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Sarah Kessler on the Gig Economy’s Pitfalls and Complexities

Sarah Kessler

Sarah Kessler

There was a time not so long ago when gig work was seen as a panacea for the various perceived faults of the old-fashioned world of work. Where the traditional job was weighed down by a long, rigid work week, the gig economy offered flexible hours. Where the traditional job was hierarchical, in the gig economy you could be your own boss. Where the traditional job offered a slow climb up a predetermined corporate ladder, in the gig economy you were bound only by the limits of your own ambition.

Such were the confident arguments of the Silicon Valley entrepreneurs responsible for the rise of the type of “on demand” gig work — epitomized by companies like Uber — that matched services with customers in real time. With on demand services, the tech platform instantaneously matched gigs with independent contractors, cutting out the time-consuming process of sifting through candidates or applying for a gig. These technologies boomed in the early 2010s, but fast forward to 2019 and the drawbacks of this system, especially for its independent contractors, has become apparent.

In order to understand the complications of the gig economy from the perspective of its workers, InfoWorks reached out to Sarah Kessler, a journalist who covered the gig economy from its early days as a writer for Fast Company and Quartz, and continues to write about gig work as a writer and editor at Medium’s OneZero. Her book, Gigged: The End of the Job and the Future of Work [1], takes an unflinching look at the realities of a system of employment that doesn’t offer enough protections for the people who work in it.

InfoWorks: Your reporting began in 2011, when everyone was starry-eyed about gig work and Uber was still an unsuccessful startup. By 2016, Uber had raised hundreds of millions in Silicon Valley funding yet was facing 70 federal lawsuits. Why do you think the utopian dream of the gig economy hit the wall of reality so quickly with companies like Uber?

When companies like Uber were pitching their gigs, they used the language of entrepreneurship — they sold the idea that drivers were building their own businesses, and that this gig was a step up from working for someone else.

But if you’re really running a business, you have a role in negotiating your wages. Uber could cut its driver’s pay rate in half from one day to the next without so much as a notification. A real business owner can also do the work however and whenever they like. Uber played lots of games to incentivize workers to work during specific hours and specific places. Meanwhile, Uber’s internal communications suggested it considered its biggest competitor for workers to be McDonald’s. I think the disparities between the pitch and reality just became apparent quickly.

InfoWorks: Independent contractors are disproportionately poor and lack the many protections and benefits of employees, including health insurance and a minimum wage. This strikes me as a huge problem affecting millions of people, yet it’s largely missing from our political conversation. Why are so many overlooking the importance of changing the labor laws?

I think that the issue is really that we’ve built all of our social safety nets around the idea that everyone will have a traditional job — but many people today are gig workers, or have several part-time jobs, or are temporary workers, or have some other arrangement. Even people with full-time jobs are unlikely to work one 9-5 for 35 years and then retire.

These old safety net systems don’t work as well in this new era of employment. Even people who are employed traditionally have seen their safety nets weaken — they used to get pensions, now they have 401ks; they are paying more of their health premiums. I think it’s hard to look beyond debates about, say, how to classify workers in certain jobs and instead have a discussion about rebuilding this whole system.

InfoWorks: Your book followed five participants in the gig economy—an Uber driver, a woman performing fast-turnaround digital gigs for Amazon’s Mechanical Turk, a man teaching gig workers in a poor community, a startup founder, and a computer programmer. Of these, only the startup founder and computer programmer—men who started out with advanced educations and other privileges—were successful. Does the gig economy merely amplify existing inequities?

It’s probably not a surprise that people with more privilege and resources tended to end up in better situations. The difference with inequality in the gig economy is that if you’re not in that privileged group, there’s no safety net or labor protections to protect you. There are no minimum wage laws, no right to organize under federal labor laws, no anti-discrimination legislation.

InfoWorks: You followed the story of Managed By Q, a cleaning service startup that became more successful after changing the status of its workers from independent contractors to employees with benefits. As a result, profits went up and Managed By Q achieved a 90 percent customer retention rate. Will more companies follow this “Good Jobs Strategy,” or will it continue to be an anomaly?

The Good Jobs Strategy [2] is the name of a book written by Zeynep Ton, a professor at MIT Sloan, who studies companies that profit by treating their employees well. Her examples are not unknown or tiny companies — they include Costco, Trader Joe’s, and QuickTrip. One thing she writes is that it’s totally possible to profit off of squeezing workers and bad jobs, but that companies that know how to pair good jobs with operations that take advantage of employee loyalty and knowledge can also profit. It’s a choice, and I hope one that we will see more companies make in the future.

InfoWorks: Your “how the cake was baked” details about the inner workings of Uber were startling. For example, the company encouraged its drivers to take on sub-prime car loans, and its advertisements about driver wages proved to be wildly inflated. In the absence of appropriate labor laws, are lawsuits the main recourse for workers to fight these problems?

Yes, though the legal routes are limited because drivers sign arbitration clauses when they sign up to work for the company.

InfoWorks: You told the fascinating story of Terrence Davenport, a teacher at Samaschool in the impoverished community of Dumas, Arkansas. Samaschool was a nonprofit intended to help people find digital freelancing gigs, but it failed because Dumas residents lacked basic skills and access to technology—you pointed out that 60 percent of Davenport’s students didn’t own a computer, and many didn’t know where to type in a URL. What are the lessons learned here?

I think there are a lot of problems that Silicon Valley looks at and decides that it can solve with an app. But something like poverty is so much more complicated than that. One thing Terrence said he took away from the experience was that in order to help people in his community, a program like Samaschool would need to look at all the obstacles they faced, not just one or two of them. I wrote more about Samaschool here [3].

InfoWorks: Gig workers can’t unionize. What’s the solution?

Independent contractors can’t organize under federal union laws. They can’t start a traditional union, in other words. But they have organized some successful advocacy groups. I think it’s possible collective action could be effective outside of a traditional union, but I don’t know that we have the banner example of that yet.

InfoWorks: Are there any big changes you’ve noticed in the trajectory of the gig economy since finishing your book in 2016?

The passage of a law called AB5 in California is probably the biggest development. It will make it much more difficult for companies across the board to classify their workers as independent contractors. Uber and Lyft have said they won’t voluntarily reclassify their drivers, and that they will go to court to argue that the law should not apply to their businesses. It will be interesting to see how they ultimately respond if the law is enforced — they could pull out of California, take away drivers’ flexibility (the law doesn’t require this, but it’s what the companies have said will happen as a result), or figure out how to make their businesses work while paying drivers a minimum wage and lunch breaks.

 

Interview by Katherine Don [4]