The gig economy: stop making burnout a lifestyle
A decade ago a ride-hailing service called UberCab launched in Silicon Valley. Since then the rebranded Uber has burned through $10bn. It has never made a profit. The business model relies on shareholders to subsidise cheap rides so that the company can squeeze out rivals and establish a monopoly. Uber’s success is that 90 million people now use it in 700 cities around the world. After it floated on the stock market, its two founders became billionaires. While the owners of Uber have become immensely wealthy, the people who drive its cars have paid a heavy price. Unions say that Uber drivers in the UK earn an average of £5 an hour, well below the legal minimum wage of £8.21 for employees aged over 25. They can work up to 30 hours a week before breaking even. Hundreds went on strike in May to protest against poor pay and conditions.
Across Britain, gig work – part of a casualised, precarious and on-call jobs market – is growing at a giddy rate. The sector has more than doubled in size since 2016 and now accounts for 4.7 million workers. In part this is due to new technology: people are using apps on their mobile phones to sell their labour. The core business model relies on near-instant recourse to a large pool of on-demand workers looking for their next gig. Uncertain work is becoming the norm, with the result that unemployment statistics look better than the way Britons feel. It is an environment of overwork, marked by intense bursts of exhaustion. One gig-economy firm even tried to market burnout as a lifestyle by claiming its workers were “doers” for whom “sleep deprivation is [their] drug of choice”. Nothing can disguise the fact that the gig economy’s rise has been accompanied by a fall in the fortunes of working households – which now comprise 58% of those below the official poverty line; the figure was 37% in 1995. In a seminal paper, Alex Wood and other researchers at Oxford University found that half of the gig work in the UK is in our streets, supplying food or couriering parcels or offering taxi rides.
The other half of gig work is remote – providing digital services, such as data entry and programming, on platforms such as Upwork, Freelancer and Fiverr, which act as auction houses for human labour, where people place a bid to do the work on offer. Those in richer nations can find themselves undercut by those in poorer places. In 2017 US freelancers using Upwork netted $27m – only a little more than those in India. Many of the world’s biggest firms use these apps to outsource work to lower costs. Microwork, where tasks are broken down, is dominated by Amazon’s Mechanical Turk division. Two-thirds of its US workers earn less than the federal minimum wage.
The office faces a future like that of the factory floor in the 1980s, when work was shipped abroad to save money and boost profits. In his book Humans as a Service, the Oxford academic Jeremias Prassl says the gig economy’s problems – for workers and markets – are driven by firms “presenting themselves as mere intermediaries rather than powerful service providers … [to] shift nearly all of their business risk and cost onto others”. The simplest illustration of this is Uber’s claim that its drivers are not employees – at a stroke this potentially avoids VAT liabilities of £1.5bn. That sort of cash could have been used to pay towards a health service dealing with the fallout from insecure jobs with unpredictable shifts. A landmark study tracking people who lost their jobs in the recession of 2010 found that those who ended up with poor-quality work – with low pay, low autonomy, and high insecurity – had higher chronic stress levels than those who had remained unemployed.
Consumer rights are being rewritten – often to the customer’s detriment. People using popular takeaway apps such as Uber Eats and Deliveroo can order from thousands of restaurants without being aware of their poor hygiene ratings. Such practices undermine the trust needed for the market economy to function smoothly. Hidden beneath the claims of autonomy is the fact that the platforms exercise firm control over most aspects of how, and to what standard, work is done. The technology can monitor whether a freelancer is working for the whole time billed. It can detect whether a gig-economy driver brakes too hard. Too many low rankings might see a worker kicked off a platform. Productivity becomes the way to measure human value. Firms can cherrypick workers – usually those without children or in good health. What happens to those who have lives that don’t match the gig economy’s demands?
Commercialising spare time
In the gig economy, employees are no longer protected by a legal system that was designed for a different age. At present there are three categories of employment status in the UK: employee, worker and self-employed. Only the first category is entitled to full employment rights, including redundancy payments, parental leave, and protection against unfair dismissal. The second category ought to have their minimum wage and trade union rights protected, as well as paid holiday entitlement. However, gig-economy firms assume their workers to be self-employed, and fight trade unions such as the Independent Workers’ Union of Great Britain (IWGB) who claim otherwise. In almost every case workers in the gig economy have proved that they are in fact employees. It is absurd that judges must protect workers from forced self-employment. Britain does have labour laws, but they are not fully applied. This allows gig firms to fight claims individually and then just pay off the worker who wins in court without applying the ruling to the wider workforce. The Conservative government offers only cosmetic changes to the rules governing the gig economy. It would be better to regulate platforms properly. For example, the IWGB suggests that Uber’s licence to operate in London could be made conditional on respecting drivers’ employment rights.
It ought to be possible for workers to have flexible work without denying them basic rights. Businesses can only compete fairly if employment rules are equally applied and consistently enforced. On a deeper level, the gig economy is erasing what was for many the traditional goal of working: to buy free time. Instead we are being seduced and coerced into thinking that it is good to commercialise our leisure time and possessions. Time to spare? Exchange it for cash by delivering pizza. Your apartment free for a week? Rent it out for extra cash. This will not make us happy. We ought to work and have careers that enable us to focus on our relationships and have soul-enriching pastimes. It cannot be socially good to consider leisure time as a lost commercial opportunity. Unless we can turn away from such thinking, we shall see ourselves acting less like humans and more like companies.