One of the underappreciated benefits of the internet is that it is continually forcing us to relearn the lessons of the past. Take publishing, for instance. In the early days of blogging, there was a sense, shared by many, that online publishing systems were serving to “liberate” writers from editors and proofreaders and fact-checkers and all the other folks who had long stood between the scribbler and the printed page. The internet, it was said, had revealed these people to be useless interlopers — gatekeepers, even. They were the human faces of friction, relics of an inefficient, oppressive atom-based past.
Forgotten in all the enthusiasm was the reason editorial staffs had come into being in the first place. Early publishers didn’t hire a bunch of useless workers just for the joy of paying them wages. No, publishers realized that people prefer reading good prose to crappy prose. And what we’ve learned is that people still prefer reading good prose to crappy prose — even when they get the prose for free. So we still have editorial staffs, and thank goodness for that.
Which brings me to Uber and all the other online labor markets that, as Christopher Mims writes in the Wall Street Journal, “are remarkably efficient machines for producing near minimum-wage jobs.” The enormous valuations that venture capitalists and other investors are now giving to the Ubers of the world reflect an assumption that the clearinghouses, or “platforms,” will continue to wield almost absolute power over the masses of individual laborers who do the driving and other work that the companies dole out. Easily replaceable, the individual worker has little choice but to accept the platform’s terms. Which means that, as Uber’s recent pricing actions suggest, the platforms will face little resistance in ratcheting up their share of the take.
Mims suggests that Uber drivers, and other such contractors, will ultimately have to rely on the government to protect their interests:
The only way forward is something that has gotten far too little attention, called “dependent contractors.” In contrast with independent contractors, dependent contractors work for a single firm with considerable control over their work — as in, Lyft or Uber or Postmates or Instacart or any of a hundred other companies like them. This category doesn’t exist in current U.S. law, but it does exist in countries like Germany, where dependent contractors get more protections than freelancers but are still distinct from full-time employees.
That may well be a good idea, but history tells us that it’s far from the only way forward. Following the example of factory workers — as well as early taxi drivers, or “hackmen” — a century ago, the contractors could stop acting as individuals and start acting collectively. Some form of unionization is not just another way forward, it could, for the workers, be a much more empowering way forward. I realize this may sound far-fetched at the moment. Labor unions aren’t exactly at the height of their popularity these days. And it’s true that many of the platform-dependent contractors are content with the current market arrangement — indeed, grateful for the new opportunities it’s given them to make a buck. Many drivers see Uber as their ally, their friend. But, as history also tells us, such attitudes can change quickly. There’s a latent economic antagonism between the workers and the clearinghouses, and as the clearinghouses wield their power to take an ever greater slice of the pie, in order to deliver the returns expected by their investors, the antagonism seems likely to burst into the open. Workers are content until the moment they feel cheated.
Clearinghouses like Uber may actually turn out to be the model for a new, digital form of labor union. Rather than relying on collective bargaining, these new unions would displace the third-party clearinghouses by taking over their role in the market. Think about it. The drivers join together and agree to contribute a small percentage of their fares — much smaller than the fees Uber extracts — as union dues, and the pooled cash is used to build and run their own, jointly owned ride-sharing platform. As the current plethora of such clearinghouses — the Uber of wiping smudges off eyeglasses! the Airbnb of caskets! — makes clear, setting up such platforms is, as a technical matter, pretty straightforward at this point, and once set up, they operate with great efficiency. By cutting out the Uber middleman, the drivers would not only keep more of their earnings; they’d also reap benefits of scale in establishing insurance plans, retirement accounts, and the other sorts of worker benefits that unions basically invented.
I’ve even come up with a cool term to describe this system of worker-owned clearinghouses. I call it the sharing economy.