A rose by any other name: Why the gig economy is just rebranded piece work

Friday, August 4, 2017

Shakespeare reckoned that a rose by any other name would smell as sweet. Old Will is right of course, because whether you call it rhubarb, a rhododendron or a rocking horse, a rose is a rose.

Sometimes though, if enough people use the new name of an old thing often enough, they can convince themselves and others that it is in fact a different thing. Then, having transformed the thing semantically, we can consider it a new thing, and treat it as a new thing. This is nothing new. It is marketing and corporate branding 101 and it does not matter most of the time.

In other situations, the rebranding language we use and the new labels we attribute to existing people, places or things matters a great deal. This is why we change the names of things in the first place — to try to apply a different meaning to an existing thing.  

Reheating old concepts for a new audience does not happen by accident. Asylum seekers do not become “queue jumpers” by accident. It is strategic.

The “gig” economy provides both a good example of this point — the term itself is a rebranding of age old practices — and the fertile garden bed within which a sea of roses by many other names bloom but don’t smell nearly as sweet.

The “sharing” or gig economy refers to the casual contracts and burgeoning workforce that digital platforms such as Deliveroo, Freelancer, AirTasker, Uber and other rideshare companies have created.

It is “piece work” rebranded, and has nothing at all to do with sharing. It is every person for themselves out there and it is not pretty. 

Piece work

Piece work has been around since the mid-1700s, and was a big feature of the sweatshop system of mid-19th century Britain. It was not a great time to be a worker.

Piece workers were paid by the product and not by the hour. There was no such thing as workplace health and safety. Workers wore no protective clothing but wore all the risks. They provided their own raw materials and on-costs, such as energy.

Labour was traded in a totally unregulated marketplace where the “boss” had all the power and workers had none. There was no such thing as workplace safety insurance, sick leave, holidays, minimum rates or any other condition of employment that has been won by workers and unions over the past 150 years or so.

So, it was pretty much exactly as it is today for many workers in the “new” economy.

In 2017, we can engage a worker, or be engaged to work, on exactly the same basis as in 19th century Britain. More than 150 years of employment law has, the new economy champions would have us believe, been swiped away with the swish of a thumb.

We don’t like to think so, because we like feeling modern and cool, but we are playing the same game now that we played in 2007 (regulated market capitalist economy). It is just the terms and names that have changed — like when the makers of Monopoly put out an updated version of the board.  

It is the great illusion and delusion of the last decade. It is like an international pantomime is going on, where we all feel so 2017 and “zeitgeisty” but we are treating workers and each other as though it is 1860.

The gig economy

The power of the gig economy delusion is both identifiable and explainable, but that makes it no less retrograde or sinister. We are very good at deluding ourselves and at being deluded by marketing spin.

We delude ourselves into thinking that because we use an app instead of the phone to complete the transaction, paying a person to drive you from A to B is “ridesharing” not getting a taxi. We convince ourselves that “dudding” our landlord by illegally sub-letting a room to a third party for cash is fine because it is Airbnb — and everyone’s doing it.  

All this gigging around with the names of things we have always done is great fun, until someone gets hurt.

Like any market, gig economy markets fail. That part never changes. Like any market, gig economy markets create externalities. There are information asymmetries between buyers and sellers. There are market power imbalances and consumer protection, equal opportunity and a whole range of other considerations and government objectives that need to be protected.

Markets fail and consumers and workers need protections. So regulations are needed to provide them and that is why we have governments. But too many regulators and governments, entranced by the technology and ambushed by the rapidity of the change and the power of the marketing, have been forgetting their core function. Governments, especially at state level, have been watching from the sidelines of the new economy, instead of doing what they are there to do — regulate.

Workers’ rights

The sinister elements of the gig economy rebranding come into sharpest focus in the context of workers’ rights.

As part of the gig economy delusion, many companies engage workers as what they term “contractors”. The implications of this are way beyond semantics and mean companies can subvert all of the conditions of employment that have underpinned Australian society for decades.

I say what they call contractors because that is exactly how this works. The companies just tell the workers that is what they are. No agency, or authority or anyone else has declared them to be such — it is just what the Ubers of the world say they are (The Fair Work Ombudsman is currently inquiring into the classification of Uber drivers and Deliveroo riders.)

From the current rate of $1.38 a kilometre for Uber, or $10 a delivery for Deliveroo, workers could be entitled to an Award wage of $20.36 an hour, with penalty rates and overtime — as happened in a recent sham contracting ruling against Pizza Hut delivery drivers.

If we tell workers they are not employees but contractors, eventually even the contractors come to believe it. Well, for a while anyway. Anyone with even half an eye on global economic and industrial trends would be aware that the masses are getting wise to the con.  

Tough gig

In Britain especially, the workers — city couriers, rideshare drivers, food delivery drivers — are twigging to the fact that this really is a tough gig. The British Employment Tribunal determined in October last year that Uber drivers were employees not contractors. Uber argued that it was a technology firm not a transport business and that its drivers were independent, self-employed contractors who could choose where and when they worked.

The Tribunal judges were scathing about Uber’s arguments, however, accusing the firm of “resorting in its documentation to fictions, twisted language and even, yes “brand new terminology”. They quoted Hamlet to suggest that Uber’s British boss was “protesting too much” about its position.

“The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous,” the judges said. “Drivers do not and cannot negotiate with passengers … They are offered and accept trips strictly on Uber’s terms.”

Fair Work’s Pizza Hut ruling, taken with the international developments, is encouraging advocates such as Ride Share Drivers United—US and Australia (RSDU) and the Transport Workers Union to push for change here too. Now that the first workers are out of their seats in anger, regulation of the new economy will spread like a Mexican wave across the developed world.

Regulatory relief cannot come soon enough for existing workers. It can also stop the spread of this rights eating virus before it infects other sectors.

Gig economy models of “contracting” are being developed for new frontiers all the time. The aged care sector, which currently employs more than 300,000 people but will likely employ nearly a million Australians by 2050, is one area where providers are seeking to exploit the idea that employment costs can be reduced by subverting the National Employment Standards and engaging contractors rather than employing people.

The ridesharing industry

Where the true exploitative horror of the gig economy is most vividly playing out now, providing a cautionary view of the future, is in the ridesharing “industry”. The key characteristics of this devil child of the app age are that workers are “contractors”, and capital and risk is strictly BYO (plus corkage of between 10 and 20% of your earnings).

It is just like in the good old days of 1860 really. Only now, bringing your own capital does not mean buying a few textiles to stitch together at home. It means providing a good car and the petrol to fuel it. Throw in the water, sweets and insurances (that’s right, the worker has to self-insure) and away you go.

Data sets on the exact earnings of gig economy workers are hard to find, but according to the RSDU, it is virtually impossible under the current arrangements for drivers to make minimum wage once costs have been taken out. There are just not enough hours in the week to get the necessary economies of scale.

In a media release in June this year, RSDU said Uber drivers’ inability to negotiate fares or communicate with customers outside the Uber app meant they were subject to a “classic sham contracting arrangement”.

The RSDU said: “The prices aren’t sustainable and drivers have been complaining for a year now. As a subcontractor, drivers should be able to bargain about the price of the service. But Uber does what an employer would do — it sets the price. They can’t just call us whatever they like and get away with it.”

Ridesharing is just one example of the scam being perpetrated on workers and governments. Australia has had 26 years of economic growth but there are workers, in numbers that are growing by the day — 40% of workers have freelanced in the past 12 months — who are earning below minimum wage, receiving no minimum employment entitlements and not generating one cent of superannuation.

Is it any wonder inequality has entered the national debate? We are sleep walking, heads down over our iphones, into an economic and social disaster.

Regulators have been slow to react to the gig economy, but the wave is coming. The Fair Work Ombudsman’s inquiry into the classification of workers as contractors by Uber and Deliveroo, should be complete in time to allow its findings to inform the next phase of the Victorian government’s ridesharing legislation, scheduled for next year. Victoria has an opportunity to lead the development of contemporary regulatory models to regulate the rough edges off the gig economy, especially in terms of workers’ rights.

‘Flexibility’

While we wait for the regulators to catch up, we should at least begin to call out the inherent injustice of the gig economy for workers. We need to expose the “gaming” of the system and the language the sharks hide behind, like “flexibility” and "choice”, neither of which will pay the rent, feed the kids, or put shoes on their feet. You cannot eat flexibility, and choice will not help you save for your retirement.

Those peddling the soothing powers of “flexibility” branded snake oil, target their marketing directly and cynically at women in many instances. The female ridesharing companies are very good at this, selling flexibility with the passion of the suffragettes, while patronising a whole gender with promises of 1960s tupperware camaraderie.

They sell women the promise of a supportive online community and the freedom of run their own race, with no corporate culture to conform to or nasty boss telling them they cannot go home early to see the kids.

Trouble is they won’t get paid. They will be free to have no superannuation and to be paid less than a school kid working at Coles.

However, unlike that school kid they will not be paid according to a legislated minimum or accrue super and will have to pay a lot of money just to stay on the treadmill (such as the monthly instalment on the car they leased on the basis of very questionable earnings forecasts of the operators) to keep alive this great “flexibility” dream.

And if you get sick, injured, attacked, traumatised, terrorised or squashed by a bus — too bad. No WorkCover for you. Just like the good old days, before those pesky unions came along and delivered us all these rights and protections.

We have strayed, or been led by gig spin doctors, so far from our values that you can even find ads seeking new driver victims (sorry, “partners”) on ethical employment websites. Yes, jobs offering no minimum wage, no employment standards, no superannuation, WorkCover or sick leave, are marketed as ethical these days.

It is merciless and relentless in its cynicism.

In gig circles, flexibility is worshipped by the operators. Modern workers are the lucky ones, Uber and Deliveroo would have us believe. They are being delivered from the chains of corporate servitude and into the brave new world of “choice”. 

To the extent that a choice between working for peanuts and not working at all is a choice, then I guess they are choosing these flexible arrangements. But that is like saying it is OK for 7-Eleven to pay its student workforce under the legal minimum because they are choosing to work for that money.

That is what exploitation is — paying someone less than the law requires because their circumstances compel them to take whatever is on offer. It cannot be anything else but exploitative. Piece workers had “flexibility” too.

Sure, it suits some workers to be “flexible”. Apparently. But I don’t remember the great “flexibility” strikes or marches. I don’t know any workers who have taken to the streets to demand a return to the “no work-no pay” models of 1860s flexibility.

I do remember witnessing and reading about the battles fought by working people in this country for minimum wages, for the 38-hour week, for universal superannuation and workers’ compensation and maternity leave.

In Britain recently, Labour frontbencher Rebecca Long-Bailey said she would not use Uber because to do so would be “immoral”. That’s what “calling it out” is. We need to be brave enough to do it here too. We should stand up for our core values, call a spade a bloody shovel and demand these app-enabled wage burglars treat people with the decency that they deserve.

If we don’t, and we allow ourselves to be conned into thinking our rights have been lost in the gig economy re-boot, it is we who will need to start all over again. Do we really have to go back and fight for minimum wages or superannuation, or maternity leave — again? What happened to the vision of a country of privately superannuated retirees? Who will fund all the age pensions of the non-superannuated millions in 20 years? Uber and Deliveroo? Not likely.

Being employed in this country used to mean having a rosy future. Don’t let the hip gig spinners take the secateurs to our hard-won rights.

[Richard McEncroe is a Melbourne-based writer and public policy consultant.]

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