The gig economy: new name for old exploitation

Pin It

Deliveroo drivers strike

The increasing casualisation of employment, along with new online platforms for marketing labour and goods, have generated new terms which are celebrated, debated and decried by politicians, commentators and journalists. Central among these is the ‘gig economy’ – where self-employed workers are paid mainly by individual jobs or ‘gigs’ performed, with jobs often communicated through a smartphone app or website. Despite the supposed empowerment at the heart of this model, exploitative big businesses – such as delivery company Deliveroo and taxi firm Uber – have become emblematic of the gig economy. Workers usually have few employment rights, but resistance has begun, with Deliveroo drivers organised in the International Workers of Great Britain (IWGB) union demanding union recognition, and a recent employment tribunal ruling on 28 October that Uber cannot categorise its drivers as self-employed, and must pay them the national minimum wage. The gig economy is a vague concept which links loosely into wider casualisation – notably the rising use of zero hours and temporary contracts in fields such as care work, retail, catering and, increasingly, higher education. Luke Meehan looks at what the gig economy means for capitalists, workers, and resistance.

Work and Pensions Secretary Damian Green’s recent enthusiasm for the ‘huge and exciting change’ heralded by the emergence of the gig economy (Independent, 16 November) signposts a relatively new narrative within conservative politics: that ‘gigging’ has implications for the form in which all workers in Britain are employed. Some commentators in the bourgeois press have long argued such a view; with Arun Sundararajan (The Guardian, 26 July 2015) proposing that ‘millions of micro-entrepreneurs’ may challenge the hegemony of large corporations and, more recently and bleakly, Izabella Kaminiska (FT Alphaville, 2 November) warning of a future in which the vast majority of the world are reduced to ‘rental serf(dom)’. Green’s government, however, is the first to propose this position as the basis of employment law policy, and to seriously consider the legal changes through the ongoing Taylor Review to ‘reform’ employment practices.

Such a view is not backed up by countrywide employment data; with the latest report by the Resolution Foundation (cited in Financial Times, 9 November) concluding that ‘secure, permanent, single jobs continue to dominate the UK’s labour market’, and that increases in workers mixing employee roles with self-employment were modest in scope, and geographically distinct from the areas where ‘gig’ start-ups had enjoyed the most success.

Measuring the gig economy

The lack of reliable countrywide data on the gig economy is startling. The Office for National Statistics (ONS) only began preparing for big data collection in October 2016, and still has doubts about the feasibility of some of the methods it hopes to employ to measure what it calls the ‘sharing economy’ (The Feasibility of Measuring the Sharing Economy: Progress Update, 12 October). Existing studies, which support the claim that the gig economy is a significant source of employment, base their conclusions on very small samples; with JP Morgan Chase using a sample of just 8,000 workers to derive conclusions about the size of the gig economy in the entirety of the United States (Paycheques, Paydays, and the Online Platform Economy, February 2016), and Huw and Joyce using a sample size of 2,238 to deduce that approximately one fifth of UK adults had attempted to find work through ‘sharing economy platforms’ (The Rise of Platform Labour, University of Hertfordshire/Ipsos MORI, February 2016).

In the ONS’s preparatory work, it outlines four separate forms of economic activity which it feels should be represented in any working definition of the sharing economy:

  • Property rental and access; the renting of homes, storage spaces, tools, etc, as facilitated by individual online exchanges;
  • Peer-to-peer services; delivery services, taxi driving, household and professional services;
  • Collaborative finance; crowdfunding, peer-to-peer investment and lending, money transfer services, etc;
  • Auctioning and commissioning of commodities; craft goods made to order, and platforms that allow individual producers to reach market without third party distribution or face-to-face interactions.

Putting aside the question of whether these elements developed closely enough together to constitute a single historical phenomenon, it is clear that these are very different types of transaction. While it is true that all are directly facilitated by relatively new forms of online platforms, their individual relation to these platforms are mutually incompatible.

For the small investor, the craft producer, or the rentier, the online platform provides a form of cheap market entry which carves out a space where each can do business without having to compete with larger and more efficient corporate entities. The nature of the immediate transaction saves costs on storage and retail for goods, enhances the rate of return on money lent by cutting out a bank or financial service provider, and increases the return on goods lent by removing a third party. These benefits accrue, however, only as long as the small producer, investor, or lender remains small. If any want to expand to provide more commodities, capital, or goods to lend, gig entrepreneurs will find themselves quickly reliant on the more traditional sectors of the capitalist economy – the labour market, financial institutions, and markets for property and commodities. With increased outlay, the ability to find an equally expanded market in the ad hoc platforms of the gig economy diminishes, and the need to utilise larger and more institutional methods of distribution increases. As such, the ‘gig’ platform is not a revolutionary development leading to the triumph of the small businessperson; but a safety net which allows them to continue existing independently.

Piece-working and casualisation

For the workers who provide on-demand services, however, the picture is very different. Far from providing their labour as an independent actor, they are mainly contracted by an agency, and far from being the cheapest way to access employment, the gig economy is one of the most expensive. Workers for Uber, Deliveroo, and other service providers do not only undergo the standard exploitation of a capitalist taking a cut from the price of their service before they receive their wages, but suffer the extra hardship of being waged largely by the ‘piece’ – per item of work done, as opposed to having a set wage which guarantees them a fixed income. As such, these workers are incredibly vulnerable in relation to their employers or agencies, and could quite easily, and legally, find themselves with no work at all if they organise against their labour conditions. The successes of the IWGB in winning concessions for workers from Deliveroo are a remarkable reminder that workers’ solidarity and militant organisation can succeed against even the most difficult employment relations.

Far from being a symptom of a ‘new world of work’, casualisation and piece-work have a history stretching back to the early peak of capitalist production – particularly in those industries like tailoring, transport, or dockwork, where orders or tasks do not arise successively to each other in time. Marx, in Capital Volume I, identified this form of wage relation as a simple conversion of daily or hourly wages, but a conversion which ‘becomes the most fruitful source of reductions in wages, and of fraud committed by the capitalists’. Piece-work and part-time employment, argues Marx, are just tactics which allow employers to depress the price of labour power to below its value. Reckoning the value of labour power to be the cost of the commodities and services which the worker requires to survive at a given socially-accepted level, Marx shows that the division of the working day into aliquot parts, and the payment of the worker on the sole basis of those tasks or pieces which are directly profitable for the capitalist, is an attempt to maximise the profits gained by an employer by reducing their outlay on the cost of wages – further impoverishing that section of the working class unfortunate enough to be thrown on their mercy.

Marx outlines several peculiarities of the piece-work system as it existed in London in the 19th century – including a prescient warning about the tendency for the capitalists’ demand for mobile, short-term labour to create a class of parasitic middlemen who depress the worker’s wages still further. In this current capitalist crisis, however, the desperate need to maintain profitability at any cost has led to a significant refinement of techniques which allow capital to super-exploit labour; a refinement in which companies like Uber and Deliveroo enthusiastically take part. Beyond paying their workers less than the amount they need to reproduce themselves, these companies also thrust the cost of the reproduction for the necessary machinery of the company back onto the workers. Workers are expected to provide their own transport – including road tax, repairs, washing and maintenance. Not only does this allow the company to withhold payment for that part of the working day which is spent ensuring that the vehicles themselves are capable of performing their tasks, but also vastly reduces the cost of constant capital to the company, creating an ideal business model for a period of crisis. Little of the cost of production is paid at its true value, and, where possible, costs are not paid at all.

The ‘Uberisation’ strategy is one of many which allow employers to make gains by depressing the cost of labour power. Similar strategies include the non-payment of travel time to domiciliary care workers, the use of insecure agency staffing by retail and construction companies, and the replacement of a part of restaurant workers’ wages by tips.

What benefits the capitalist in a period of crisis, in this case, also appeals directly to the state. The end of the post-war boom – buoyed by the super-profits of British imperialism – in the 1970s saw the re-emergence of the general crisis of capitalism which has limited the ability of the state to sustain state welfare for the majority of the working class, and necessitated an attack on all sectors of workers by the ruling class. In view of this, the mass casualisation of university workers’ contracts can be seen as a continuation of the process begun in the care sector, where state-funded bodies reduce government outlay on vital services through increasing costs to service users and depressing the wages of workers.

Marx’s formulation allows us to break through the fetish category of the gig economy and to show the phenomenon’s relation to other forms of capitalist exploitation, as well as identifying which workers are over represented in these super-exploitative forms of work, regardless of the lack of hard data on gig jobs themselves.

Unsurprisingly, we find that those most exploited are the same sections of the working class that have always been oppressed under British capitalism: black and minority ethnic (BME) people, women, and disabled people. As the capitalist crisis deepens, these workers lose what stable employment opportunities they once temporarily had, and are thrown ever more into the reserve army of labour and forced to find whatever work they can. BME people are a third more likely to be underemployed than their white counterparts; with a significantly higher rate of unemployment and an average wage between 14% and 23% less than that of white people depending on qualifications (Equality and Human Rights Commission findings, 18 August). Women, over-represented in part-time and low- paid work, receive an average wage 18.1% lower than that of men (ONS: ‘Annual survey of hours and earnings; provisional results’, 26 October) and, while detailed national data on disabled people’s employment does not exist, an ONS regional study found that a shocking 44.3% of young disabled workers in London were in part-time or zero hours contract work (‘London residents 18-24 employed by disability status’, 11 December 2015).

The gig economy has not changed the nature of the oppression of these workers, it has simply continued the age-old custom of reaping an extra profit out of their exploitation. This brave new world which Damian Green calls ‘exciting’ is nothing more than old barbaric tactics used against the same exploited workers.


Fight Racism! Fight Imperialism! 254 December 2016/January 2017