The Gig Economy

In my view though, the gig economy is just not sustainable. Look at sites like 99 Designs... You have an incredibly large workforce with an incredibly large spread of skills doing a lot of work for marginal payout. As these populous-run services become more common, it will only dilute the value pool for those in it... If you have thousands of people saying they can do something for a fair or cheap price, it only reduces the ability of the next worker to charge more, despite the fact they might have better skills. Price wins over quality 99% of the time, in my experience.

It's crazy because the competition is pretty much 100% internal and at some point, internal competition of anything will lead to systemic destruction of something critical if there is no authority figure demanding internal combat needs to stop.

And let's face it, a company like Uber or Airbnb will never tell its participants that they can't drive more often or share more rooms because that will limit their product offering. Also, the government won't, can't, and shouldn't interfere either.

It will solely rely for the workers of these sites to form unions agreeing upon their own quality standards and reflective pricing and will act as a group against the interests of the corporation they are inherently the product for... But pardon me for my cynicism, we're not at the point yet were self-preservation supersedes the desire for just a fractionally larger income.

Those of us who "bristle" think that it's absolute nonsense that free adults should be prevented from engaging in a mutually beneficial transaction because the government is concerned with protecting one of them. Treating Uber drivers or AirBnB property owners as if they are the characters in an Upton Sinclair novel is a tough sell. Let me rephrase the argument from the left: "we mandated all of these great things for employees, but it increased the cost of employment, and workers and employers started voluntarily opting out. This is a problem because it threatens our original premise, that everyone will be better off if we regulate employment." Finally, Hillary's hedged, "sophisticated" view is basically that she wants credit for protecting workers but none of the blame when the citizens of progressive-leaning cities get Uber taken away. Even if you're a likely supporter, you shouldn't let her get away with it until she tells us what sort of proposals she imagines would avoid the trade-off and magically allow these markets to flourish while also "protecting workers."

Most taxi drivers in the USA are also 'independent contractors'. Tomato tomatoe?

You're right that these companies could lose steam and this shift could never come. On the other hand, the macroeconomic stats could change incredibly quickly since these companies are growing exponentially. E.g. if a company is doubling every year, then by the end of 2017 they'll have 8x more freelance workers than they did at the end of 2014, 16x more in 2018, and so on.

Based on how big of a change this could be it seems worth at least starting the discussion now rather than after the shift has already happened and there are millions of people without the protections they need.

Also, with the Uber example in particular, they have their sights set on disrupting car ownership, not just the taxi industry. So there's a chance it will be a huge net shift.

Those predictions are based on the growth of contingent work. Self-employment is just one of the 6 classifications within contingent work.

Yeah, that probably won't happen. There is simply too much political opposition to the idea of basic income in the US.

There is no need for suspecting "...that as years go by the salaries will go lower as the gig-economy becomes standard." There is empirical evidence today anywhere you care to analyze freelancing results. I'm loathe to admit this as I used to think the "free agent economy" was the way to go, but I have to face the cumulative evidence over the past several decades.

Mainstreaming the freelance economy will be disastrous for median incomes, and further concentrate power because the majority of freelancers have little to no leverage. That is because by definition, the majority of freelancers fall somewhere close to some average metric (whatever objective/subjective measure is chosen by the buyer). That average is commoditized through many different means (the primary channel of delivering that commoditization being the purchasing/procurement department), and then the individual members of the average are pitted against each other. Everyone wants to think they are the special snowflake that will beat the averages, but by definition only a top 10-40% (depending upon a variety of factors) can beat the numbers.

My personal rule of thumb to staying a free agent for over the past ten years is assiduously put in the deliberate practice for 10K+ hours on a running 5-year basis constantly learning and applying new fields/skills/concepts, and successfully sell that (the key part many fall down upon). This is alongside the work you do to put bread on the table. My other rule of thumb is the moment you are negotiating a proposed gig's technical deliverables through the purchasing/procurement bureaucracy instead of the business unit that will realize the benefits of the gig, you are losing large chunks of your agency to their buying process that acts as a highly lossy compression algorithm, if you haven't lost it all already by that point.

> In these conditions how can workers, government & businesses collaborate to provide better working conditions for those involved?

Solid safety net. Universal/single payer healthcare. A living minimum wage. Social support when you're unable to assemble enough income to survive (its been proven that its cheaper to give the homeless housing than to pay for the resulting issues of not providing housing).

Commoditization certainly will force incomes down. This has already happened in the arts, where most work is inherently project-based. The more accessible technology has become, the more people have been asked to work for free, because there's a perception that computers have made it all so easy, and more to the point, the ubiquity of computers means that specialist skills no longer seem exotic because they don't require the same sort of specialist equipment that they used to.

The freedom and flexibility is nice, but gigging as a lifestyle can often feel like even more of a rat race because there's no concept of job security, and also because there's a flattening effect so that you have a small number of managers, a larger number of technicians, and a lot of workers. That means promotion and career advancement become heavily tiered. So if you drive for a ride-sharing service and want to get ahead in life, your choices are to drive every waking hour to get money or study programming or management in hopes of getting an entry level job in the company that operates the ride-sharing platform, where your time and dedication as a drive will be considered worthless, if not an active barrier to hiring. I predict that that while we will see flatter hierarchies than in the stereotypical 20th century organization, there'll be a re-emergence of Victorian-style class divisions, because management will be in no hurry to admit the most skilled servants to their ranks.

Unionization of skilled workers..?

Stop tying health insurance to employment. One way or another, the tax loophole for health insurance needs to go away. This benefits both the salaried worker (easier to switch jobs and get a raise) and the freelance worker (doesn't have to unfairly pay higher rates).

Doesn't Uber ban you if you don't accept almost all fares?

The problem with this models is that you're not really an independent contractor - you're simply on-demand casual labour.

The Internet element makes it unnecessary to stand outside the factory gates every morning, which is certainly a benefit.

But all the obligations remain one way. You have to accept the work, but if you decide to take time out you can be "fired" from the system without notice, at will, at random, and with zero come-back against the "employer."

But if you want to work at hours convenient to you, then you probably won't make much money.

Most people aren't out driving people to the airport at 5am for the fun of it. For people who drive Uber as a primary source of income, sure there's some notional freedom. But in practical terms, there are times that you can productively work at and times that you can't.

Same thing goes for PostMates.

Except, as has been shown time and again, people who take advantage of that flexibility end up being punished, making the flexibility not really flexible. Uber, for instance, will stop offering you gigs if you turn too many down, or don't drive often enough during peak hours.

Albert has a lot of good philosophical discussions in this area. his blog archives are worth a scan

Seriously, if any of the current crop of gig companies becomes too evil (and Uber has definitely proven themselves in that camp on a frequent basis) you are always able to use a competitor, work for one, or found one. Until the regulations happen that will inevitably prevent you from competing (which is basically every established industry today which is why the sharing economy is necessary to survive for so many) there is a critical threshold airbnb / uber / etsy cannot cross where their workers will jump ship at the opportunity cost of losing these companies huge viewships / audiences because the alternative becomes better, period. Yes, it means that the more popular the platform is the more the company can screw over its employees and customers because of mindshare. That happens in every industry, though.

As an aside for the subject of women drivers... last fall, I had a Muslim woman as my Uber driver for a ride. She said that she makes a point of picking up female passengers with less than five-star ratings. She thinks a lot of male Uber drivers will downrate female passengers in unfair ways, and a lot of Uber drivers in general won't give rides to passengers who have had bad ratings.

> they'll be the world's largest employer

Even Uber cheerleaders get it mixed up from time to time

"assuming that somehow Uber pulled that off and they'll be the world's largest employer in less than a decade"

LOL, I thought Uber was trying NOT to be classified as an employer with respect to their drivers.

Even if they hired close to that many women, the announcement seems to be more of a stunt for positive publicity than anything, their drivers lack all of the basic protections and benefits that many public school teachers receive.

In reality, the political clout of the "Public School Teachers" is much less than the total 2.7m members since they're made up of many different unions. As opposed to Walmart, which is a single company that has much more power over their control of the workplace and employees. Right now it seems that Uber has even more clout over their drivers than Walmart has over their employees.

"It's amazing that politicians seem so slow on the up-take here and the opportunity to address the people that are caught in the machinery of the sharing economy."

Yea, I think this sharing economy caught some of my politicians off guard. After 2008, they just wanted any job creation. I don't think most of them realized how technology works, or it is just a fad?

I'm a fan of this sharing economy, but I am not a fan of exploiting naive/desperate people. I am for protections on this sharing economy. I was very happy when Uber was called out by their cute claim of Independent Contractors status.

I think most politicians, who care, recall a America where people had good jobs? Those days are probably gone? I think politicians, who care about the poor, and middle class, know the party is over? They see how divided the world has become, and at least here--want to soften the blow? Meaning they want to regulate(minimum wage, working conditions, etc.) companies that exploit desperate/naive workers.

I am glad Wallmart finally raised wages in some localities though.

The "major reason" is if you can just ignore various labor laws it's cheaper to operate but for some reason everyone jumps to "well then we should just make what Uber and co. are already doing legal!" instead of considering enforcement.

You can't set your own rate with uber. There are also penalty's for rejecting to much work.