How Ubernomics Are Changing the Way We Work

Ratings make sense on eBay, but do they make sense for workers?. (Photo: Spencer Platt/Getty Images)

Ratings are a wonderful thing. They started online with eBay and became the method of establishing trust among people in the so-called sharing economy, and it works. As Jason Tanz wrote last year in Wired, we're doing things that we would not have considered five years ago:

We are hopping into strangers’ cars (Lyft, Sidecar, Uber), welcoming them into our spare rooms (Airbnb), dropping our dogs off at their houses (DogVacay, Rover), and eating food in their dining rooms (Feastly).

Many of us do it without fear because of ratings, the judgments our peers have made about the driver or the apartment. But then it gets complicated. In an article on Verge, Josh Dzieza describes how the ratings game has “turned us into horrible bosses.” That’s because ratings have gone beyond being a useful way to establish trust into becoming a management system for company owners to judge employees. An Uber driver complains to Dzieza:

“We’re not just working for money,” an Uber driver told me. “We’re working for ratings, but ratings have no value. Ratings serve only to prevent you from getting fired. Only bad things can happen to you. We’re scurrying like rats after these things with no value.”

That’s Ubernomics. Management becomes almost automatic, with ratings systems used to determine who's not performing. There is no meeting with a manager, no opportunity to explain; it’s just an algorithm. Since most people are working remotely, being fired is just a matter of booting them out of the system and not sending them any more work. And since as many asa third of Americans are now doing freelance work, management by rating algorithm is likely to spread. Dzieza concludes: these companies grow to encompass more forms of work and larger pools of labor, the way they decide who can stay on the platform and who gets deactivated will become even more pressing, and something that any serious regulatory attempt or labor movement will need to address. It’s also something customers need to think about, because they can’t help but be complicit in the system that’s emerging. They aren’t just customers anymore. They’re also terrifying bosses.

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A hundred years ago, workers who objected to arbitrary judgments by bosses, to working long hours for low pay without benefits formed unions. Harvard Law professor Benjamin Sachs told Dzieza:

“A lot of the history of the union movement was the fight against arbitrary managerial decision-making,” said Sachs. “You don’t want to allow management to fire someone because they don’t like them, because they looked at them funny. One thing unions do is they impose rules, just cause firing provisions to curtail managerial power so it’s fair.”

In the Ubernomics economy, the algorithm becomes the human resources department, deciding who gets work and who doesn't. There are no unions, because there are no permanent employees. And, interestingly, that's the way jobs seem to be going for everyone, even in more traditional manufacturing.

Car assembly line
Life on the line ain't what it used to be. (Photo: Bill Pugliano/Getty Images)

It’s instructive and depressing to read the Verge article together with Alana Semuels' story in the Atlantic, about the “on-shoring” or return of manufacturing to America from Mexico and China. About 700,000 jobs have been created since 2010 but she notes,

These are not your father’s manufacturing jobs. Many of the companies are locating their new plants in right-to-work states where it’s less likely their workers will join a union, and the prevailing wages are far lower.

Even the car manufacturers, which used to be the backbone of the middle-class, blue-collar workforce, are hiring temporary workers instead of permanent ones, and paying them barely more than minimum wage. The companies claim this is necessary to compete in a globalized business world, but back in their home countries of Japan and Germany, workers are unionized; they are well-paid solid members of the middle class with houses, vacations, medical insurance and pensions.

It’s not a happy vision for the future of work. On the one hand, we have the so-called sharing economy, where one’s livelihood is decided by an algorithm; on the other hand, we have the new manufacturing economy, where workers are provided by temp agencies so that the companies never have to accept any obligation or responsibility. Neither provide the kind of security and income needed to rebuild a strong middle class.

It all makes one wistful for government regulation and strong unions, but good luck with that these days.