commoditized workers
TRANSCRIPT
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4th Conference of the Regulating for Decent Work Network International Labour Office | Geneva, Switzerland | 8-10 July 2015
Commoditized Workers The Rising of On-Demand Work a Case Study Research on a Set of Online Platforms and Apps
Antonio Aloisi, Bocconi University
Agenda
n Sharing is the new renting
n The matching between labour demand and supply n Causes of the on-going paradigm
shift
n From ownership to membership
n Crowd-Work n “Employing humans-as-a-service”
n Reputation and internal ranking
n Insecurity, the price for flexibility
n How to dismantle an atomized market n Professionalization
n “Contingent handyman” 1. Amazon Mechanical Turk 2. Uber
n Conclusions
+All we need is sharing
n These schemes may enlarge opportunities for people willing to find a job or to top up their salaries
n These platforms may also be used to circumvent employment regulation, by operating informally in traditionally regulated markets
n Companies are skyrocketing their profits thanks to the use of new technologies that allow cutting transaction costs by outsourcing
n Global trend towards the decentralization of structures and facilities as well as the creation of dense and dispersed production networks: n “sharing” assets so affordable and accessible.
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trend towards globalization
enabling role of technologies
the spread of broadband
ubiquitous communications
user-friendly software and
interfaces
+From ownership to membership
n “Invisible infrastructure” connects supply and demand of services and facilitate interaction between individuals and firms n «Coming up with asolid definition of the sharing economy that reflects common usage is nearly impossible. There is great diversity among
activities as well as baffling boundaries drawn by participants. TaskRabbit, an “errands” site, is often included, but Mechanical Turk (Amazon’s online labor market) could not. Airbnb is practically synonymous with the sharing economy, but traditional bed and breakfasts are left out. Lyft, a ride service company, claims to be in, but Uber does not.
n When I posed these questions to a few sharing innovators, they were pragmatic, rather than analytical» [Juliet Schor, Debating the Sharing Economy, 2014]
n Benefits: n UberX fees are, at least in principle, competitive with those of conventional taxi cooperatives,
n Airbnb landlords provide comfortable and low-cost housing solutions if compared to those offered by big hotel chains.
n “Routine parts of knowledge work can be parcelled out to individuals”
à it is like technology had “exploit[ed] the knowledge of enthusiasts”
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+Social implications
n Facing a digital version of Taylorism, i.e. the efficient exploitation (or expropriation) of work at the detriment of education and skill development of workers
n Websites like TaskRabbit, Elance, Lift, Handy (“commodities market” vs “knowledge economy”) threaten to dismantle traditional labour mkts as they do not seem to ensure a fair protection of workers’ rights
n This new configuration implies wages fixed by a dynamic calculation of supply and demand, and every worker’s act constantly traced, appraised and “subject to the sometimes harsh light of customer satisfaction”
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+“Employing humans-as-a-service”
n According to Alek Felstiner, “crowdworking”: n “the act of taking a job traditionally performed by a designated agent
(usually an employee) and outsourcing it to an undefined,
generally large group of people in the form of an open call”
n These tools have the potential to “chop up” a broad array of traditional jobs into detached tasks that can be allocated to workers just when they are needed à on-demand economy
n The legal issue: workers of the on-demand economy continue to be independent contractors (not employees, in a word) even though many indicators reveal a disguised employment relationship (disproportionate presence of vulnerable players)
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+“Contingent handyman”
n At the time of registration (“sign in”) the user needs to be aware to be part of a contract that creates a so pervasive system that can be considered akin to an independent institution aimed at maximizing profits through tools such as processes design that reduces up to exclude the likelihood of disputes.
n “Click-wrap agreements” (or “click-through agreements”), binding guidelines which define a completely autonomous legal system. Used to disclaim warranties, restrict liability, indicate the applicable law and forum for dispute resolution; entering the website user can only…
þ “I accept” à in the long run, a race to the bottom?
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+Reputation and internal ranking
n «While we totally distrust strangers, we totally trust people – significantly more
than we trust corporations or governments»
n Reputation has a prominent role: all these exchanges involve an ex post evaluation that affects the ex ante selection
n The selection process is orientated by the internal ranking, entailing moral hazard or determining a struggling in order to be recruited in the future
n The online platform keeps for itself, on average, 15% of the fee as commission and excludes all liabilities, in this way limiting its role to the activity of intermediary
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+Professionalization
n Until recently, crowd-working has been like “hiring a neighbourhood teen to mow your lawn twice a summer, but on a grand and global scale” à
n “The sharing economy is becoming professionalized”, with 2 outcomes:
n Dozens of such firms have been established and announced to be the “Uber or Airbnb of X” (“X” = any good or service).
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the “sharers” (one who enjoys an on-
demand system) become factual workers;
platforms become intermediaries (“middlemen”) in charge of developing the network of connections and overseeing the
property of transactions.
+ Insecurity, the price for flexibility
n Uberizing probably means “trapping” a set of innovative procedures – geo-location, payments and driver management and distribution – into an “app-accessible service” or a “sweatshop”, with lower entry barriers since people monetize resources they already own
n Being full-time employed by a corporation or government agency could probably be the exception rather than the rule. New actors make the social-economic scene: independent contractors, freelancers, unconventional workers and micro-entrepreneurs [acceleration]
n Where to find new sources for essential worker protection measures like health coverage, insurance against injuries, paid vacations… n The “insecurity” (i.e. the erosion) of this kind of rights results
in a potential dismal quality of social services rendered
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n In some sense one should not underestimate the importance of social media in creating a “sense of community” (or a “fantasy of community in an atomized population”): n all these platforms use gadgets, instant marketing, and partnerships in order to
engage people and get them involved towards these challenges between “old/boring/institutionalized” and “new/amazing/entrepreneurial”
n Just think of Lyft and to its logo: pink moustaches. “a brand identity and emblematize the touchy-feely spirit that Lyft has adopted
as its credo. Drivers bump fists with their passengers at the end of each ride”.
n Lyft drivers ask passengers to sit in the front “a more human vision for the service industry”.
n It is not for us to establish whether the idea is sincere or instrumental, but it seems to be effectual.
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A sense of community
+Organizing
n Workers will gather in communities where it is feasible to exchange knowledge and tricks. n The blog “Ride share guy” provides guidance and instructions to drivers
on maximizing their income from the diverse car sharing marketplaces.
n “Peers.org” could be considered a “power-organizer”;
n a system of pooling many accounts into one, organizing, caring, supporting participants in the sharing economy, both its freelance population
n Guilds like “Peers.org” and “Freelancers Union” are starting to engage in a struggle aimed at pooling bargaining power, in order to let independent contractors access promotional health insurance
n Platform “cooperativism” = new forms of solidarity aimed at fighting for better conditions for “cloud workers” and vulnerable workforce.
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n MTurk was started on November 2, 2005.
n “AMT is almost certainly the largest crowdsourcing platform on the web, and
has become the first stop for many individuals and firms seeking cheap, on-
demand crowd labor”
n The platform allows the accomplishment of tasks amenable to being sent down a wire through APIs (i.e. Application Programming Interface).
n Amazon’s founder and CEO Jeff Bezos personally followed the project, n From the very beginning, this creature was treated as the spearhead of Amazon’s ventures,
n Named after an eighteen-century mechanical wooden device man shaped, adorned with a turban, that could compete against human players at the game of chess (a dwarf was hidden and moved pawns from inside, so no technology at all). Maria Theresa, the sovereign of Austria, was told it was the first “robot” ever built.
Amazon Mechanical Turk The picture
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n Around 500,000 “Turkers” (the internal definition for crowd-workers) populate the Mechanical Turk land n from 100 countries around the world, with a strong prevalence:
n of Americans [57%]
n Indians [32%], paid in rupees since 2007; n millions more fill up contender platforms like CrowdFlower, Clickworker,
CloudCrowd and a heap of smaller ones. Requesters range from multinationals to family firms and start-ups.
n The heterogeneity of Turkers is evident: “[they] are highly educated office
workers with downtime, disabled persons or caretakers who are housebound, or
felons passed over by more traditional employers”
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Amazon Mechanical Turk Demography
+Amazon Mechanical Turk Human Intelligence Tasks
n «It's actual humans doing stuff to the Internet that you think is automatic» + «You put some input in and you get back a result»
n These people are the “scaffolding” behind the Internet; their activities allow to kick start something online that everybody takes for granted
n One example of this is the case of a worker that completes HITs belonging to a work he would never have done if he had known it in its entirety (weapons design or spamming, for example).
n “Disembodied HITs can deprive people of the chance to make judgements about the moral valence of their work”
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n Some workers handle tasks that are still too intricate for automation. In many cases, computers are still not able to achieve certain results – or they are not reliable as humans – or they “do not want to”. n from copying texts to translation,
n from identifying spelling errors to processing raw data, n from participating in some experiments to grouping items and labelling them,
n from hunting for email addresses to data transcription, n “detecting a positive or negative bias in an article, n recognizing irony,
n accurately reading the text off a photograph of a building, n determining if something is NSFW (not safe for work) n discerning among ambiguous search results (…)”
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Amazon Mechanical Turk Activities
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n The terms of use postulate that Turkers are independent contractors
n Providers are not “entitled to any of the benefits that a Requester or AMT
may make available to its employees, such as vacation pay, sick leave, insurance
programs, including group health insurance or retirement benefits”.
n Workers and Requesters are at the mercy of this agreement they have to accept if they want to enter MTurk’s dashboard.
n The mechanism also prevents parties from contracting freely outside the platform eventually shrinking their contractual freedom
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Amazon Mechanical Turk Building a marketplace
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n Amazon Mechanical Turk provides a venue for third-party Requesters and third-party
Providers to enter into and complete transactions. Amazon Mechanical Turk and its
Affiliates are not involved in the transactions between Requesters and Providers.
As a result, we have no control over the quality, safety or legality of the Services, the
ability of Providers to provide the Services to Requesters’ satisfaction, or the ability of
Requesters to pay for Services.
n We are not responsible for the actions of any Requester or Provider.
We do not conduct any screening or other verification with respect to Requesters or
Providers, nor do we provide any recommendations. As a Requester or a Provider, you
use the Site at your own risk.
n As a Provider you are performing Services for a Requester in your personal capacity as an
independent contractor and not as an employee of the Requester.
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Amazon Mechanical Turk AMT Participation Agmt.
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n It concerns “employees” covered by labour laws such as minimum wage and antidiscrimination statutes.
n Outdated? 1938 à Who was the U.S. President?
n The definition of employee, the only addressee of the regulation, offered by the FLSA is unfortunately narrow and perilously meaningless: “any individual employed by an employer”.
n AMT “label” is out of scope of any labour legislation covering employees: n the National Labor Relations Act (NLRA),
n Title VII of the Civil Rights Act and related anti-discrimination legislation,
n the Family Medical Leave Act (FMLA),
n the Occupational Safety and Health Act (OSHA),
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Amazon Mechanical Turk The FLSA (Fair Labor Standards Act)
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n In the U.S., as well as in many European countries (like Italy), labels placed by the parties are not dispositive at all.
n The classification imposed by terms of use could be deemed as incorrect.
n As a consequence “vendors will not necessarily insulate firms (or the
vendors themselves) from liability”
n Supreme Court:“[w]here the work done, in its essence, follows the usual
path of an employee, putting on an ‘independent contractor’ label does
not take the worker from the protection of the Act. 95”
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Amazon Mechanical Turk Labels are not dispositive
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n Whether a worker is an employee or a contractor depends on a “multifactorial” test based on the facts emerging from the employment relationship.
n the possibility of having free personal judgement and control over one’s own work,
n the way in which tasks are performed,
n the “economic realities” and the concrete dependency in relation with the employer,
n the permanency of the relationship,
n the number of working hours,
n the power of direction exercised by the employee,
n the freedom of managing its own time schedule,
n the ownership of equipment,
n the method of payment (hours vs project),
n the degree of flexibility and protections,
n the disparity of relative bargaining power.
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Amazon Mechanical Turk “Multifactorial” test
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n Turkopticon a potential source of worker organizing in virtue of class-consciousness “an activist system that allows workers to publicize and evaluate their relationships with employers”. n The website permits Turkers “to engage one another in mutual aid”..
n Researchers put a provocative task on the platform, asking workers to define an ideal “Workers’ Bill of Rights” from their point of view.
n Dynamo a community founded by scholars, which could be seen as the first step toward granting Turkers a collective voice.
n This trend deserves attention, as Providers are a platform’s fundamental economic inputs, for this reason alone they should be protected, though AMT can tolerate the loss of accounts that do not accept the system’s terms.
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Amazon Mechanical Turk An attempt to organize
+UberX (UberPop in EU) The picture
n Uber is the most renowned ridesharing company, an “obvious inspiration”
n Founded in 2009, it now operates in 53 countries and “had sales exceeding $1 billion in 2014 and a valuation of $40 billion”
n According to Brugel, it “is currently one of the fastest growing start-ups worldwide. In 2014 its estimated valuation reached 17 billion USD, up from 3.5 billion USD a year earlier”
n Thought for a population equipped with smartphones and used to pay with credit cards and through online bank account or PayPal account
n It could be also seen as a way of making urban mobility less congested, clearing roads from private vehicles and letting parking spots free.
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n The reduction in information asymmetries seems unmistakably evident, as ridesharing companies’ dependence on digital technology provides riders with a “better overview of quality and prices”. This leads to privacy concerns!
n Much worse is that it also leaves the field wide open for discrimination, since drivers could ignore requests if they don’t like a pick up place or a destination request. n Aversion towards taxis often represents the best advertising for ridesharing companies
n While the user has a potentially complete knowledge of drivers and fees (he can calculate estimated beforehand prices of the rides using an algorithm that measures the distance from the desired destination and potential traffic), the driver ignores completely characteristics of his costumer.
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UberX (UberPop in EU) Information asymmetries
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n After downloading the mobile app and creating a personal account, every user can request the nearest available Uber using a GPS to pinpoint the driver’s position.
n To become a driver “partner” one must complete Uber’s application process, providing its driver’s license information, as well as evidences about its vehicle’s registration and insurance.
n You do not need to prove special requirements (apart the age of legal majority)
n They do not necessarily have signed a business insurance.
n Aspiring drivers could be required to pass a “city knowledge test” + interview:
n On the contrary, critics object that drivers lack of appropriate training and experience of extensive driving. No one, for instance, seems to be concerned about checking drivers’ criminal background.
n Training à https://youtu.be/makYbqd7mGA
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UberX (UberPop in EU) How it works
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n Uber cannot be considered light-heartedly as a transport firm as “the company does not provide transportation services, and has no liability for services provided by third parties”, at least according to its terms and conditions.
n Conversely, it should not be regarded as a technological business since its revenues do not depend on the distribution of its interface, but on the amount of rides generated by drivers.
n The company maintains to be simply an arena, like an “eBays for gigs”. Uber works as a matching platform and gets revenues thanks to a 10-20% cut from each ride (tipping is forbidden).
n UberX is different: drivers are not contractors but private citizens in accordance with the motto “Everyone’s Private Driver”.
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UberX (UberPop in EU) How it works
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n The drivers’ behaviour has a direct impact on the rating according to which they will get the chance to be recruited again in future
n Riders con rate the ride, evaluations ranging from 1 to 5 stars. If the rate falls below a certain threshold, the driver could lose access to Uber application (Is account deactivation a new soft form of dismissal?)
n “Uber and Lyft are exercising employer-like control over termination decisions”
n Uber can also use the star ratings as a means of enforcing specific rules: for instance, cleanliness, beverage to be served, how to dress
n This system could lead to “frenetic self-marketing campaigning”:
the inexhaustible effort to please customers with “binding smiles” .
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UberX (UberPop in EU) Stars system
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n Drivers are supposed to be independent as for managing their time and deciding when turning their own car into a taxi – the operation consisting in being online or offline on the app. n Uber controls and supervises both the methods and means of its drivers’ provision of transportation services.
n Uber claims not to be a transportation carrier: n “The quality of the transportation services requested through the use of the APP or the Service is
entirely the responsibility of the Transportation Provider who ultimately provides such
transportation services to you. Uber under no circumstance accepts liability in connection with and/
or arising from the transportation services provided by the Transportation Provider or any acts,
actions, behaviour, conduct, and/or negligence on the part of the Transportation Provider.”.
n Many similar cases concerning Uber drivers have been recorded, from creepy sex text stalking to
kidnapping and allegedly raping a passenger to killing a young girl.
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UberX (UberPop in EU) Workers classification
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n Uber, but also Lyft and other ridesharing companies, are blamed for (mis)classifying their drivers as independent contractors.
n “The label placed by the parties is not dispositive, and subterfuges are not countenanced”
n Costs and risks associated with hiring employees are higher than those derived from employing independent contractors.
n In a class action lawsuit brought against Uber and pending in front of the California Federal Court, Uber drivers have sued the platforms alleging violations of the California Labor Code, and arguing that they are actually employees under California law although they were denied the relevant benefits and protections such as minimum wage, reimbursement for expenses, overtime...
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UberX (UberPop in EU) Workers (mis)classification
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n “At first glance, Lyft drivers don’t seem much like employees. We generally understand an employee to be someone who works under the direction of a supervisor, for an extended or indefinite period of
time, with fairly regular hours, receiving most or all his income from that one employer. Lyft drivers
can work as little or as much as they want, and can schedule their driving around their other activities.
(side activity, little extra income)
n But Lyft drivers don’t seem much like independent contractors either. We generally understand an independent contractor to be someone with a special skill (and with the bargaining power to negotiate
a rate for the use of that skill), who serves multiple clients, performing discrete tasks for limited periods,
while exercising great discretion over the way the work is actually done. Their work is central, not
tangential, to Lyft’s business. Lyft might not control when the drivers work, but it has a great deal of
power over how they actually do their work, including the power to fire them if they don’t meet Lyft’s specifications about how to give rides. And some Lyft drivers no doubt treat their work as a full-time
job—their livelihood may depend solely or primarily on weekly payments from Lyft
n Indeed, this type of Lyft driver looks very much like the kind of worker the
California Legislature has always intended to protect as an ‘employee’
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UberX (UberPop in EU) Judge Chhabria’s reasoning
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n A federal judge in San Francisco“Plaintiffs are Uber’s presumptive employees because they ‘perform services’ for the benefit of Uber”.
n The decision contains an enumeration of indicia of an employment
relationship like the presence of a “right to control work details” (in the light of the doctrine of respondeat superior: “not how much control a hirer exercises, but how much control the hirer retains the right to exercise”) or the fact that Uber “depends on its drivers’ performance of services for its revenues”. n The court rejects Uber’s self-definition as a mere “technology company”, since the argument is
too formalistic and omits an analysis of the substance of how Uber actually works.
n As for the “right to control” test, Uber’s “Driver Handbook” is clear and asks drivers to accept all ride requests, also rating their readiness and availability.
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UberX (UberPop in EU) Judge Borello’s reasoning
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n This multi-part test scrutinizes the presence of the following factors: I. whether there’s a right to control how the worker does his job;
II. whether a worker has set hours or can work whenever he or she wants;
III. how the worker is paid i.e., by the hour (which points toward employment) vs. by the
job (which points toward an independent contractor relationship;
IV. whether the business provides the tools to perform the job;
V. whether a written agreement exists classifying the worker as an independent
contractor or employee;
VI. the permanency of the relationship, with an indefinite term pointing toward
employment and a defined term pointing toward an independent contractor
arrangement;
VII. whether the work requires a special skill;
VIII. whether the services rendered are an integral part of the employer’s business.
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UberX (UberPop in EU) The multi-part test
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n “success is not based just on regulatory arbitrage”, suspects seem to have been validated in the labour law field
n In August, a group of drivers established the California App-based Drivers Association, a sort of Uber drivers union
n The same happened in Seattle and New York City...
n Threats of work stoppage are the order of the day. People want to join forces
n A feeling of dissatisfaction towards Uber employment – and price, too – models and unilateral changes in T&C.
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UberX (UberPop in EU) Strikes and protests
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n The “e-topia”, apparently driven by an altruistic spirit (like the Wikipedia example suggests), could eventually take the risk of turning into a social spirale descendant when risks traditionally borne by firms are being “pushed back” on to individuals à “precarious employment”
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Conclusions
Pro app
lawyer
Uber/ATM = little more than a marketmaker / a forum for buyers
and sellers
Pro worker
lawyer
Uber/ATM = exercise considerable control over workers
“The jury in this case will be handed a square peg and asked to choose between two round holes.”
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n The new fabric of the job market has rendered obsolete definitions and categories like employee or contractor. According to W. Liebman, “a third category is necessary”: the dependent contractor n The “independent contractor” formula privileges only the classic freelancer, who is a skilled professional, and
the “employee” one seems not to fit for the new modalities previously sketched out.
n Some on-demand firms will choose to classify their workers as employees à Instacart, a grocery delivery service, has invited some of its freelancers to become part-time employees.
n Provide a social safety net to people whose chosen form of work is something other than full-time employment. n Health coverage, insurance against workplace injuries, paid vacations and maternity leave: these have long
been universal entitlements in many economies. They should not become exclusive perks for a dwindling band of salaried employees (Arun Sundararajan)
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Conclusions
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ü Law-makers: dynamic potential of sharing forces cannot be hindered by strict and out-dated rules; regulations have to protect both users and workers ü Governments should recognize that the new peer-to-peer marketplaces have internal
controls; they have turned out to be even stricter and more sophisticated, even though “self-policing isn’t a universal panacea”
ü Platforms and apps: improve and humanize their model, building technology seamlessly in tandem with workers’ rights. ü Lyft has signed a partnership with Freelancers Union, offering possibility for its
drivers to enter the pressure group’s health plan and benefit plans.
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Conclusions Updating employment law
+Open-ended questions
n We should redefine the notion of employment. After all it is true that the transformations brought about by digital technology cannot replay drifts like exploitation and degraded human dignity of work.
n Encouraging a big cultural shift. Virtual does not mean exploitable. We need to offer better protection to what is behind the scenes of on-demand economy
n “Sharing” = “an equitable split in wealth and responsibility”
1. Tightening up international codes of good practice and make worldwide firms sign and respect them?
2. And what about stretching the plainness of worker classification?
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