Evaluating the Meaning of Consent in the Gig-economy

Last week, Gerald Davis, the Gilbert and Ruth Whitaker Professor of Business Administration at the Ross School of Business, and Professor of Sociology at the University of Michigan, gave a talk in the Virginia Tech Philosophy, Politics, and Economics (PPE) Series, on the topic “New Institutions for a New Economic Order.” In his view, the increasing financialization of society has had tremendous impacts not only on the for-profit sector, but also on households and the state.

Nikefication, a term that he used to refer to a branding strategy without actual industrial processes behind it, is a direct implication of such irrepressible capitalist forces. Just imagine several American fashion brands such as Nike, Kate Spade, Michael Kors, and GAP that market their products in the United States, but produce most of what they sell abroad. Moreover, and similarly, many government programs are implemented by contractors today. Davis asserted that the way multi-national corporations now work and the contractorship of various jobs, has resulted in a deepening income inequality in the United States. With the advent of application-based businesses, such as Uber, AirBnb, Lyft, and Booking.com, investment models have shifted from a corporate-based and heavily industrialized process into peer-to-peer transactions organized by a programmatic application. In this regard, industrial organizations have also turned increasingly to a contractorship organizational model. For example, AirBnB, an online community marketplace for people to list, discover, and book accommodations, provides a platform for residence owners who want to rent their unoccupied rooms to earn extra income by signing up as lodging providers. This model requires zero physical investment on the part of the firm and creates no new full-time employees either. I here seek to analyze the meaning of consent in these sorts of firms by employing Gramsci’s concept of cultural hegemony and Marcuse’s concept of one-dimensional man.

There’s an App for That!

The Economist published a review entitled, “There’s an app for that,” [1] in January 2015 and it brought widespread attention to the fascinating changes in consumer behavior and expectations associated with the new form of exchange represented by that technology. Despite the lack of a widely-accepted definition for this new form of trade, which has been variously labeled the gig-economy, on-demand economy or sharing-economy (Petropoulos 2017; Burns 2017), it has expanded at an incredible rate and its reach is now global. This said, the fact there is no shared definition for the phenomenon has made it more difficult to determine the precise extent of consumer use of this form of exchange (Burns 2017).  An online organization, ‘The On-Demand Economy,’ consists of members of this emerging industry and now includes a variety of companies, whose foci range from delivery (e.g., Eat24 by Yelp, Postmates, and Ebay Now), to family care (e.g., Heal, Care.com, and Urbansitter), to parking reservations (e.g., Parking Panda, Spot Hero, and Luxe). According to officials at On-Demand, the United States alone has at least 682 firms operating in the gig economy, mostly in densely populated metropolitan areas, such as Los Angeles, New York and Washington D.C.[2] The simplicity of the system makes it seductive for consumers. Because the demand for this type of service has increased exponentially in a short period, it is no surprise that a platform-based company such as Uber is now valued at $62.5 billion. However, despite their unprecedented growth, these firms have faced resistance and criticism for their unregulated character (Schofield 2014; Martin 2015).

Puzzled in Cultural Hegemony

An online poll conducted by Future Work Initiative, Time Magazine, and Burson Marsteller, between November 16-25, 2015, sought to capture the views of a representative sample of 3,000 Americans concerning the on-demand economy.[3],[4]  Because the survey sample was representative of the U.S. population, its developers argued that its results suggested that the equivalent of an estimated 45 million American adults have provisioned goods and/or services through popular on-demand economy models such as ride sharing (Uber, Lyft, and Sidecar), accommodation sharing (Airbnb, VRBO, Homeaway), service platforms (Handy.com, Care.com, Taskrabbit), car rental (Car2go, Zipcar, Getaround) or food and goods delivery (Instacart, Postamates, Caviar). Demographically, the survey found that 61% of those who have offered such services (often called offerers) were male, 55% were members of a racial or ethnic minority, 51% were ages 18-34 and 41% were urban residents. Moreover, the majority of the offerers claimed that they were in a better economic situation compared to the year before. Slightly more than 60% of those responding believed that their economic standing would continue to improve in the year ahead. Fully 71 % of survey respondents working in the industry in some capacity indicated they felt positive about doing so, while only 2% indicated the opposite. The remaining 27% of those responding claimed to be neutral concerning their employment experience.

Nonetheless, 58% of those responding also suggested that the industry exploits the fact it is unregulated. As Burns (2017) has contended, the gig economy is not as simple as accepting jobs through an app on the phone. It is, rather, a growing portion of the economy whose workers “… work with no benefits, no job security, and no unions” (2017, 89). Furthermore, by using the rhetoric of attractive self-employment and low barriers to entry, companies such as Uber and Postmaster can easily hire drivers and/or handymen as independent contractors, without investing large sums to provide what a traditional company would offer its employees, namely training or a safety net. In doing so, these firms in effect ask individuals to forego benefits and a measure of security for flexible working hours and the freedom to conduct business relatively autonomously. This fact confirms Davis’s observation that economies of scale are no longer applicable under this scheme. This is because a platform-based company creates its equity in the form of computer programs and applications, which are much less costly to produce than large scale machines or industrial infrastructure. What these companies do is basically (re)create a niche within the existing market by employing infrastructure and/or expertise owned by the “workers” it employs (e.g., Uber drivers use their own cars).

Furthermore, the gig-economy also influences some high-skilled professions by challenging the traditional business model on which they have long rested and by suggesting that those jobs could be accomplished or approached differently. For example, a platform called HEAL is designed to bring a doctor to a patient’s home simply by tapping on a smart phone screen, without the need for cash.[5] The system’s founder, Nick Desai, has argued that the $3 trillion healthcare industry in the U.S. is fundamentally broken. Doctor shortages cause long wait times, which prompt patients to use urgent care, options, which provide fewer treatment options and at higher cost.[6] By shifting to a peer-to-peer transaction model, Desai has suggested, doctors ideally could have more time to care for fewer patients with greater efficiency. Since physicians would see patients in their homes, they could offer more nuanced treatments, since they would have direct knowledge of the environmental conditions and lifestyles of those they are seeking to assist.

This essay was prompted by my sense of puzzlement regarding the reigning ideology that has encouraged the establishment of this sort of demand-economy in the U.S. Today’s pseudo-self-sustaining culture encourages individuals to monetize every dimension of their lives. Such is certainly true of the gig-economy. Antonio Gramsci, an Italian neo-Marxist theorist who lived in the early part of the 20th century, offered a theory of cultural hegemony that sought to explain how those advantaged in capitalist society use cultural institutions to maintain their privilege and power. He defined hegemony as

the ‘spontaneous’ consent given by the great masses of the population to the general direction imposed on social life by the dominant group; this consent is ‘historically’ caused by the prestige (and consequent confidence) which the dominant group enjoys because of its position and function in the world of production (Gramsci 1971,12).

The shared-economy model exhibits two important elements of hegemony as Gramsci defined that condition––it allows both consent and domination to coexist by means of the way offerer/worker-company relationships operate—and thereby legitimates the coercive power of capitalism. Consider Uber, for example. Popular consent for this new form of business activity has been relatively easy to achieve because it requires few background checks, does not demand much by way of qualifications except for two very basic ones, i.e. a driver’s license and an automobile with four doors, and provides the offerers convenience and competitive fares for their (under-employed) resources. Marcuse (1964) argued that the advanced industrial society has created false needs that trap individuals into the one-dimensional role of seeking to fulfill unbounded desires. In his view, one-dimensional thought and behavior wither ones’ ability to think critically and behave appropriately when confronted with capital-induced oppression. Seen through this lens, society has fallen into the following conditions: a relentless cycle of production and consumption mystification exacerbated via mass media; common contractorship of goods and services provisioning; and the emergence of a contemporary mode of thought, which in the on-demand economy, is clearly affirmed as especially practical.

A case study of Tom,[7] a 24-year-old bicycle courier in London who works for an app called Deliveroo that appeared in the Guardian newspaper, demonstrated that he confronted an employment situation with only limited options available to him as a member of the working class. When he signed up to be a part-time cycle courier, the company that employed him assigned him to work for at least three-hour shifts and offered pay of £7 an hour and £1 per delivery, without health insurance, paid time off or sick pay. The firm also expected him to provide and maintain his own bicycle and to ride in heavy traffic and all weather conditions. He told the author of the news article concerning him that he believed his employer wants citizens to perceive that its delivery riders, “are all young, middle class-men who wear trendy clothes, making a little extra cash”[8] which is simply not true, given that most of the workers are doing it full-time and as their primary position. Though he is very critical of the unfair conditions under which he works, Tom remains in his role because he loves cycling and because he believes he does not possess adequate qualifications to obtain other jobs.[9]

As many gig industry firms treat their “workers” in quite similar ways (i.e., no sick leave, no health insurance, flexible hours, etc.), I support Gramsci’s argument that Tom’s tacit consent, and that offered by millions of other workers in similar situations, preserves capitalistic domination.  Furthermore, this also renders repression as economically and socially natural for all workers who choose this form of employment. My judgment is that these values are not natural, but instead are created by people with vested interests in particular social, economic, and political orders. Lastly, the idea of “pulling oneself up by the bootstraps” —that one can succeed if one just tries hard enough—is a false aphorism that has achieved the status of received popular wisdom. This claim is untrue because it masks what is, in fact, a system of structural sexism, racialism, and ableism that prevents disenfranchised populations from effectively pulling bettering their conditions. The logical follow-up question further to this realization is, is it possible to attain passage of laws aimed at minimizing the economic costs of such relentless cultural pressure, given the reality that the nation remains under the sway of a dominant neo-liberal public philosophy?

NOTES

[1]  http://www.economist.com/news/briefing/21637355-freelance-workers-available-moments-notice-will-reshape-nature-companies-and

[2] https://theondemandeconomy.org/about/

 

[3] http://www.burson-marsteller.com/what-we-do/our-thinking/on-demand/ondemand/

[4] http://time.com/4169532/sharing-economy-poll/?xid=homepage

[5] https://www.crunchbase.com/organization/heal. The company is financially supported by 17 investors including the pop-artist, Lionel Richie, and has collected $26.9M Series A venture funding within two years since firstly introduced in October, 2014.

[6] http://www.forbes.com/sites/katherynthayer/2016/10/20/why-the-doctor-will-see-you-at-home-now/#55f290d05ef0

[7] https://www.theguardian.com/money/2016/jun/15/he-truth-about-working-for-deliveroo-uber-and-the-on-demand-economy

[8] Ibid.

[9] Op. Cit.

 

References

Burns, Rebecca. 2017. Bargaining with Silicon Valley. Dissent 64 (1):89-94.

Gramsci, A. 1971. Selections from the prison notebooks (trans. Q. Hoare & G. N. Smith). New York: International Publishers.

Marcuse, H. 1964. One-dimensional man. Boston, MA: Beacon Press.

Martin, Chris, J. 2015. The sharing economy: a pathway to sustainability or a nightmarish form of neoliberal capitalism? Ecological Economics 121: 49-159.

Petropoulos, Georgios. 2017. An economic review of the collaborative economy. Policy Contribution 5: 1-17.

Schofield, H., 2014. Short-let apartments spark Paris row as Airbnb thrives (online). BBC News Available: http://www.bbc.com/news/world-europe-30580295 [Accessed February 28, 2017]

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Putu Apriliani is a Fulbright scholarship recipient from Indonesia currently pursuing her doctoral degree in Planning, Governance, and Globalization (PGG) in the School of Public and International Affairs at Virginia Tech. Her research interests include diverse community economies and collectivist democracy and their intersections with race, class and gender.  She is also a certified trainer in microfinance. She earned her B.A. and M.A. in Economics from Udayana University in her native nation. She loves to participate in cultural events, Zumba class and volunteer work in her spare time.

 

 

 

 

 

 

 

 

 

 

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