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Mainstream, VOL LX No 4, New Delhi, January 15, 2022

Dealing with the “Uberization” of the Workforce: Emerging Complexity in Employment Relation | Kingshuk Sarkar

Friday 14 January 2022

by Kingshuk Sarkar *

Introduction 

The emergence of the gig or platform economy is one of the most important changes in the world of work. An important outcome of this is the introduction of digital labour platforms which includes both web-based platforms, where work is outsourced to a geographically dispersed population (‘crowd work’) and location-based applications (apps) which allocate work to individuals in a specific geographical area, mostly to do local, service-oriented tasks such as driving, delivering food etc.

Such forms of employment are overwhelmingly technology driven and has made remote work environment distinctly possible. The ability to exchange large data and information in quick time without incurring substantial cost formed the foundations of digital economy. Digital labour platforms are now part of our everyday lives. Such technological innovation has had an impact on the world of work. Such form of employment is also referred as ‘uberization’ (Uber being the pioneer in this field).

Digital labour platforms offer new possibilities for businesses and more employment options for workers, including those who were previously outside the labour market. Such platforms are leading to changes not just to the organization of enterprises and work processes but in many cases to the relationship between workers and employers as well.

It is widely documented that the COVID-19 pandemic has had a huge impact on the labour market. Digital labour market has expanded and along with it related technological innovations like cloud computing and the use of big data and algorithms. The outcome has been innovative ways of working and flexibility for both workers and employers. The remote working arrangements adopted by many during the past one and half year have brought a rise in e-commerce, e-services and online freelance work. For many who lost their jobs, in both developing and developed countries, digital labour platforms have offered alternative employment opportunities. Many businesses have relied on digital labour platforms to keep operating in lock down situation and cater to market.

But there are many anomalies and challenges. This new form of employment allows platforms companies to organize work without having to invest in capital assets or to hire employees. They mediate between the workers and customers and manage and control the entire work process with algorithms. Workers on digital labour platforms mostly struggle to earn a decent living and lack social protection and are outside institutional social security. They were mostly without work during pandemic induced lockdown and had a very difficult time even to subsist. Gig and platform workers do not get opportunity to participate in collective bargaining or social dialogue to raise these issues before the appropriate forum.

To address such challenges, many governments have initiated regulatory measures to deal with the issues such as the employment relationship, health and safety standards and inadequate social protection. However, variations in these regulatory responses have created further challenges. Things have become more complex because many digital labour platforms operate across multiple countries and jurisdictions. Standard regulatory framework is missing and workers live in perpetual uncertainty. Ensuring that all workers, irrespective of their contractual status, are covered under legislative protection and accommodated within social dialogue framework is something which has contemporary relevance.

‘Uberization’ 

The uberization of labour represents a particular form of capitalist accumulation, by producing a new form of mediation of the subsumption of the worker who takes responsibility for the main means of production of the productive activity.

From the 1970s, the development of the large industries’ productive forces gradually incorporated the use of microelectronics and network connectivity to the productive system. As a result, there was a significant change in the organic composition of the capital of several companies, with a reduction in employment (less investment in variable capital) and greater investment in technology equipment and machinery).

The online environment supported by the Internet, as a movement prior to uberization, led to the crowd work, being able to act directly or indirectly in the process of valorization of value (the increase in the value of capital assets through the application of value-forming labour in production). Also known as crowdsourcing, in this type of work the function normally performed by a single worker (or small group of workers) becomes indefinitely decentralized. In this case, a company can turn to the crowd asking for help to perform a service, resulting in a large number of people who take responsibility for a small part of the task.

Parallel to the development of the crowd work activities, there is the emergence of the sharing economy. This system is about sharing resources (goods or services) intermediated by an online platform, and there are similar concepts such as the collaborative economy, collaborative consumption, on-demand economy, and peer-to-peer economy.

In the context of smartphones applications with wide access to the population and organizations entering the crowd work system, the company Uber appeared in the USA, in the city of San Francisco, in 2008. The idea behind Uber seems to be very simple: in cities, some people have the time available to work as freelance drivers (either because they are unemployed or because they want to supplement their income beyond the main occupation) and there are potential passengers. Anyone who needs to travel around the city considers the available options. Choosing the Uber service, with few touches on the smartphone the driver appears and leaves the applicant in the destination ordered. With this ‘simple’ business model Uber has reached in 2017 a market value of 70 billion dollars (Slee, 2017).

New collaborative economy models are influencing existing businesses. The most visible examples of the collaborative/platform economy involve renting apartments (Homestay, Booking.com, Oyo), sharing cars (Uber, Ola) and the delivery of goods and services (Amazon, Flipcart, UrbanPro, Zomato)

Surveys reveal significant economic potential within the collaborative economy but also a large degree of uncertainty regarding rights and obligations (liabilities, protection of customers, regulatory framework, tax and social security, employment status). In the case of Uber, the worker has to have the car, the cell phone and all the main physical means to carry out the activity. So why do Uber appropriate surplus-value?

To discuss this issue, it is worth remembering that, as a commodity, the labour force has use-value. In the context of the great Toyotist industry, the worker, in order to maintain the use-value, is led to adopt a position of greater creativity, investment in themselves for continuous training, technological updating and emotional connection to the organization. In such a context, the worker must ‘invest’ in the equipment and machinery necessary to carry out the work of transporting passengers. ‘Pay per piece’ is the ultimate form of remuneration for capitalism. Uber now presents the ‘pay per ride.’

Uber had increased the number of drivers from 10,000 in 2013 to 150,000 in 2015. Such expansion was facilitated by the large inflows of venture capital funds over time. The funds raised in the financial market strongly contributed to the company’s expansion strategies. In the cities where it is in the initial stage of business, it is common that Uber offers benefits for customers (discounts and free rides) and to drivers (gratuities, attractive remuneration, bonuses when recommending the opportunity to new drivers). As Uber consolidates its position with customers and drivers and the business is stable in the new city, the consistent trend is that the drivers’ compensation is reduced (the price paid per kilometer reduces and/or there is an increase in the percentage of the ride retained by the company), and discounts reduce as well (Slee, 2017).

According to the New York Times report (Scheiber, 2017), considering that the company cannot request driver to raise productivity directly (since drivers are not employees), Uber uses methods of psychological manipulation through its algorithms. Before completing a ride, the driver already receives the call to accept the next ride, so that this reverts to an almost euphoria for more money. In addition, in order to keep drivers active, the company has exploited the tendency of some people to set personal goals, so when the driver presses the button to disconnect from the application, they receive an alert from Uber that they are close to reaching their goal - which often makes them change their mind and continue working.

There are also more explicit control methods. If the driver rejects many rides, they may be suspended or disconnected from the platform. Drivers must follow a series of standards set by the company, such as not soliciting work directly, not passing personal numbers on to customers for private rides and the obligation to follow the price of the ride determined by the application. The supervisor of the driver’s performance, instead of someone hired by the company, is the customer. As the service is a commodity consumed concomitantly to its production, there is no one better than the customer to evaluate the provider. According to the Uber website:

‘Ideally, you should keep an excellent service to your passengers on all rides, turning on the air conditioning, offering candy and water and especially keeping a clean car, vacuumed from the inside. That way you will, without a doubt, be able to KEEP YOUR GRADE ABOVE 4.6’ (Uber, 2018).

Thus, with a maximum of 5 stars in the evaluation of each customer, the driver must maintain at least the average rating of 4.6. If the driver is not able to maintain this performance (which also depends on the subjectivity of the customer who evaluates them), the driver may be temporarily suspended or even instantly disconnected from the platform without any notice from Uber. The evaluation system also reinforces the valorization of managerialism by society (Gaulejac, 2007), which is no longer limited to the formal labour market and outsources part of the control activity to the consumer.

Thus, though the worker is apparently autonomous, but it is the company that defines the goal and punishes them if the goal is not achieved. This situation does not, therefore, support the common discourse that attributes to the uberized worker the status of being their ‘own master’.

The Way Forward

A tripartite effort by the State, companies, and workers to identify where workers fall on the spectrum of flexibility and regulation is critical. The way forward for platform workers is through a socio-legal acknowledgement of the heterogeneity of work in the gig economy and the ascription of joint accountability to the State and platform companies towards ensuring labour rights.

Efforts should be made to reclaim employer-employee relation in digital labour market. Terms of employment and conditions of service should be clearly expressed. Basic norms of international labour standards must be followed. Collective bargaining and social dialogue should be encouraged such that consensus can be arrived at with regards to basic issues of employment relation. Gig economy workers are too important to be left out of protective legal framework.

References:

  • David Silva Franco ¹ Deise Luiza da Silva Ferraz ², Uberization of labor and capitalist accumulation, Cad. EBAPE.BR, v. 17, Special Edition, Rio de Janeiro, Nov. 2019.
  • Gaulejac, V. Gestão como doença social:ideologia, poder gerencialista e fragmentação social. Aparecida: Ideias & Letras, 2007
  • Howe, J. The rise of crowdsourcing. Wired Magazine, n. 14, p. 1-5, 2006.
  • Nerinckx, S. The ‘Uberization’ of the labour market: some thoughts from an employment law perspective on the collaborative economy. ERA Forum 17, 245—265 (2016). https://doi.org/10.1007/s12027-016-0439-y
  • Signes, A. T. O mercado de trabalho no século XXI: on-demand economy, crowdsourcing e outras formas de descentralização produtiva que atomizam o mercado de trabalho. In: Leme, A. C. R. P.; Rodrigues, B. A.; Chaves Junior, J. E. R. Tecnologias disruptivas e a exploração do trabalho humano. São Paulo: LTr, 2017. p. x-y.
  • Slee, T. Uberização: a nova onda do trabalho precarizado. São Paulo: Elefante, 2017.
  • Uber. Afinal, qual é a nota mínima exigida pela Uber? 2018.

Views expressed are that of the author.

(Author: Dr. Kingshuk Sarkar is an independent researcher. He worked as a labour administrator and presently a visiting faculty at the Goa Institute of Management.)

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