The Gig Economy: A Rider’s Tale

Published by Anonymous (not verified) on Tue, 24/10/2017 - 10:56pm in

All we are given is a jacket and a black box. They had a look at my then death-trap of a bike, but weren’t too interested in my shoes or gloves. I was given a couple of training videos to watch, and that’s it. I’m my own boss. I have complete freedom.

It isn’t long before the reality of being on my own and the complete responsibility which goes with that, dawns on me.
A couple of nightmare shifts caused me to learn the job fast, delivering food to the right place is surprisingly difficult.

During my first cold spell when it rained, my hands and toes got so cold that I couldn’t feel them. My gloves and shoes were inadequate, which, we can say, was my fault. But most manual jobs ensure you have the right clothing, and continue to ensure it. They gave me a jacket, T-shirt and some lights in July 2016 when I started working for them, but since then no one has checked up on me. That’s just the nature of it: a real departure from traditional employment structures.

Then I got a puncture and lost 70 pounds while I fixed it. It occurred to me that I would be on my own as well if I had an accident and ended up paralysed hospital thinking ‘ok well that wasn’t worth it’. I decided not to think about that and instead tried to focus on my target of hitting 2-3 drops an hour. This would mean I’d get 10 pounds an hour – better than minimum wage.

The chances of maintaining this rate, however, were very unreliable. At times the system would go down, so I’d lose more money, although there was sometimes compensation. Very often I’d get delayed sitting in Nandos for 20 minutes, only to be sent to Moss Side to deliver a chicken sandwich to a shady looking fella. As I was cycling over there I couldn’t help thinking to myself ‘Thank god all I spend this money on is fresh herbs, plane tickets and alcohol.’

I can’t imagine doing this for a living or to support a family. I have no control over what I get paid. Deliveroo have now moved the system to a fixed fee per drop, (no more base rate) and in my experience, and those of fellow riders I’ve chatted to, the delivery distances are now around 2-3 times longer. We have to ride further and faster for the same money. We just had to suck this up. As a new mode of employment I can’t see this being more than a young buck thing for fairly trivial services. I wouldn’t want to have things like medical services delivered in this way.

While the instability and dangerousness of the job isn’t too great, I do like not being bossed around. Making my own decisions and not ‘surrendering to a private dictatorship on a daily basis’ does have some dignity. And many times I would thank the lord on high I wasn’t stuck in one restaurant. I was out on the road, with the fresh air and the sky, and the drivers who hated cyclists. I see a lot of Manchester with the job. I’ve had some great chats with the homeless and with my fellow riders and some great deals in the reduced sections of various supermarkets.
‘Saucy little tunes they got playing in there brother’, I once remarked to a manager having a fag outside a restaurant, once I’d picked up the order.
‘Try listening to them on a loop forty hours a week son, it’s a fxxking nightmare’. I couldn’t agree more.

I’ve outlined some personal impressions here, but how much is the gig economy likely to transform the jobs market?

According to research by the Mckinsey Global Institute, 20 to 30 percent of the working-age population in the USA and EU are independent workers, a growing trend that can’t be ignored. Everyone uses mobile devices now. This gives digital platforms access to vast pools of workers and customers and the necessary real-time information to make more efficient matches.

An independent review by Matthew Taylor, chief executive of the Royal Society of Arts, was published in July this year. The report looks at how the gig economy is changing working practices in the UK and how this affects the status of employees and self-employment. Reactions to the report and its recommendations have been very mixed.

Business groups support the two-way flexibility that the gig economy offers both employers and individuals. They praise the use of data analytics as a way of offering greater efficiency to labour markets, which will, in theory, help self-employed people choose when to work to best suit their lifestyle.

Trade Unions are generally appalled by the report, and disagree with the assumption that greater flexibility will improve workers’ lifestyles. Especially when the trend of forced self-employment sees one in six workers without sick pay, holiday pay, their basic rights and a pension. GMB General Secretary, Tim Roache, says that the exploitation of insecure workers is a deliberate and core part of company business models. “This isn’t a quirk of the system, this is the system – and without regulation this system will inevitably continue. Even good employers will be forced to adopt these practices in order to remain competitive.”

A report by Harvard Business Review, claims that those most likely to benefit from the gig economy are entrepreneurs and workers with specialized skills, expertise, or in-demand experience. Apparently the gig economy “rewards hustle” so those with the creative abilities to market themselves, rise to challenges and take advantage of the exciting new opportunities the gig economy can offer will be the winners.

According to HBR the biggest losers will be workers whose skills are common, commoditized, or less in demand. Workers with a passive, complacent employee mindset will become less secure in their jobs. This includes midlevel and low-level managers, executive assistants, and bookkeepers – jobs which are most likely to be automated, eliminated, contracted out, or outsourced to cheaper labour.

As it stands I think it is just a job for young people like me who don’t really need the money. I personally think a good measure would be that if the person making deliveries can themselves afford to buy a deliveroo then it’s fine.

Fact is, this a very new, very real trend that we are seeing and it’s not working for everyone. Even if I got good at it and managed to avoid hospital, I can’t see myself deliverooing as a long-term career and I feel sorry for anyone who faces that as a reality.

The post The Gig Economy: A Rider’s Tale appeared first on Post-Crash Economics Society.

How do you like them facts?

Published by Anonymous (not verified) on Tue, 12/09/2017 - 11:00pm in


Apologists for mainstream economics (such as Noah Smith) like to claim that things are OK because good empirical research is crowding out bad theory.

I have no doubt about the fact that the theory of mainstream economics has been bad. But is the empirical research any better?

Not, as I see it, in the academy, in the departments that are dominated by mainstream economics. But there is interesting empirical work going on elsewhere, including of all places in the International Monetary Fund (as I have noted before, e.g., here and here).

The latest, from Mai Dao, Mitali Das, Zsoka Koczan, and Weicheng Lian, documents two important facts: the decline in labor’s share of income—in both developed and developing economies—and the relationship between the fall in the labor share and the rise in inequality.

I demonstrate both facts for the United States in the chart above: the labor share (the red line, measured on the left) has been falling since 1970, while the share of income captured by those in the top 1 percent (the blue line, measured on the right) has been rising.

labor shares

Dao et al. make the same argument, both across countries and within countries over time: declining labor shares are associated with rising inequality.

And they’re clearly concerned about these facts, because inequality can fuel social tension and harm economic growth. It can also lead to a backlash against economic integration and outward-looking policies, which the IMF has a clear stake in defending:

the benefits of trade and financial integration to emerging market and developing economies—where they have fostered convergence, raised incomes, expanded access to goods and services, and lifted millions from poverty—are well documented.

But, of course, there are no facts without theories. What is missing from the IMF facts is a theory of how a falling labor share fuels inequality—and, in turn, has created such a reaction against capitalist globalization.

Let me see if I can help them. When the labor share of national income falls—the result of the forces Dao et al. document, such as outsourcing and new labor-saving technologies—the surplus appropriated from those workers rises. Then, when a share of that growing surplus is distributed to those at the top—for example, to those in the top 1 percent, via high salaries and returns on capital ownership—income inequality rises. Moreover, the ability of those at the top to capture the surplus means they are able to shape economic and political decisions that serve to keep workers’ share of national income on its downward slide.

The problem is mainstream economists are not particularly interested in those facts. Or, for that matter, the theory that can make sense of those facts.

Tagged: 1 percent, economics, economists, exploitation, facts, inequality, mainstream, outsourcing, surplus, technology, theory, wages, workers

Who’s working for Facebook?

Published by Anonymous (not verified) on Thu, 07/09/2017 - 11:00pm in


There are plenty of reasons to be interested in—and, even more, concerned about—Facebook. Many of them are raised in the recent review of Facebook-related books by John Lanchester [ht: db]: the fragmentation of the polity (via the targeting of posts), the dissemination of “fake news” (which played an important role in the 2016 U.S. presidential election), the undermining of other livelihoods (such as journalism and music), the level of surveillance of users (much more than any national government), the violation of anti-monopoly rules (via individualized pricing), and so on.

All of them are important—and they get at what the Facebook business model is all about:

For all the talk about connecting people, building community, and believing in people, Facebook is an advertising company.

That’s right. That’s how the owners of Facebook make their money: they track users, collect information, and then sell that to advertisers.*

But it still doesn’t get at the issue of who works for Facebook, who creates that value, what the class structure of Facebook (and Google and other such companies) is.

Lanchester’s answer is that we, the two billion or so of us who use Facebook, actually work for the social-media giant.

Access to an audience – that unprecedented two billion people – is a wonderful thing, but Facebook isn’t in any hurry to help you make money from it. If the content providers all eventually go broke, well, that might not be too much of a problem. There are, for now, lots of willing providers: anyone on Facebook is in a sense working for Facebook, adding value to the company.

In one sense, Lanchester is right: if Facebook users don’t create or repost content and click on and respond to one another’s postings, then Facebook’s business model falls apart. In fact, as Lanchester explains,

Perhaps the biggest potential threat to Facebook is that its users might go off it. Two billion monthly active users is a lot of people, and the ‘network effects’ – the scale of the connectivity – are, obviously, extraordinary. But there are other internet companies which connect people on the same scale – Snapchat has 166 million daily users, Twitter 328 million monthly users – and as we’ve seen in the disappearance of Myspace, the onetime leader in social media, when people change their minds about a service, they can go off it hard and fast.

But what I find interesting is the fact that Lanchester can write a longish essay on Facebook and never once mention the word labor—and the only people who seem to be working are Facebook users.

What about Facebook’s employees? As it turns out, Facebook reported a headcount of 18,770 in its first-quarter earnings release (and likely employs more workers, as independent contractors for specific projects). Why don’t we consider them to be the ones who create the value realized by selling space to advertisers and information to others who purchase the data gathered by Facebook? And Facebook employees the ones who are working for and being exploited by Facebook’s board of directors?

When General Motors sells cars, the people who purchase and drive the cars aren’t being exploited; GM workers are. The same is true for other corporations, from Abbott Laboratories to Zoetis (which, along with Facebook, make up the Standard & Poor’s 500, covering about eighty percent of the American equity market by capitalization). They’re employees, not their customers, are the ones who create value and surplus-value.

So, why is Facebook (and, by the same token, other social-media and internet companies) different?

The answer, I think, is our relationship to the commodity being produced and sold is different. We purchase cars—and, if we’re aware of it, we know they’re produced by exploited auto-workers. But in the case of Facebook, we’re not purchasing anything at all, at least directly. We post content to our friends or advertise a business or try to form a community. And then it’s Facebook that collects data about us and sells it—not to us but to others, other corporations. Without our participation, of course, Facebook would not have anything to sell, and therefore no way of making a profit.

And, more generally, we seem to be spending more and more time involved in activities for which we are not remunerated but are essential for the profit-making activities of corporations we don’t work for. We post on social-media sites. We use search engines to navigate the internet. We search for flights. We check-out and bag the commodities we purchase at retail stores. And so on.

But I’m not convinced we’re creating value and subjecting ourselves to class exploitation. We may be performing labor but we’re not working for those corporations. And we are being commodified, and participating in our commodification.

But we’re not working for those corporations. Their employees are—and they’re the ones who are being exploited.


*Although, according to a recent report, Facebook may exaggerate the reach of its advertising platform: it claims to reach millions more users among specific age groups in the U.S. than the official census data show reside in the country.

Tagged: advertising, class, data, employees, exploitation, Facebook, internet, surveillance, workers

Cartoon of the day

Published by Anonymous (not verified) on Mon, 04/09/2017 - 10:00pm in

Cartoon of the day

Published by Anonymous (not verified) on Mon, 14/08/2017 - 9:00pm in