In the second, the sharing economy will free workers of the 9-to-5 drudge, making more of us “micro-entrepreneurs” who set our own hours and incomes. Finally empowered to profit off our own assets and time, we won’t need traditional employers.
Arun Sundararajan believes in this second vision — or, at least, the idea that the first is not inevitable, that we might still redesign benefits and labor protections that would leverage the next fundamental shift in the economy for broad good. His case for optimism in his new book, “The Sharing Economy: The end of employment and the rise of crowd-based capitalism,” is compelling in large part because it comes from a business-school wonk and not a “sharing!” proselytizer devoted to the literal meaning of the word.
We’re witnessing the beginning, he argues, of a radical change in how economic activity is organized where “the ‘crowd’ replaces the corporation at the center of capitalism.” And so when you buy something — a dress, a ride to the airport, a vacation rental — you may get it from a marketplace of individuals rather than a big company. And when you earn income, it may come from your own car or home workshop — connected over the Internet to a crowd of consumers — and not an employer’s biweekly paycheck.
Today, the vast majority of us in the United States work for someone else. The change Sundararajan envisions implies many more of us in the future will work for ourselves, whether as Lyft drivers, or copy-writing freelancers or shop owners. Some of these jobs are not new. But the ease with which individuals can connect to vast markets that would pay for those services will be.
If this sounds like rolling back more than a century of progress from economies of scale — reverting to a world where everyone is a small-time shopkeeper — Sundararajan suggests we can have both in the digital age: millions of small providers and scale.
“What gets me excited about the shift that we’re seeing now is that it transitions the role of the individual from being a wage receiver to being an owner of that system of production in some small way,” he says in an interview. “At the heart of it is an empowering shift.”
People who are skeptical of that, he argues, are making an unfair comparison between this new type of work and today’s full-time employment.
“Full-time employment at scale has been around for decades,” he says. “And we’ve had plenty of time to understand the huge imbalance in bargaining power between the individual and the institution, and to correct it in a wide variety of ways.”
In the United States, we’ve had the rise of labor unions, collective bargaining, minimum-wage laws, workers’ comp and unemployment insurance. We’ve developed a system where benefits like paid leave and health care are largely provided by employers.
Full-time employment, in other words, means something a lot better than could have been the case, Sundararajan argues. And it’ll take us time to figure out how to do the same for work in the new crowd-based capitalism. “When we transition to the individual-is-an-owner model,” he adds, “you’re starting at a better place fundamentally.”
Part of his argument is that we shouldn’t lament that Uber drivers don’t get full-time benefits; we should reconsider why benefits and security come attached only to full-time jobs. The challenge, then, is much harder than making Uber treat its drivers as “employees.” It entails dramatically redesigning the safety net and how we classify workers and companies.
That might mean finding ways to fund portable benefits that would cover workers who piece together freelance jobs and Instacart runs and Uber rides. It might mean allowing independent workers to collectively bargain with the platforms like Uber and Etsy. It might mean considering something like a universal basic income, which would counteract the insecurity of self-employment and gig work.
Sundararajan also envisions creating “safe harbors” for these platforms to experiment. Today, a company that offers training classes or tax withholdings to gig workers risks tripping over the legal distinction between having “independent contractors” and “employees.” So current labor law actively discourages them from offering more benefits to the workers who use their platforms.
Sundararajan is convinced we’ll solve these problems, eventually. “We will because individuals aspire to it,” he says. “Individuals want stability.”
But there is plenty of room for skepticism here, too. Freelance and gig workers make up a small minority of the labor force today. Even if their numbers rise, will they really amass enough power to force broad changes to the safety net? Americans spent years waging a bruising national debate over how to reform health care. But even with the Affordable Care Act, we still didn’t manage to substantially sever the link between insurance and full-time employment.
Whether these solutions are economically wise or logistically possible or politically realistic are all different questions.
Perhaps some will also view Sundararajan’s optimism as letting companies like Uber off the hook. They are, after all, making a lot more money off the rise of this new kind of work than the individual owner-workers doing it. Uber would no doubt prefer a solution where society comes up with the safety net so the company doesn’t have to (chief executive Travis Kalanick essentially acknowledged this when he praised Obamacare for creating individual insurance markets that allow people to drive for Uber).
Then again, if Sundararajan is right, this new era of work we’re shifting into will probably long outlast Uber the company.