It's been a relatively slow news week so we thought we would do something a little different, and take a look at what Karl Marx had to say about the gig economy.Now, obviously there was no such term as 'the gig economy' in the 19th century, but there was something known as 'piece rates', which simply meant a worker being paid for each ‘piece’ they produced, rather than for their time. This is essentially the pay system for gig work, where you are paid per task completed rather than for the amount of time you are at work. In volume one of what is probably Marx's most important work, 'Capital', there is a chapter on "Piece-Wages". In Marx's day, piece rates could operate side-by-side with "time-wages", with the dividing line often being based on the origins of the worker.“In the same saddlery shops of London, often for the same work, piece wages are paid to the French, time-wages to the English.”
While such a division may not be so explicit in today's gig economy, it remains the case that those who tend to earn piece rates are first or second generation migrant workers. Marx finds that piece rates went all the way back to "the French and English labour statutes of the 14th century", but that "it only conquers a larger field for action during the period of manufacture…In the stormy youth of modern industry, especially from 1797 to 1815, it served as a lever for the lengthening of the working-day, and the lowering of wages.”Before we explain why Marx believed piece rates are a useful tool for capitalist exploitation, it's worth noting the historical parallel: piece rates grew rapidly at the dawn of the industrial revolution, just as the gig economy has emerged at the dawn of the digital era. 'History doesn't repeat itself, but it often rhymes,' as Mark Twain may or may not have said.What is the thrust of Marx's argument about piece rates? We can split it into two parts: first, what piece-wages and time-wages have in common, and secondly, what separates them.
Marx found that it appears to the piece-rate worker that their pay is determined by their output, as if they work harder or longer (producing more 'pieces') they get more pay. In fact, what the capitalist pays the worker for each piece is only what is necessary to motivate them to return to work the next day, taking the rest ("the surplus-value") for themselves. In this sense, there is no difference with the time-waged worker. Marx proves this by way of an example of a worker who's productivity doubles, producing twice as many 'pieces' in the same period of time. If her wage corresponded with her output, it would double as well, a dynamic that would eventually incentivise the worker to reduce their hours significantly. Instead, the capitalist takes an ever-bigger share of the worker's "labour-power". Even if their wage increases 50%, their rate of exploitation has also risen 50% as their productivity has increased by 100%. In practise, as the capitalist is in competition with other capitalists and wants to incentivise the piece-rate worker to work longer hours and more intensely, the wage increase per piece is likely to be a lot less than this, if anything at all. Thus, the more productive the piece-worker, the greater rate of exploitation by the capitalist. "Wages by the piece are nothing else than a converted form of wages by time, just as wages by time are a converted form of the value or price of labour-power."
But if this is true, then what is the difference between a time-waged worker and a piece-waged worker? Marx argues that the “piece-wage is the form of wages most in harmony with the capitalist mode of production" because it incentivises the worker to work longer and harder.“Given piece-wage, it is naturally the personal interest of the labourer to strain his labour-power as intensely as possible; this enables the capitalist to raise more easily the normal degree of intensity of labour. It is moreover now the personal interest of the labourer to lengthen the working-day, since with it his daily or weekly wages rise." The piece-worker also has a more competitive and individualistic attitude towards their work."The wider scope that piece-wage gives to individuality tends to develop on the one hand that individuality, and with it the sense of liberty, independence, and self-control of the labourers, and on the other, their competition one with another. Piece-work has, therefore, a tendency, while raising individual wages above the average, to lower this average itself.”
Anyone familiar with the gig economy will recognise at least some of Marx's analysis here. The most important benefit to the digital labour platform of piece rates rather than timed-wages is the effect it has on the psychology of the worker, who sees herself not as part of a group of workers collectively exploited by their algorithmic boss, but as an individual in a competitive market place who's wage is determined by her own exertion. In such circumstances, it becomes easier for the platform to maintain discipline among the workers and reduce the chances for any collective association, which in turn makes it easier to cut wages, worsen conditions, etc.On the otherhand, piece-wages have another important psychological effect: the worker is more conscious of the market value of their output as they see it as directly linked to their wage, and thus when disparities grow between the two it generates "constant battles between capitalist and labour," Marx finds. The modern form of this is a rider or a driver comparing the customer price of their delivery or journey on the app to their pay rate: the bigger the gap between the two the greater sense of injustice they have.Marx's argument justifies a trade union defence of employment status over the piece-rates of the 'independent contractor', on the basis that the latter is more conducive to capitalist exploitation. But he also reminds us that in the case of both piece-wages and timed-wages, the capitalist exploits your labour-power and only pays what it takes to bring you back to work the next day. For the gig worker, liberation is something more profound than moving from piece-wages to time-wages: it would mean challenging the dictatorship of capital by building a worker-led algorithmic democracy. Ben Wray, Gig Economy Project co-ordinator
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Gig Economy news round-up |
- LONDON: UBER EATS RIDERS STRIKE AND PROTEST OVER PAY: A major protest by Uber Eats riders in London took place on Friday [11 August], following reports of riders blocking deliveries in the city in a strike on Wednesday, in a dispute over pay. The self-organised group of riders say that the base rate of pay has been falling for years, while Uber Eats apologised for low fares between Monday and Wednesday of this week only, which the food delivery platform said was due to a technical glitch and that they would reimburse couriers' their lost income. The ADCU union, which is supporting the protests, tweeted from what they said was a "massive" demonstration on Friday evening outside Uber's London HQ. On Wednesday, an Uber Eats rider called Bansi Khunt tweeted: "We are doing [a] protest due to uber eats food delivery low pay. They are paying just £4 for 4 miles. They should pay minimum £8 for 4 miles." ADCU's couriers lead Catherine Meechan told the Evening Standard that Uber Eats' offer to reimburse the riders £0.40 for trips completed between Monday to Wednesday was "an insult really". Read more here.
- DELIVEROO TO GIVE SHAREHOLDERS A £250 MILLION SPECIAL DIVIDEND: British food delivery platform Deliveroo announced on Thursday [10 August] that it would be issuing a special dividend of a quarter of a billion pounds, due to "ample cash" and "unforeseen circumstances", according to its CEO Will Shu. The payout to shareholders comes after the company announced that pre-tax losses had fallen from £127.1 million in the first half of 2022 to £57.6 million in the first half of this year. Revenue rose 5 per cent to £1 billion due to increased customer spending per order, with order volume falling 6 per cent. Shu said that with net cash of £948 million it was "time to give this back to shareholders". Deliveroo's share price, 127.20p, remains well below its offering price of 390p at its IPO launch in March 2021. Deliveroo has previously been criticised for riders' earning below the hourly minimum wage on average, and Fairwork, Oxford University's research-action project on the platform economy, tweeted in response to the news of the shareholder payment: "Wondering whether Will Shu will also be giving back to riders...Perhaps guaranteeing a living wage?" Read more here.
- 66 LONDON RIDERS ARRESTED THIS YEAR FOR IMMIGRATION OFFENCES: A Freedom of Information request by the Evening Standard has revealed that 66 food delivery couriers in London have been arrested so far this year by the Home Office for immigration offences, with 10 of those already deported. The offences include overstaying, illegal entry and students working in breach of Visa conditions. The immigration raids were criticised by the IWGB union, which organises riders in the UK, with BAME officer Larbi Neron saying that they were based on "racial profiling" and "frequently under the guise of vehicle stops for insurance checks under the Road Traffic Act". Cristina Patriarca from Anti-Slavery International said that many migrant riders were at risk of modern slavery, adding: "The very nature of app-based management means a lack of direct relationship between the worker and the 'employer', which can result in long working hours, and low payments where people may end up earning below minimum wage." The Home Office defended the raids, saying: "Illegal working, including in the gig economy, causes untold harm to our communities, cheating honest workers out of employment, putting vulnerable people at risk, and defrauding the public purse." Read more here.
- SPANISH RIDERS SUFFER ON HOTTEST DAY SINCE 1950 Food delivery couriers across Spain worked through 40 degrees + heat on Wednesday, the hottest day in Spain since 1950. Riders complained that many public water fountains that they've been directed to by the company do not work or the water comes out hot, 'El Confidencial' reports. A Glovo rider said the situation is especially bad for riders desperate for money, often those working undocumented who need to pay a rent of up to 50% of their wages to an account holder for usage of the app, because they have to work through the hottest hours from 1-6pm. "Until a delivery man falls due to heat stroke, Glovo is not going to do anything with its self-employed workers," one rider told the newspaper. Glovo refuses to employ its restaurant delivery riders despite the fact the Riders Law came into force two years ago this weekend. While riders who are employed in its grocery delivery section get sunscreen, the self-employed riders do not. A new law was introduced in May to prohibit working when a red or orange weather alert has been issued, but it only applies to employees. Read more here.
- FRENCH RIDEHAIL UNION ACCUSES 'FLEXIFLEET' OF SCAMMING DRIVERS: French private hire union INV has said it plans to file a complaint for fraud against Flexifleet, a company which specialises in renting vehicles to private hire drivers, but is accused of misleading drivers into believing they will end up owning the cars. Flexifleet deducts the rent directly from the earnings of the drivers. The company's materials, social media promotion and the Uber app - which promotes Flexifleet - all suggest that the driver will eventually end up as the owner of the car, but in practise it is a purely rental contract and the driver must pay an indemnity in the case of non-return. One private hire driver, Yoan, told RMC: "When we go to the premises of Flexifleet, the person in charge of having us sign the documents makes it clear to us that in the end, we will become the owner of the vehicle. I gave 49,000 euros, thinking of becoming the owner in the end of the contract." Instead, Flexifleet seized the car. The INV union says it has collected 100 complaints from drivers about Flexifleet, with the union's General Secretary, Brahim Ben Ali, stating: "At present, there are still drivers who think they will acquire a vehicle at the end." Flexifleet denied the fraud allegation, stating that the contract is clear. Read more here.
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What happened to the riders?Angelo Junior Avelli, Mark Brown and Maurilio Pirone write in Jacobin Italy on the latest developments in the struggle of food delivery couriers in Italy.
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- The WE-TRANSFORM project is hosting a conference in Turin, Italy on 'a policy agenda for workers transition in automated and digital transport services', 27-28 September. Click here for full details and to register. - WageIndicator is hosting an online conference on 'A Level Playing Field for Gig Workers', 27 October. Click here for full details and to register.Know of upcoming events we should be highlighting? Let us know at GEP@BraveNewEurope.com.
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The Gig Economy Project is a media network for gig workers and we welcome contributions from workers, writers, academics, activists - anyone who wants to stand up for workers' rights in the gig economy.
If you would like to write for the site, discuss arranging an interview with GEP, or simply have information about developments in the gig economy in Europe you think we should be aware of, get in touch.
Contact project co-ordinator Ben Wray at GEP@BraveNewEurope.com or send a direct message to the Twitter: @project_gig.
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