power your advice

Uber and the Future of Work

Written by: Nicolas Colin | TheFamily

Last Friday I was invited by Uber to participate in a day-long seminar on platforms and the future of work at their London headquarters. There were many prominent scholars and policy thinkers from the UK, some (but not all) working with Uber on a regular basis.

Uber is reaching out to such thought leaders because the company is undergoing a kind of fresh start. They have a new CEO (Dara Khosrowshahi). They’ve divested their assets on difficult markets such as China (where they sold to Didi Chuxing ) and South-East Asia (where they sold to Grab ). They’ve been tackling the issue of becoming a company that is more welcoming for women . Now they’re seeking to engage more with a key stakeholder: the drivers . And a way to do that is to reflect on how Uber’s being a platform radically changes the labor experience for this new breed of workers.

I was invited because I’m working on a research paper on covering risks in the platform economy. As part of work conducted through Sciences Po and an arm’s length partnership with Uber, the paper is being written with my old accomplice Bruno Palier (a leading authority on everything related to the welfare state, with whom I co-authored an article in Foreign Affairs in 2015 ), as well as Nolwenn Allaire (an aspiring researcher at Sciences Po) and Laurène Tran , who works with me at The Family (and has a background in social science). There are a few key ideas that we’re bringing forward in the paper, and I’d like to share them here. (Of course, any feedback you may have is very welcome.)

1/ Self-employed work is a category that only emerged with the rise of salaried work at the end of the 19th century.

In their search for higher productivity , the firms of the day started to invite some workers into a longer-term relationship that provided additional benefits in exchange for worker loyalty and subordination. As this new employment contract became the preferred form of agreement for industrial firms, a label had to be attached to those who continued to work outside the realm of the Fordist corporation. And so it’s only been about 150 years since salaried work first emerged and forced us to isolate the self-employed within a distinct (and rather heterogeneous) category.

2/ Yet today there are fewer and fewer differences between self-employed work and salaried work in terms of purchasing power and economic security.

There have long been many lousy jobs in the realm of salaried work. Now the trend is accelerating with traditional businesses becoming more fragile than ever in what Adam Davidson dubs the “Failure Age” . There are still advantages to being salaried, such as benefits in the US and protections against losing your job in France. But the advantage is shrinking by the day, which explains the relative attractiveness of platforms for workers who have had enough of being mistreated by terrible employers. Restaurants , cleaning services , urban logistics, and trucking provide examples of these lousy salaried jobs that today’s workers are trying to escape.

3/ Several macro-trends suggest that self-employment is bound to grow as compared to salaried work.

One is the fact that platforms partnering with self-employed workers are better at harnessing the power of technology than traditional firms that employ salaried workers. The resulting higher competitiveness will contribute to expanding the model of platform work. Another is that technology makes it easier to divide work into elementary tasks and to outsource some of them to independent workers. A third trend is that self-employed workers are making progress at organizing and collective bargaining. As they become more effective in defending their members’ interests, the organizations forming this new labor movement (including pioneers such as the Freelancers Union in the US and IPSE in the UK) will contribute to making self-employed work more attractive.

Related: How Facebook Broke the Internet and Our Brains

4/ Another interesting discussion starts with a simple question: Why do platforms exist?

In some cases, it’s because they are a microeconomic optimum due to the characteristics of a certain industry. Another perspective is that certain professions attract workers with a more independent mindset. Thus there are in fact two factors driving the rise of platforms on the job market. There’s a supply-side effect with platforms growing and prospering in industries where they fit, such as urban transportation or last-mile delivery. But there’s also a demand-side effect which sees some workers embracing a new way of working that promotes self-determination, hourly flexibility, and freedom from direct managerial hierarchies. I personally find this tweet from Stripe’s Patrick McKenzie very convincing:

“I think many people in the upper middle class underestimate how desirable [platforms] are because their jobs already come with harassment-free managers, flexibility to run errands in the middle of the day, work being available every day, and not being fired if you need a day off.”

5/ The distinction between hunters and settlers is the key to understanding the world of platforms.

For most of the twentieth century, settling (which meant secure middle class jobs + being married with two kids + buying a suburban house) was the norm while hunting (switching jobs and moving often) was the exception. The reason for that state of things was that hunting was actually really hard. People in between jobs were seen with suspicion; finding clients was difficult for independent players; learning new skills was close to impossible if you weren’t ready to go back to school for months or years.

Now the current techno-economic transition has made the hunting way of life more common: platforms facilitate finding gigs; education is commoditized by YouTube and other online resources; technology itself makes it possible to augment workers , thus lowering barriers to entry into many professions; all in all, frequent intermittency is more of the norm. As a result, framing the discussion in terms of hunters rather than settlers is critical when it comes to today’s risks and how to cover them.

Alas most regulations applying to platforms assume that a key policy goal is to turn workers into settlers: consider the exams that make it harder to enter certain professions or the practice of courts declaring that workers are in fact employees rather than self-employed. But what if we acknowledge that those workers are oftentimes happy to choose such a lifestyle, supporting them as they face critical risks as hunters instead of continually pushing a degraded version of the old Fordist settling model?

This is what my Greater Safety Net for the Entrepreneurial Age is about. More to come (the research paper—and, soon, the book)!