Pando

Should VCs be funding a world where half of us do the other half’s bidding?

By Sarah Lacy , written on December 18, 2015

From The Sharing Economy Desk

The very thing that was supposed to be the selling point of the sharing economy-- yunno, all those jobs! Independence! Be your own boss! -- have become one of the biggest political threats to its existence.

There are class action lawsuits, revolts, opining politicians, and union drives.

The Observer wrote this week that it was ripping the soul of the Democratic party in twain, with Uber’s -- what is he these days, really? campaign manager emeritus?--  David Plouffe in the middle. From that piece:

Facing the multidimensional onslaught of Mr. Plouffe’s attack, Mr. DeBlasio backed down. He got Uber to agree to a few face-saving conditions, then let the proposal sink quietly into the cold deep water of the Hudson River. But the media buzzed about the Uber victory for weeks, with Mr. DeBlasio’s sudden surrender bolstering the recognition of Mr. Plouffe’s political wizardry.

So when David Plouffe showed up in Seattle, the waters of Puget Sound appeared to open and the Space Needle shook. But this time the battle was not over something like congestion, which is not a crucial issue to the base of the Democratic Party. No, it was over something much more entwined with the identity of the Democrats as a party—the right to organize a labor union.

While other sharing economy companies have given “partners” the option to become employees, many others are standing firm, claiming their “partners” prize flexibility over employment and the rest is essentially concern trolling. Such was the argument of DoorDash’s Tony Xu at our recent PandoMonthly.

I asked him and Sequoia Capital’s Alfred Lin if they worried that we were turning into a world where VC money was bifurcating us into a place where some people did the various bidding of others, all summoned by “press[ing] a button” as Uber execs have all been strictly instructed to say, whether on late night TV or in front of UK Parliament.

Here was the answer:

There is another angle to all this. The ever so delicious software underpinning these systems. That software serves as a task master for different “partners” delivering things or us around town. But does that software-- and hints and tips from these companies to make you more successful-- ultimately serves as management?

From a recent excellent piece by MIT Technology Review:

Uber calls its drivers “independent contractors” and solicits new ones with the promise of being “your own boss.” Alex Rosenblat, a researcher at Data & Society and coauthor of the new paper, interviewed a handful of drivers, talked less formally with many others from the back of an Uber, and monitored nearly a year of discussions by drivers in online forums. She says the reality of being an Uber contractor is different. “Uber does control a lot of the ways that drivers behave on the job,” she says.

If you want more, watch the full video. Because while I left the question of labor until the end, our audience wouldn’t let it go in the Q&A. Clearly these are not issues that only worry a DC audience.