Individualists and the Gig Economy

The 'gig economy' or sharing economy depends on discrete agreements for the performance of specified tasks or delivery of specified services. The important point is that the person doing the work is not an 'employee' of the person offering the work. Flying free, and being nobody's employee, is not a problem for that species of individualist who relishes independence and personal responsibility.

It is customary these days to poke fun at 'rugged individualists', those tall handsome men in the films, showcasing chiselled features and defined biceps, who built great railroads and steel factories in the nineteenth century. Not everyone wants to identify with such heroes, particularly as they tend to be blond and grey-eyed and have names like 'Hank.' How non-inclusive is that.

​So it was with a measure of delight that I read that Rose Wilder Lane's real-life rugged individualists, her own friends and relatives and neighbours, were nothing like a hero from Ayn Rand's fiction. Nothing at all. No movie-star qualities there. They were just ordinary gig workers, with follies and foibles, like you see around you every day, trying to earn a living and hassle for the next gig by means both square and dodgy.

​They were riotous speculators; they gambled in land, in furs, in lumber and canals and settlements. They were town-lot salesmen for towns that did not yet exist and, more often than not, never did materialize. They were ignorant peasants, prospectors, self-educated teachers and lawyers, ranting politicians, printers, lumberjacks, horse thieves and cattle rustlers.

Each was out to get what he could for himself, and devil take the hindmost. At every touch of adversity they fell apart, each on his own; there was human pity and kindness, but not a trace of community spirit.
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Rose Wilder Lane, Give Me Liberty
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In those days there were no such things as ‘employment rights’, and people preferred freedom to material comforts. I know, shocking. In the age of ‘master and servant’ there were documented cases of servants leaving their masters as soon as it was safe to leave without running the risk of being thrown in prison or flogged for daring to breach their contracts of servitude. They would go off, get a little piece of land, and scratch a living from the soil, poorer but happier. They were so misguided, that it appears to modern eyes almost as if they must have been suffering from some kind of mental affliction:

[Indentured servants] as soon as the time stipulated for their indentures is expired, immediately quit their masters and get a small tract of land in settling which for the first three or four years they lead miserable lives, and in the most abject poverty: but all this is patiently borne and submitted to with the greatest cheerfulness, the satisfaction of being landholders smooths every difficulty, and makes them prefer this manner of living to that comfortable subsistence which they could procure for themselves and their families by working at the trades in which they were brought up.

​E.H. Phelps Brown, The Economics of Labour (1962) p. 11
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All sorts of workers embraced this madness. Even miners, whom we now think of as the quintessential dependent workers, would opt to fly their own kites rather than be contracted as servants: 'Even in the mines there were some free men who took small concessions and worked them themselves.' [editor's note: for our younger readers who won't know what a miner is, these were men who went underground to hew coal out of the earth to be used as fuel. I know, shocking.]

It is difficult for modern human beings to grasp how people from long ago could be that irrational. Why give up having a nice master to look after you and pay you a regular guaranteed wage, to go off on an adventure that is certain to produce nothing but abject poverty for at least three or four years? Today people wouldn't tolerate this for three or four minutes, let alone endless long actual years. It seems that this had something to do with not wanting to be under the control of someone else, following their orders. Poor, but free. The mere fact that they were promised a guaranteed wage in return for binding themselves to secure employment was not viewed by these peculiar people as a good reason to give up their autonomy and discretion in deciding when, how and where to work:

​Men who can spend the hours of their working days at their own discretion regard it as an indignity to put themselves under the orders of another man. The issue is not how hard they shall work or how much they shall get, but whether they shall work as they choose or as they are told.

​E.H. Phelps Brown, The Economics of Labour (1962) p. 10
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Of course, we don't see many individualists like that around these days. They are virtually extinct, and those who still exist have gone underground so you don’t tend to see them out and about. 

That's because the modern workplace is built on the ethos of community and collective effort. We are all to understand ourselves as one big happy family, or at least one big unified team all working together towards the same goal. In theory each employer gathers all his workers to his bosom, like the shepherd gathers his sheep, to be kept safe and looked after in a modern climate-controlled barn that is compliant with the regulations issued by the health and safety executive. Not like the unsophisticated sheep of long ago who used to be set free to roam the hillsides in all weathers, foraging for themselves and generally living a happy but precarious life.

Working conditions have in theory become softer and easier in the modern dispensation. In return for being looked after so well, all the workers pledge their allegiance to one corporate employer for life, and retire with a handsome pension after several decades of loyal service.

Ride-Sharing Apps

All this talk of men being free to spend their working hours at their own discretion brings us to the subject of Uber. Today things are very different from the 'master and servant' era, thank goodness. Men no longer have to make stark choices. [Editor: actually, lots of women drive for Uber while the kids are at school. It's called multitasking]. Life today is much easier and fairer. We now live in a more civilized age where we have rights for workers granted by a legal system that allows us to have our cake and eat it. We are able to exercise our own discretion at work, determine our own working hours, go on paid holidays at a time of our convenience, etc and also be entitled to a guaranteed wage or salary from the employer.

Any employer who doesn't get that gets constantly tied up in litigation. I think Uber has been in court since pretty much the first day they put a taxi on the road. That's how much the law has encroached upon commercial life. you expect the world to work according to that blueprint then it's clear that the gig economy is going to be hugely beffudling. The folks behind Uber and such firms may be driven by many different incentives, but community spirit is not recognisably one of them. They are more like the 'riotous speculators'  of the Wild West - who knows what is going to happen next, with their 'driver partners' and driverless cars? It could all go horribly wrong. It's a hugely risky enterprise.

Coming from a modern context where security, risk-avoidance, and being looked after by the employer is a basic human right, every person who turns up and volunteers to drive taxis for Uber expects to become part of the great Uber family. Only to discover that in the gig economy, it is each man for himself, and devil take the hindmost. It's almost like the Wild West.

​The gig economy can be defined as a way of working that is based on people having temporary jobs or doing separate pieces of work, each paid separately, rather than working for an employer.

This research is particularly focused on gig economy participants who trade their time and skills through online platforms (websites or apps), providing a service to a third party as a form of paid employment.

'To gig or not to gig? Stories from the modern economy' CIPD Survey Report, March 2017

Within that framework, it's clear that Uber is not really interested in looking after people. They view their relationship with the drivers as a trade or exchange that allows them to provide an efficient and profitable taxi service. No trace of community spirit there. In public everybody shames them for being selfish capitalists exploiting the workers and pledges to boycott them, but in private people love booking taxis on the Uber app.

Uber and the others fronting the gig economy are creating opportunities in the marketplace for others to get stuck into some work and earn a bob or two, which might be especially valuable for those already hampered by limited job prospects. Take the case of Cody in this story: ​

​For others, driving offers a solution to a lack of other job opportunities, especially for those who have a criminal record or limited education.

Cody, who is in his mid-20s, is a Lyft driver in the Ann Arbor-Detroit, Michigan area. He told me that he’s not eligible for good jobs with only a high school education. “There’s not a lot of jobs unless you’re looking at working in a factory for 80 hours a week.” The Pew survey found that one in five respondents said they used these digital platform because job opportunities in their area were limited.

Alex Rosenblat, ‘What Motivates Gig Economy Workers’ Harvard Business Review, November 17, 2016.
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​That’s all well and good for Cody, but the in the meantime passengers don't want to imagine that there will be a tendency for their drivers to be people whose only other option was factory work or who have a criminal record or criminal tendencies.

Uber drivers are accused of sexually assaulting or raping customers almost three times a month, according to new figures which have outraged rape campaigners.

The figure represents more than a fifth of all claims against taxi and car-hire drivers filed to 14 UK police forces last year, which totalled at 154 allegations including attacks in minicabs and chauffeur vehicles.

Meanwhile in the US, a succession of sexual assault claims against Uber drivers has damaged the company’s reputation of being "the safest ride on the road".

In a statement Uber’s spokesman said: “All drivers who use the Uber app in London are fully licensed by Transport for London and have undergone exactly the same enhanced DBS checks as black cab drivers, teachers and care workers.

“We take any allegations of this nature very seriously - we work closely with the police on their inquiries and prevent drivers from using the app while investigations take place

​“Our GPS technology also means that every trip - more than one million in London each week - is electronically recorded." 

The Independent, 19 May 2016.

Clearly this debate would unfold differently if these drivers were employees of Uber. Presumably Uber would pay a little bit more attention to whom they hired? They would require a high school certificate, degree certificate, and references from three previous employers at the very least, in order to present the public with the sort of driver they expect.

With these expectations, it's plain to see where Uber went wrong. The fundamental mistake Uber made was to embrace an old-fashioned and indeed extinct idea about creating opportunities for individuals like Cody to take advantage of, should they wish to do so. 

A win for secure employment is a loss for folks like Cody. This mixed picture was reflected by the parliamentary Select Committee Inquiry on self-employment and the gig economy, which observed in its May 2017 report that self-reliance might be ok but being looked after by your employer is much better:

Self-employment is neither inherently good nor bad. It can represent entrepreneurial zeal and a highly desirable culture of self-reliance. It can also be deeply negative, allowing companies to evade responsibility for their workers’ wellbeing and increase their profits. It is incumbent on Government to close loopholes that incentivise this behaviour.

Parliamentary Select Committee Inquiry
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The individualist of long ago needed to create his own life and take full personal responsibility for his own wellbeing, but today the law tries in vain to offer a ready-made protection for all members of society based on the right to be looked after by the employer.

You can drive taxis for Uber on your own terms and be completely free to set your own working hours, location, etc. If you wake up one morning and don’t fancy going to work, that’s fine, Uber can’t make you go to work if you don’t want to. They can't fire you, because you are your own boss. At the same time, you are entitled to a guaranteed wage, paid holidays, pension rights, etc, that must be supplied by Uber and if Uber decides they're done with you then yes, you can sue them for unfair dismissal. It makes perfect sense: you can quit at will but they can't fire you at will.
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Epic legal battles are fought in this terrain and in the political realm everyone is fighting for 'economic equality' meaning the right to force people with more money to share nicely with those who have less money so that it's fair. This is very clear from the May 2017 Select Committee Report on self-employment and the gig economy:

​Box 4: Examples of court cases and outcomes

​In October 2016, a tribunal ruled that two “test claimant” Uber drivers should be considered “workers”, not self-employed. The judgement referred to the “absurdity” of Uber’s proposition that the company’s role was limited to providing a platform for drivers to connect with customers. It stated this was “a pure fiction which bears no relation to the real dealings and relationships between the parties”. Accordingly, the judgement continued, “it is not real to regard Uber as working ‘for’ the drivers [ … ] the only sensible interpretation is that the relationship is the other way around”.

In January 2016, courts found in favour of Margaret Dewhurst, a self-employed courier for CitySprint, whose case centred on whether she could be considered a worker. The judge criticised CitySprint’s description of their self-employed courier model as “window dressing”. She found Ms. Dewhurst’s description of her working conditions more accurate than that provided by the company, concluding that she was “one courier working personally for one organisation at any one time and that any concept of her operating as a [self-employed] business is a sham”.

​In February 2017, courts ruled that a plumber engaged on a self-employed basis by Pimlico Plumbers should be entitled to worker status. The plumber was not an employee because he was neither guaranteed work, nor obliged to accept it, and he also had some control over how he carried work out: for example, he could charge a mark-up on materials that he obtained and used on a job. He was, however, subject to a range of controls through the company: he had to wear a uniform, be available for work full-time, and conform to rules and standards. This was judged to be consistent with worker status.​

Sources: Aslam, Farrar and Others v. Uber; Dewhurst v. CitySprint; Smith v. Pimlico Plumbers
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The gig economy is scary because it reminds us, in new ways, of an age that we have tried so hard to move beyond. Reality strikes us right between the eyes with a harsh reminder that in life there is no opt-out from the challenges of being an individual able to stand on your own two feet. In the new economy, we are all gig workers.