Long live the new serfs

Good news for the Precariate and bad news for the sharing economy—this week the California Labor Commissioner ruled that an Uber driver was an employee, not an independent contractor.

While Uber is quick to point out that the ruling only applies to this single California driver, it’s a significant precedent and an early salvo in the battle that is lining up over the Uberization of work.

Many have remarked about the demise of the long-term employment contract. The financial crisis seems to have accelerated a long-term trend in which the twentieth century model where most working adults enjoyed stable employment by a business corporation has diminished, outsourcing of many corporate functions is deemed more efficient, and a much bigger chunk of the population finds itself working on a project-by-project basis as an independent contractor.

The California Labor Commission’s opinion lays out in detail the new version of work envisioned by the sharing economy—workers recategorized as users.  Uber’s argument, in essence, is that it is no more than a software company whose app matches drivers and passengers, albeit under licensing terms designed to brand the service under uniform standards of safety, lawful use, and quality control.  Uber’s relationship with its driver is not even an independent contractor agreement, but a “Software Sublicense and Online Services Agreement.”  

“Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” contends the California Labor Commission.  “The reality, however, is that defendants are involved in every aspect of the operation.”

The opinion makes a compelling case for the amount of control Uber exercises over its drivers.  But it doesn’t really bite into the copper wire of the deeper issue, which is that Uber’s business model is about a relationship that involves even less responsibility than the retention of an independent contractor.  The agreement excerpted treats the revenue-generating participants in Uber’s system, be they drivers or passengers as mere licensees.  Users.

There are plenty of reasons to be anxious about the paradigm shift this represents.  Employers bear substantial social welfare burdens in our political economy.  A shift into a world where we all work for the app, waiting to bid on the next project, providing all our own assets needed to do the work, and  bearing the responsibility for our own health and welfare benefits, represents a profound change.  It will be socially and economically destabilizing, especially if it unfolds at the pace at which sharing economy “unicorns” grow their market caps.

But adherence to old models is not a viable path into the future, and we can count on state labor commissioners and their kin to enforce anachronisms that are unsustainable in an emerging world order governed more by networks than centralized institutions.  

The Uberization of work makes every worker both an owner and a (cyber)serf.  The challenge is getting through to the other side of this transition in a way that liberates more than enslaves—something that looks more like a constellation of autonomous producers liberated from the very idea of “work,” and less like 21st century techno-feudalism.  To do that, it seems important to think about the problem in network terms, as a bargaining between users and application providers rather than employers and workers (or companies and customers).  The old treatises talk about the law of work as “Master and Servant,” but the new work is more about client and server.

Uber does not publicly disclose its statistics, but appears to have hundreds of thousands of drivers, and presumably even more customers, from which it derives substantially all of its revenue.  One has to think it’s inevitable that those constituencies will begin to organize and bargain collectively, and that the balance of power will shift in a much more fundamental way than can be achieved by the parasitic opportunism of the class action lawyers lining up to enforce old rules (and the rich sanctions they provide).  While the current wave is driven by concentrations of capital in the entrepreneurial innovators, one can imagine a longer-term future taking shape in which, just as Silicon Valley turned its workers into stockholders, distributed business models like Uber’s will lead to some kind of user equity.  

Of course, a keen look at the relationship between social media platforms and their users would suggest a different outcome.  There, users provide most of the content that is the real value of the business, and do so without pay, on their own time, motivated by little dopamine bursts of social attention and, in some cases, the indirect economic value that can generate.  No doubt naively, I believe this paradigm will eventually shift, as the biggest users start to demand a share of the value their traffic and following generates for the network operator.   One can even imagine new networks where the users are the only owners. Time will tell.

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