Disruptive innovation, platform companies and workers' rights

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Disruptive innovation, platform companies and workers' rights

This week the Bank of England’s Chief Economist, Andy Haldane, sparked a debate about the future of work when he said: "Technological unemployment has not been a feature of the past, but could it possibly be a feature for the future? I think that is a much more open question than any previous point, possibly, in history."

The tech world is used to hearing these views from the tabloids and regularly dismisses them as more of the same fear mongering, ahistorical nonsense. But it’s not so easy to dismiss the views of the Chief Economist of the Bank of England. My view is that he's got it right: it's an open question whether automation will lead to more unemployment or not and the boldest statements to the contrary tend to be the least transparent in how they've arrived at their conclusions.

The message of those who loudly dismiss these views is that there’s nothing to worry about. But those who care about workers and their rights should be worried because for some workers, the quality of their jobs is being eroded by disruptive innovation. One prime example is what’s happening to workers of platform companies.

In a bold opinion piece, Rana Foroohar of the FT took aim at platform companies this week:

Algorithmic management puts dramatically more power in the hands of platform companies

Rana Foroohar

"Not only can they monitor workers 24/7, they benefit from enormous information asymmetries that allow them to suddenly deactivate drivers with low user ratings, or take a higher profit margin from riders willing to pay more for speedier service, without giving drivers a cut" she says, concluding that "it's time for the platform companies to take responsibility for the human cost of disruption."

In my own interviews with Deliveroo riders, many of them believe that the ‘fiction’ that they aren’t workers is the source of many of their problems: “No one can make the argument that I’m running a business,” one rider told me. “If I’m using your app and picking up orders for your client, how is this my business?”

He went on: “It wouldn’t be so bad if it wasn’t so risky. I worked for a courier before and a guy got hit by a van. He broke a leg and was off work for two months, but he got sick pay. But at Deliveroo, who picks up the pieces when it all goes wrong? The riders do. This is not how the world should be in 2018.”

It’s easy to dismiss these problems when it doesn’t affect people like us: people who are likely to read this blog. But what happens when it’s not just the people that deliver your dinner or drive you home from a party who are being treated as self-employed with no claim on basic workers’ rights? What happens when you’re no longer a lawyer working for such and such a company, you’re a self employed legal professional connected to a client desiring legal services by a ‘legal platform’? I predict that the platform companies have had it easy so far. When they come for our jobs - the vocal, empowered, middle-classes, they’ll have a fight on their hands.

In the meantime, low-skilled platform workers continue to suffer from poor conditions: no sick pay or holiday pay, no obligation from their employer to keep them safe, train them or guarantee them a job in the morning.

Reasons to be cheerful

Glum resistance to innovation in the world of work won't help workers. Those who care about workers' rights need to innovate, otherwise they are likely to be cast by those who want to disrupt the world of work as Luddites who ‘just don’t get it.’ Here are two innovations - one of a technical nature, and one that is so simple that it’s easy to dismiss - which offer rays of hope.

The technical idea is about institutional design. Innovation agencies fund disruptive technologies, which by their nature tend to disrupt existing practices. Who should be responsible for dealing with this disruption? If you lose your job today because someone has funded a startup to develop an algorithm that automates your work, it’s up to you to go and pick up some new skills. But perhaps innovation agencies need to play a much stronger role in mitigating the effects of disruptive innovation?

One way to do this could be by building public engagement into the way they work, so that a much broader group of people are involved in deciding what projects go ahead and how they are implemented.

Alongside this, innovation agencies could start to think about funding and supporting innovation which is directed at mitigating the disruptive effects of technological progress. One interesting proposal from The Brookings Institution involved an Arpa-Ed, an innovation agency for education.

The simple idea is one which a number of CEOs have been trying recently: talking to ordinary workers. Jamie Dimon, CEO of JP Morgan Chase, is currently on a bus tour of the US, to meet ordinary employees and find out what they think about the business. What’s the value of CEOs talking to ordinary, front line workers? Here's one important insight that Mr Dimon has found so far, which was unlikely to have come up at a board meeting: "Employees are horrified by the prospect of abolishing low-paid teller jobs, since these are often key entry positions for people from lower-income households." From Andy Haldane to Mark Zuckerberg, more and more of the elite are getting out of the boardroom and going to meet people they would never come across in their daily lives.

It’s very easy to be cynical about this, but in my view is it’s a necessary and urgent step to close the vast gulf between ordinary workers and the elite who make decisions that have very real consequences for their lives.

Perhaps this is an innovation that the disruptive innovators of the platform economy, the media, and policymakers should embrace. I hope it convinces them that the stories of workers, who have to live with the consequences of the platform economy, deserve as much of a stage as the stories of the titans of the gig economy and their dreams of a future of flexible work.

Author

Tom Saunders

Tom Saunders

Tom Saunders

Principal Researcher

Tom was a Principal Researcher in the inclusive innovation team.

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