Britain's 'Sharing Economy' Is Creating a Desperate Servant Underclass

This article originally appeared on VICE UK.

It was seven o'clock on a cold January evening when Orhan, a taxi driver for Uber, first realized he had a problem. Well into his second shift of the day, he tried logging on to the mobile app that connects him with his customers but found himself shut out and staring blankly at the words "network error."

Just an hour earlier he'd been on Twitter arguing with disgruntled Black Cab drivers who he says were racially abusing him. One of the "trolls"—upset at Orhan's choice of language—had reported the exchange to Uber, and Orhan had been blocked from accessing the system.

Parked up in his gray Toyota Prius in the suburbs of North East London, a text came through from the company asking him to come in the following morning to "discuss the account." He arrived on time, if a little nervous, expecting to have his case heard and quickly get back onto the system. Two minutes later he left the office without a job. In the cold, dystopian language of cyberspace capitalism, he'd been "deactivated." And there was nothing he could do to contest it.

In the UK, thousands of people like Orhan are working in a new type of industry called the "sharing economy." Through cutting-edge peer-to-peer software platforms, companies like Uber offer buyers and sellers a place to do business outside of old corporate hierarchies. If you have a car or van you can turn it into a micro-business through an online app. If you have a fixie you don't use or a parking space you don't need, you can rent them out with your mobile phone. And if you have skills—from assembling furniture to organizing parties—you can offer them to a client base at your fingertips.

It's a growing and popular sector. According to a recent study by accountants PWC, the value of the UK's sharing economy could rise from £500 million [$787 million] to £9 billion [$14 billion] by 2025. Last year the British government commissioned a review into the sector to help aid that growth, led by one of the industry's leading advocates, Debbie Woskow, chief executive of Love Home Swap. In the "independent investigation" into her own industry, Woskow encouraged the government to "embrace the opportunities offered by the sharing economy," outlining how the UK could become one of the sector's "global centers." Job centers were encouraged to start promoting task-sharing platforms and sharing economy businesses were encouraged to start lobbying the government.

Woskow's views echoed the popular narrative around the industry, whose founders are often lionized as "pioneers" and "disruptors" offering people cheaper, more personable ways of exchanging goods and services. As the writer Evgeny Morozov has said, its advocates "invite us to imagine it as a feel-good utopia… driven by the altruistic spirit of Wikipedia and open-source software."

But hidden beneath the smart new apps and the language of collaboration is another side, left out by Woskow's review, and by much of the media attention the industry has received. The sharing economy is often described as "the future of work" but none of the companies that make up the sector are employer-businesses. What they offer are electronic mobile platforms that connect one user to another. For the companies involved the benefits of low labor costs are obvious, but for workers like Orhan—employed as freelance contractors—the implications are stark. Work in the sharing economy can be fleeting, poorly paid, and without the safeguards and benefits of normal waged labor, highly precarious.

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Despite its wide popularity among customers, Uber offers the clearest example of these problems. While many of the company's drivers praise the flexibility of the system—they can work if and when they want—as freelancers their lack of rights has left many in a state of permanent fear.

Part of the way Uber maintains "standards" is by using a consumer-driven rating system that lets each user score the driver from one to five. Uber says this weans out bad drivers and empowers customers, but many workers see it as arbitrary and unfair. If their star rating dips too low because of poor conversation, a slow journey or a price surge, they can find themselves at risk of deactivation. Orhan's story—one of a number I heard—is testament to how damaging this can be. With four children at home, a rented vehicle, and a mortgage to pay, his life was thrown into total chaos by the click of a button.

"I felt betrayed," he recalled, speaking from the driver's seat of his car. "How do you go home and tell your family that you lost your job for that kind of reason? I have four children living under my shelter. It really hurt me."

On their contracts, Uber drivers are listed as "partners" of the company. But aside from choosing their own hours they are effectively powerless, unable to challenge the fare structure and employment terms Uber sets. One of the few powers drivers have over their work is to rate their customers and potentially get bad ones barred. When Ali (not his real name) a driver I started contacting began working with Uber in 2013 his fare was set at £1.70 [$2.68] a mile. Now, as the company tries to expand in London, the mileage rate has been cut to £1.25 [$1.97], leaving Ali, he claims, significantly worse off. Many of those I spoke to described the same problem but with the threat of deactivation and no rights protecting them as workers, few were willing to do so publicly.

"Drivers are oppressed and scared," Ali said. "They're getting dropped because of speaking out. I had a passenger in my car that was racist towards me. I parked up and refused to take him. The passenger reported it to Uber and they then issued me a warning, saying I wasn't allowed to make passengers leave my car. I was lucky. But as self-employed workers there is nothing there to protect us."

In a statement from the company, Uber contested any unfairness in their deactivation process. "Uber takes a zero tolerance approach to any concerns of racism, sexism, homophobia, or any other type of discrimination from either drivers or riders," an Uber spokesperson said. "Whilst we can't share details on individual cases, any decision to permanently remove a driver from the Uber platform due to customer complaints or a serious incident is only taken after the issue has been investigated and discussed with the driver in question. No driver has ever been removed from the Uber platform without a just cause. After all, our partner-drivers are the most important part of our business."

"If a driver's rating starts to fall we send them tips on how they can improve it and give them plenty of opportunities to improve it," the spokesperson added. "If it still remains low we invite them in for a training session, which one of our top performing partner drivers runs."

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Another area of the sharing economy operating on the same model as Uber is the market for casual labor, a place where people can outsource bite-sized errands they'd rather not do to an army of multi-skilled "taskers." One of the largest companies offering this in the UK is TaskRabbit, an online mobile marketplace founded in the US in 2008.

Like Uber, "taskers" are registered as independent contractors rather than employees. With no benefits or guarantees, they too move around from gig to gig, not knowing where they'll be next, how much they'll be paid, or what they'll be doing. With a rating system also determined by customers, the same fears and anxieties follow them wherever they go.

It's hardly surprising that this kind of service has taken off in London, where income inequality is so high. To many it looks like a new kind of servant economy, a space for the city's haves to clap their hands and be waited on by a growing pool of eager to please have-nots. Some jobs are simple enough, like handy-work and cleaning, but as Liam (not his real name) a young tasker I met in East London told me, some can be bizarre and humiliating."I know a tasker that was asked to cue up in a store to get a jar of custom Nutella from Selfridges and then drive it to the client," he said.

When faced with these criticisms, advocates of the sharing economy often highlight the system's flexibility. When TaskRabitt's founder, Leah Busque was designing the system this was, she claimed in the Financial Times, her inspiration: "How do we really revolutionize a global labor force, really give people flexibility to work when and where they want?"

Making furniture in his spare time, the tasker I met certainly fits into this picture. Unlike those using the platform full-time he chooses to work if and when he needs the extra cash. That sounds like the nice side of casualization, but is it really? Just this month, research from the House of Commons showed that 150,000 Londoners now take on two jobs to help make ends meet, a massive 50 percent increase on the previous decade. Since the Conservatives entered government in 2010, the UK has seen the longest decline in real wages for 40 years—leaving people hundreds of pounds poorer.

Seen in this context, the sharing economy looks more like a symptom of failure that technological progress—the mark of a post-crisis economy where those already in work are forced into a world of odd jobs and side-gigs just to stay afloat.

"My job is such an unstable profession and the housing situation can make you feel a bit like the future is hopeless," Liam told me. "Twenty or 30 years ago the rates in my industry were higher—you wouldn't have to worry so much about bills. Of course I would rather be well paid in what I do. I don't want to be building furniture for the next 20 years but for now it provides stability."

One company that has benefited particularly well from the growth of side-hustle Britain is AirBnB, a popular platform that allows people to rent out space in their houses. On the company's website, it claims that 80 percent of its UK hosts rent out their primary residence to help afford the increased costs of living. It's a fact they appear to be proud of, but the reality—as I found out after setting up a profile on the website—is people reluctantly selling space in their own homes to avoid, in many cases, defaulting on mortgages and other debts.

When John, a teacher from Buckley, started using AirBnB mid-way through 2012, he did it because "he had the room to do so." Now, he told me—communicating through the website's messaging system—he uses it because he needs extra money to help pay off his mortgage. If it wasn't for the debt he said he wouldn't be using it.

The same is true for Andrew, an illustrator and comic book artist I spoke to based in Manchester. When he started renting out space last year, he did so out of financial necessity—a combination of low income from freelance work and a high mortgage. Since then he's moved into full-time employment but told me the additional income is "invaluable" for paying off credit card debt and making other purchases. Like John, he said he wouldn't be using the system in an ideal world and described the amount of work he has to put into it as "like an additional job."

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Not everyone I spoke to shared the same concerns. Those using the industry for full-time work tended to describe the erosion of their rights more acutely than those moonlighting to help pay the bills. But all seemed to represent a failure of the present economy in one way or another.

And while the sharing economy makes life tough, it also makes it difficult for people to organize to improve things. In the past, plenty of freelancers have been able to organize together to change their working conditions but in the sharing economy things are much tougher. Microtaskers work in a landscape that is ephemeral and unstable, switching between multiple platforms and companies without employee status and without ever really crossing paths with people in the same position.

Nevertheless, in the UK a group called the London Private Hire App-based Drivers Association was recently set up for Uber drivers to meet and make plans. On a windy evening late last month I found myself sitting at the back of a stuffy basement at the headquarters of a major British trade union, listening in as 50 Uber drivers discussed the possibility of unionizing for the very first time.

The room was filled with anger. Drivers shared stories of being deactivated, having their fares cut, and lacking any kind of meaningful rights. "Does anyone in the room want a protest?" one animated driver standing at the front shouted out at his colleagues. Hands flew up into the air. "They want us on our own," another driver told me after the meeting had finished, a bluetooth headset still fastened above his ear. "What we need is solidarity."

Whether or not unionizing can change the fundamental nature of freelance work in the sharing economy—where many labor laws just don't apply—remains to be seen. One possibility that Uber drivers in America are exploring is challenging their classification as independent contractors altogether. Only last week a ruling by the California Labor Commissioner decided in favor of one particular Uber driver being classified as an employee.

Other ideas range from simple measures like better access to legal advice and collectively switching off apps, to working toward a genuine sharing economy where workers own the software platforms themselves and set conditions according to their own needs. It all sounds deeply challenging, but if the Uber drivers I met in the center of town are anything to go by, a struggle for rights in the UK's sharing economy is about to truly begin.

Follow Philip Kleinfeld on Twitter.