Platform Labour: Sharing Economy or Virtual Wild West?

Friday, 29 January, 2016

by Ursula Huws

Ever since the implications of the ‘silicon chip’ for work first penetrated public awareness back in the 1970s, commentators have prophesied the end of the 20th century post-war model of stable, full-time, permanent employment. At first, attention focused on the deskilling effects of digitisation and the mass unemployment that might result from computerised automation. In the 1980s attention shifted to the potential of communications technologies to relocate employment in the form of teleworking. By the 1990s, when global telecommunications networks were in place and the Internet was born, the discourse opened up to encompass worries about offshore outsourcing of digitised services. Now, in the 21st century, there are similar fears: on the one hand, a resurfacing of concerns that the use of robots will destroy skilled jobs, and, on the other, apprehension about the implications of a development for which there is not yet even an agreed name: the exponentially spreading use of online platforms for managing work.

The variety of terms used to describe this phenomenon reflects a confusion in public attitudes. Phrases like ‘sharing economy’, ‘digital commons’ and ‘peer-to-peer networking’ reflect a Utopian vision in which the Internet enables individuals to connect with each other co-operatively, to provide each other with services (and, using 3D printing, even goods) for mutual advantage. For some idealists, this is even seen as a way to bring about a post-capitalist society. Others, using terms like ‘workforce on demand’, or ‘liquid labour’ see it as a way of creating a just-in-time workforce, sometimes described as a ‘human cloud’ or ‘crowd’, that is available on tap for specific tasks. Terms like ‘crowdsourcing’ or ‘cloudsourcing’ link this concept to existing organisational practices of ‘outsourcing’ or ‘global sourcing’ whereby the world is scoured for the cheapest sources of appropriately skilled labour. Switching the focus from the needs of the corporation to the reality for workers, we find phrases like the ‘gig economy’, drawing on the experiences of workers in the creative industries to describe the reality of a working life made up of unpredictable hops from one short-term engagement to the next. At the aggregate level, ‘mesh economy’ and ‘platform capitalism’ are new coinages that struggle to capture the character of an interconnected global economy in which labour is increasingly organised via open market-type relationships mediated by online platforms. Across all these different discourses runs a common theme: work is being changed irrevocably and new legal and political frameworks will be needed to accommodate these changes.

But how seriously should politicians take such prognoses? There have, after all, been four decades of scaremongering about the impacts of technological change on work. Yet on the whole, much employment has remained obstinately traditional in its form. According to Eurostat, only 15% of the European workforce is self-employed, a proportion that has changed little in decades. And less than 15% have a contract of limited duration. Might not this just be another case of crying ‘wolf’?

In my opinion, this time round we really are facing a sea-change in work organisation. This is not so much because an entirely new phenomenon is emerging (although it undoubtedly is) but precisely because of the cumulative impact of all the other changes that commentators have been noting over the past forty years. Sector by sector, occupation by occupation, company by company, disparate trends have reached critical mass, converging to produce a kind of snowball effect in which each change induces others, with the potential for generating an avalanche.

What are these trends? One is standardisation, making it possible for processes and tasks to be counted and used to generate targets and performance indicators. Linked to this is modularisation, enabling work to be broken down into units that can be separated from each other spatially and contractually. Connected by telecommunications and co-ordinated by online platforms, tasks can be mixed and matched in innumerable configurations, leading to the atomisation of a workforce that must adapt to ever-changing circumstances. Whether formally employed or not, workers must now keep their skills and CVs up-to-date and repeatedly ‘pitch’ themselves for new jobs, promotions, grants or opportunities to participate in short-term project teams. They are also increasingly expected to be available round the clock to respond to emails, text messages or app-generated notifications of new tasks that await them.

These are some of the trends that have been unfolding in the formal economy. But the novelty of the current wave of online platform development is that it also encompasses informally organised work. In the past, cleaners and gardeners might have found work through word-of-mouth networks in their neighbourhoods, translators or proof-readers by using specialist agencies, plumbers by advertisements in the Yellow Pages, taxi drivers by obtaining official licenses to wait in designated ranks or creative artists by cultivating personal contacts with wealthy patrons. These are now swept aside. The customer’s first port of call when looking for a worker is now most likely to be a Google search. Here, the highest ranked item is likely to be a global platform such as Uber, Helpling, Elance or Freelancer. With their traditional sources of work drying up, self-employed workers are increasingly driven into the arms of such companies. On the plus side, this makes it easier for new workers to enter these markets, many doing so in search of an additional source of income rather than as a main job. More negatively, freelance workers face new constraints. Quality is assessed based on customer ratings, specific to each platform, so carefully-nurtured personal reputations count for nothing. Tasks are more likely to be predefined and pre-costed than negotiated individually with clients. Cash-in-hand payments are a thing of the past and all activities are tracked electronically. If they need work, platform workers must remain permanently logged on, ready to respond at a moment’s notice to a request to ‘accept’ a new task.

Platform labour is growing exponentially. The Intuit management consultancy reckons that by 2020 contingent workers will make up nearly half of all US workers and 11% of these will be working for on-demand platforms. McKinsey estimates that by 2025 ‘online talent platforms’ could boost global GDP by 2.7 trillion US dollars. Accurate figures are hard to come by because so far no definitions exist that can be captured in official statistics. In fact nobody is even clear what kind of legal entities online platforms are. Should they be regarded as markets, temporary work agencies, labour exchanges, social enterprises, suppliers of services, advertising platforms, online directories or private employment agencies?
Determining their status will be a first step towards measuring their growth. But it is also a necessary prerequisite for deciding whether and how they should be regulated. How should their users be insured? How should disputes be arbitrated? Who is legally liable for verifying the credentials of workers and rectifying mistakes? Should accidents be regarded as issues of consumer protection, public safety or worker protection? What body should be responsible for inspection? How and in what circumstances should EU directives and national labour regulations be applied?

These are just a few of the regulatory issues raised by these developments. But platform labour also raises broader questions for policy makers: What kinds of social protection systems are suitable for workers who do not know from one hour, day or week to the next when they will next be working, and for how long? How can the rights of self-employed workers be brought into line with those of employees?

And, if platform labour spreads as quickly as predicted, what are the long-term implications of a situation in which a percentage of the cost of each transaction ends up in the coffers of a company which may be based on a different continent and is highly unlikely to be making any contribution to the cost of the worker’s education, health, housing, childcare, pension or the infrastructure of the region where she or he lives? Maybe we should be looking for new ways to exploit the potential of online digital organisation to create local platforms in Europe that combine flexible ways of linking workers with clients while protecting these workers’ basic rights and ensuring that the profits from their activities remain in their local economies.

Biographical note

Ursula Huws is Professor of Labour and Globalisation at the University of Hertfordshire in the UK.