Uber Workers vs the “Sharing Economy”

The class struggle within Uber is rippling through global markets. The Uber IPO in May 2019 opened below its target price, amidst strike activity by Uber drivers worldwide. Uber’s business model, which incorporates millions of active drivers globally while losing $5.2 billion in the second quarter of 2019 alone, relies heavily on the conceit that the millions of drivers are independent contractors and not employees.

In September, the California State legislature passed Assembly Bill 5, which will make that conceit more difficult. To classify a worker as an independent contractor, the new rules require businesses to “prove that the worker a) is free from the company’s control, b) is doing work that isn’t central to the company’s business, and c) has an independent business in that industry.” The law will take effect in January 2020.

The question of worker classification is also being litigated in New York state and London, and Uber recently won a court ruling in Brazil. Workers across “gig-economy” firms have escalated actions against these innovations in exploitation worldwide. Earlier this year, workers at Condé Nast/Epicurious protested being labeled “freelancers,” Uber Eats drivers in Japan unionized, and Foodpanda drivers in Malaysia went on strike. And hundreds of thousands of workers have filed class-action suits against Uber in California and Massachusetts, claiming they are employees and not independent contractors. These events challenge a practice that is core to the business of Uber and other “gig-economy” firms. In theory, victories would make it easier for workers at Uber and similar companies to win the benefits owed to legal employees—and to unionize.

While Marxists understand the struggle around this issue will continue to evolve, the capitalist class has an incentive to present these kinds of reforms as finished products healing temporary defects in new technology businesses. The editorial board of the Financial Times calls the California law an “antidote” that offers a way to reign in the excesses of the “sharing economy.” They have a vested interest in presenting capitalism as stable and “fair.” The liberal wing of the bourgeois, including Democrat Elizabeth Warren, hopes to maintain a mythic image of how capitalism worked during the postwar economic expansion. However, it is not possible to reform these firms into an idealized version of what “normal” companies are supposed to have been like earlier in the 20th century.

The IMT has analyzed the dynamics of the so-called sharing economy, clarifying that its real contribution “has been to turn personal property into private property—that is, to turn the personal property of millions of ordinary people (homes, cars, etc.) into a source of profits for the capitalists. Put simply, it is the mass conversion of small-scale personal property into capital.” Companies seek to control our free time, personal lives, and possessions in order to capture ever more surplus value from the working class, severely eroding our ability to engage with family and community.

The capitalists implicitly understand that the old social arrangements no longer play a progressive role in society, and seek to use technology to overcome these insoluble contradictions. The capitalists helming these firms, and the finance complex backing them, are invested in undermining the effects of laws like California’s AB 5. The only way they can survive is if they continue their march through public life, converting more and more aspects of people’s lives into profit centers benefiting the rich. In California, gig-economy firms, including Uber, Lyft, and DoorDash, now plan to spend $90m on a ballot initiative to get exemptions from the new rules.

Across every “disrupted” industry, firms, including Uber, operate at massive losses, funded by the enormous investment of speculative money, aggressively thrown into efforts to maximize profits. Most of these firms were founded after the last financial crisis, and most of the gains of the so-called recovery have gone straight to the superrich. The new tensions in the sharing economy are developing as the world economy dances around the next economic downturn, while the social disruption of these firms is one aspect of the continuing social deformations of the last recession.

The new-industrial capitalists are extended a long lease to develop companies at a financial loss, but this flexibility comes at a price, and financial backers will ensure that the ultimate cost of any failure will be borne by workers. In one case, the Japanese holding company SoftBank, which has invested heavily in companies including Alibaba, Sprint, Uber, and WeWork, has incurred significant 2019 losses on their investments in Uber and WeWork. Softbank has nonetheless announced $5 billion in new investment to take a controlling interest in WeWork, which plans to lay off 4,000 workers as part of the bailout arrangement. Workers at Uber and other firms will likely eventually be made to pay as well. In this struggle, there is no fundamental divide between higher and lower-paid workers. Casualization is also taking place in technical jobs. Although capitalists would like to induce higher-paid workers into acquiescence, these workers have nothing in common with the capitalists and everything in common with every other worker on the planet.

Rather than allowing the continued capitalist onslaught which alienated workers from more and more of their time and possessions, revolutionary socialists propose to rearrange economic relations in general—to expropriate the expropriators—and for workers to take their destinies into their hands by establishing a democratic and rational system of production.