really fixed to a single geographic space, it might be strategically useful for digital workers to think of them that way.

In the same way that a physical picket line disrupts business as usual, a digital picket line might be used to similar effect. This is usually most effective when targeting the most consumer-facing firms in any value chains, which in turn involves understanding the virtual production networks of digital work. We hold Apple responsible for poor working conditions in Chinese Foxconn factories and we hold Nike responsible if any of their shoes are sourced in sweatshops, so let’s use investigative journalism and radical transparency approaches to equally hold the Googles and Facebooks of the world to account for poor conditions in the ways that they source work.

In practice, that would entail using a tactical media approach to take control of the visibility of corporate controlled narratives. This means making sure that problematic workplace practices are outlined on Twitter and Instagram hashtags; on comments on Facebook pages; and on search-engine results pages by using ‘Google-bombing’.

Consumer-led activism

But while these sorts of strategies remove the ability of companies to escape responsibility for any problematic production practices, they can do little to stop workers undercutting each other in digital work marketplaces. So, in tandem with digital picket lines, we need more consumer-led activism to support workers.

Consumer boycotts of companies engaging in the worst sorts of abuses often persuade companies to rethink how they source products and services. But what we probably also need are organizations committed to measuring and certifying fairness in production networks.

In much the same way that the Fairtrade Foundation inspects and audits sites of production of products like coffee and chocolate, couldn’t we envision a Fairwork Foundation that ensures that employers of digital workers adhere to certain social and economic standards? Doing so would allow end-users of services to express unity with workers by choosing services, platforms, apps and websites that have been certified.

Many have proclaimed that unions make little sense in our era of hyper-globalized digital work. And online work platforms are certainly designed to foster a sense of competition rather than solidarity between workers. Although this presents a somewhat bleak outlook for digital workers, there remain some strategies that can be employed to further the interests of worker collectives.

As ever more of the world’s population connects to the internet and looks for jobs, there is the potential for ever more downward pressure on wages and working conditions. Yet it is rarely in workers’ interests to compete against each other, so let’s find ways of collaborating, joining forces and building alliances.

We can do that by recognizing that employers and firms, despite being geographically separated from workers, still have digital ‘locations’ that can be challenged and disrupted. And we can do that by recognizing that even though we are now in an entangled, hyper-mobile digital age, the basic fact remains that everything around us - the apps, the data, the algorithms, the content - is ultimately produced by workers: workers who will receive support from users and consumers if only we could better understand how our actions reverberate through global production networks of digital work. There remains much we can do as we seek to bring a fairer world of work into being.