The dynamics of platform economies, how workers are seeking to organise in this new form of capitalist organisation, and how they have responded to the Covid-19 crisis.
The Ekona Collective is an economic innovation co-operative specialising in economics that promotes innovation in the public and community sphere. It works in collaboration with the Taxi Project 2.0, which seeks to defend the interests of the taxi sector, including its workers and customers.
This article was made possible thanks to a generous grant by the Lipman-Miliband Trust
This project concerning the self-organisation of Gig Economy workers is directed by Ben Wray.
Translated and Edited by BRAVE NEW EUROPE
From the Fordist model to Platforms
Platform economies have gained paramount importance in the past 10 years. They are gradually replacing large companies created in the mid-20th century. Just as international corporation’s such as General Motors helped define the post-war social contract through negotiated agreements with the unions and the state, today these new companies are redefining the social contract downwards for many workers.
In 1960-70s Spain, workers managed to define a model of trade union struggle that allowed them to defend their rights in a time dominated by assembly-lines organised around heavy industry. Today, workers in the new platform economies are in the initial phase of organising that will define their future labour relations.
Unlike what happened in the 20th century with the Fordist model of production in which the condition of workers was recognised despite the precariousness of rights, the people who work today linked to the platforms are fighting to be recognized as employees, which is what they really are. Informal or precarious employment is growing in many developing countries, and is also increasing in various forms in industrialised countries. In contrast, trade union membership has declined in many nations as the number of formal, permanent and full-time jobs has fallen.
Italy and Spain have the highest incidence of precarious work and risk of poverty in the workplace in Europe. This rate increased between 2015 and 2018 from 8.8% to 9.4% in Italy and from 10.4% to 12.7% in Spain. The response of the majority of unions has not been to create specific federations for the representation of temporary workers. They have maintained the classic structure of negotiation from above, responding and strengthening their role within the political sphere of the traditional economy. They are less interested in organising workers in new industries from the base.
If we could outline the phases of the construction of a social contract for workers in the new platform industries, we could say that they are the following:
- Recognition: Treated as equals by workers with the same or similar working conditions.
- Organising principle: Establishing the principle of joint organising and beginning to develop strategies for action.
- Action: Beginning to execute measures to defend workers’ rights.
- Growth: Extending the network of workers in the same or similar conditions to other sectors and territories.
- Consolidation: Ensuring the organisational structure is robust enough to be sustained over time.
- Demands: Elaboration of proposals for how labour rights should be structured.
- Advocacy/lobbying: Measures to pressure corporations and the state to act on the demands.
The organisation of Platform workers
With these phases in mind, and given the new working conditions of the 21st century, we ask ourselves under what conditions do young precarious workers come together?
Experiences in France, Germany, the United Kingdom, and the United States revolve around specific campaigns such as coalition building. This involves activism by members who are not necessarily dues-paying affiliates but rather generate a community of support and put capacity building activities at the centre of these innovative organisational approaches. In addition to traditional issues such as wages and worker training, these approaches also include issues specific to precarious workers, including training in negotiation skills, organising demands for minimum working hours, and specific support for those working in unsafe situations. We have found that successful innovative organisation tends to occur when unions combine these new approaches with existing traditional trade union structures.
In the Spanish case, it is associations and collectives of taxi workers in some of the country’s main cities that are leading this process of building such labour contracts and a new unionism related to platform economies. In this sense, the work of the Elite Taxi Association, which defeated Uber in the courts on several occasions and has led the process of strikes that has led to victories such as the Spanish legislation clearly restricting the activity of car rental services which are not taxis. They have been joined by delivery workers, tenants in defense of the right to housing and some unions.
Most platform economies were born with the long-term objective of exercising monopoly in a given sector through the dominance of information. They do this through very aggressive investments financed by large investors willing to take many risks, including not seeing returns on their investment for many years. The ‘lean’ business model is to minimise additional costs beyond platform-development to a minimum, including taxes and labour salaries.
We must bear in mind that some of these companies are transnationals with large economic and geopolitical interests, which have extremely complex structures that allow them to spread out over different parts of the world, including some of the so-called tax havens. This opacity increases profitability for initial investors, but it also has the effect of making union organising and advocacy more complicated.
The objective of workers’ groups in Spain in relation to these platforms is the recognition of their labour rights, but they also have societal aims, such as the payment of taxes by these companies. For this reason, the network of workers across the Spanish platform economy is consolidating around a clear set of industrial and political demands. These are:
- Recognition as salaried workers of companies that use digital applications.
- Labour rights recognition.
- Taxation of these companies in Spain, mainly VAT.
- Privacy rights associated with the use of data from mobile applications, both for workers and users.
With regards to the development of an inclusive social contract, the digitisation process must take into account two elements: work and democracy.
For work, it must include instruments to ensure that the introduction of digitisation in companies does not lead to workers being laid off, cuts to working hours or wage reductions.
For the second element, democracy, it is necessary to promote a model of co-ownership of data (between trade unions, companies, customers and public administrations) with the aim of promoting transparent management of data for the benefit of the customer (their protection) and the sharing of profits to stakeholders. Algorithmic control should not be solely in the hands of CEOs.
Platforms in the Covid-19 crisis
Since the Covid-19 crisis began devastating Spain, the set of contradictions that workers in the Platform sector face has intensified.
On the one hand, we have witnessed how the taxi drivers’ collective offered different services to collaborate in the safe transport of people affected by Coronavirus. Both the permanent disinfection of their vehicles and the constant advertising of free services for those who did not have the resources to get to the hospitals have been included in their daily activity. On the other hand, we have also seen how workers on the home-delivery platforms have had to continue working for a long time without the necessary safety measures against infection. And in the cases where they have had protective measures in place, they have had to foot the bill themselves.
On the other side of the balance, some of the main media outlets have amplified the demands of the platform companies for financial support from the government, as if it were a sector differentiated from the rest of the Spanish economic fabric with rights superior to others. An example of this search for differential treatment is the agreement reached by the Catalan Institute of Health (the Catalan public health system) with Uber, an agreement that has been reproduced in various European countries, to launch the Social Medics service, through which Uber would be promoting itself by providing medical transport services, while health transport companies with current contracts with the public sector have sought temporary layoffs due to the pressure of the crisis.
This crisis shows the potential weakness of the platform models. Their expansive method of growing with the aim of creating monopolies or quasi-monopolies, is shown to be a particularly risky strategy when faced with a deep financial crisis. In the short or medium term, investors may consider withdrawing to compensate for losses from the Covid-19 crisis, an issue that may generate a negative shock in the supply of services, some of them essential (e.g. urban mobility). The question must be posed about the social value in the supply of basic services determined on the basis of highly speculative private investment decisions?
When restrictions on movement are relaxed, home delivery is likely to be one of the first sectors to start working, while urban transport in this first phase will still be significantly reduced. This places workers with fewer rights and less income in a very precarious situation, which could be aggravated by the reduction in the purchasing power of society as a whole and could reduce the demand for this type of service for a very long time.
To prevent a new social contract emerging out of this crisis which is even more harmful to workers, it will be necessary for workers’ industrial organisation and political pressure to be capable of counteracting the employers’ attempts to tip the balance in their favour.
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