Senator Mark Warner (D-Va.) made a fortune as an early wireless industry executive. Now, he's on a tear about the tech industry's most disruptive companies and why politicians — especially presidential candidates — aren't talking more about their impact on the labor economy.
He sees a growing number of sharing-economy companies such as Uber, TaskRabbit and AirBnB transforming employment. About half of all American workers will be freelance or contractual workers by 2020, some economists predict. This trend is upending our notions of what it means to be a worker and what responsibilities a company has to provide benefits like health care and pensions. If unanswered, questions about a national social safety net for contractual workers may end up burdening the whole economy, he warns.
To be clear, Warner isn't proposing federal laws just yet for part-time and contract worker benefits. He's already seeing innovative solutions from tech companies and local governments to address policy concerns. But he's trying to get candidates, policymakers and the biggest companies in Silicon Valley listening -- and says legislation at some point may be the best option.
The following is an interview with Warner, edited for length and clarity.
What is your concern about the sharing economy?
Warner: This is a fundamental change, and yet what I find is that policy makers may not have even heard about the "Gig economy" or sharing-economy. We have 25 people running for president, and no one is talking about the fastest-growing area of work in our country. What I don't want to do is impose a Washington top-down solution, yet I don't think this should be left to a patchwork of court decisions either.
How would you describe the sharing economy?
Warner: I would categorize people in the sharing economy in three groups. There are millennials that we like to talk about as celebrating the choices of part-time work and who don't want to have 9-to-5 jobs and who love working on three to four things at once. There are the people my age who are forced into this because they lost a good job during the recession and now need multiple revenue streams. And then there is the third category of people who are probably rolling their eyes saying this is nothing new and they've been working like this for the last 20 years and it's been called "just getting by."
So maybe the third category provides a good case study as to what problems they've encountered over the years?
Warner: These people have had to rely on government assistance when available. For the people who are not in that category and who make six figures today, we aren't worried now. But when the stuff hits the fan it's not going to be fair to the tax payer to have to deal with it later. We have to look at different models. The Obamacare exchange is an example of one model.
What are other examples?
Warner: Maybe a public-private employment exchange, a disability exchange and workers' comp exchange. We could look at an old idea of building trade unions and doing hour banking so that if you were a carpenter and worked 10 to 11 hours, you could bank those hours to a third party insurance fund. That model could make some sense. There may even be consumer-driven models such as the collection of tips for Uber drivers that goes into a social insurance fund. I'm not suggesting a specific model but policy makers need to keep talking about these thing.
But what about the responsibilities of companies?
Warner: I was encouraged to see that with Uber and AirBnB, they started without insurance policies but now have plans. An evolution is taking place but you need to find a way to speed it up. Don't think you never want federal legislation. Candidly, you might rather have federal legislation than 50 different state rules or thousands of municipal rules.
It took lots of negative press coverage on drivers' insurance to get Uber and Lyft to change their policies for drivers. What will motive the companies to seek these changes?
Warner: Some of this will come from millennials demanding it. From everything I've witnessed, millennials are a diverse and socially conscious generation that wants to work for and purchase from companies that are socially responsible.
What are some specific examples of company-driven changes that encourage you?
Warner: I've seen with taxes and the people at Turbo Tax and a guy out of Richmond who started Painless 1099 that helps get rid of the hassle of the tax process for contractors. There's a group out of San Francisco called Peers, investigating a model around social insurance. We are at the beginning stages. What I'm trying to figure out is how to not slow innovation and still allow some upward economic mobility while also providing a social safety net that is collaborative and not top down.
Will there eventually be a law addressing these issues?
Warner: I do think at some point the sharing-economy will want legislation because you won't want to leave it simply to the courts. There needs to be a lot more conversation and discussion about this because many of these companies didn't even exist five to seven years ago.