Innovation and the gig economy

​In the latest round of talks between Uber and its unhappy drivers, which are currently being conducted under the aegis of the Employment Appeal Tribunal, Uber is reduced to arguing that it has done nothing new, nothing innovative, nothing exciting, let alone revolutionary. The nature of their defence is: we deny that there is any such thing as the gig economy, or if there is, we deny that we are part of it. This is sort of like the defence Roark offered in The Fountainhead, except the exact opposite. Instead of defending your right to create and invent, you deny that there is such a thing going on.

​Uber stands charged with being a notorious participant in the gig economy; it has disrupted and reshaped the industry by designing the greatest advances in transportation, thus offering customers a superior and more cost effective service, and creating opportunities for millions of people in many cities and countries to earn a bit of money by driving others to where they need to go. These are serious charges, I'm sure you'll agree. If Uber is found guilty they'll have to pay a staggering penalty that will go down in history and may well be the end of the gig economy model.

If saddled with those costs [payroll taxes, workers' compensation insurance, health care, minimum wage, overtime, and the reimbursement of business-related expenses], the on-demand business model might not survive, at least not in its current form.

B. Means and J.A. Seiner, 'Navigating the Uber Economy' (2016) 49 University of California, Davis, 1511, 1514.

So, of course, the obvious thing for Uber to do is deny being an innovator or creator. While Roark risked nothing more serious than prison if he was found guilty, Uber risks being made to single-handedly fund the entire welfare state in every country in which it operates.

In round one of the UK talks, at the Employment Tribunal, Uber did try to argue that actually, progress is a good thing and most of its drivers were really happy. The tribunal was not persuaded, and had only harsh words for Uber and its army of tricksy lawyers who twisted words to make the drivers look like 'partners' in the whole nefarious money-making enterprise, while everybody knows that the drivers are not partners but vulnerable people who were forced (forced!) to work for Uber on pain of death. For their hard graft driving people around in climate-controlled cars with adjustable leather bucket seats, they earn pittance wages which just add insult to injury. It's like the bad old days when men used to have to go underground in wire cages and hew coal out of the rock with hand-held tools, only much worse.

To make matters even worse, it seems that many of the unhappy drivers can't read English so they couldn't reasonably be expected to read the contracts that Uber forced them to sign (forced!) or, if they read them, they couldn't be expected to understand the meaning of what they were agreeing to. So the drivers are doubly to be pitied. First, life cast them at the bottom of the heap and then, Uber came along and exploited them. Such bad luck. I'm sure the courts will try to rustle up some compensation for them, which Uber can pay because they have plenty of money: dirty money earned through capitalist greed and the shameless exploitation of workers.  

At the current appeal stage Uber is still fighting, but has abandoned the 'most of our drivers are happy' line of argument and decided to deny the charges altogether.

It seems that being a dynamic and creative company, or worse still being innovative, is unfortunately associated with being wicked and exploitative and that’s why these firms all have to die a swift death. Unless, that is, they can prove that they have done nothing innovative.

Dinah Rose QC, representing Uber, told the tribunal there was a tendency to "lump" the firm in with the so-called gig economy and for people to assume it was a "wicked" company that exploited workers.

Nobody wants to be labelled wicked and exploitative. Therefore it is quite understandable that Uber now wants to distance itself from the gig economy. They are trying very hard to persuade the Employment Appeal Tribunal that Uber is really just a boring old bog standard taxi firm, except that maybe their telephone system might possibly be a bit fancier than the clunky phones you’d find at an old-style taxi firm but that's nothing to get all het up about.

​Uber is not part of the so-called "gig economy" and operates a similar business model to local taxi firms, an Employment Appeals Tribunal has heard.

Ok then, although in other news Uber is being feted as a market leader in the on-demand transport economy based on its brave new business model.​

​The largest category of on-demand spending is online marketplaces (e.g. Ebay, Etsy), with 16.3 million consumers each month spending almost $36 billion annually. Transportation (e.g. Uber, Lyft) comes in second with 7.3 million monthly consumers and $5.6 billion in annual spending, followed by food/grocery delivery (e.g. Instacart) at 5.5 million monthly consumers and $4.6 billion annual spending. Other on-demand services including home services (e.g. TaskRabbit), freelancer services (e.g. Elance), and health and beauty services (e.g. StyleSeat) account for $8.1 billion in spending each year, and all other on-demand activity comes in at $3.8 billion.
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It's like parallel worlds: Uber is making waves out in the real world but down in the trenches of the Employment Tribunal it is reduced to denying that it has done anything innovative.
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