TECH
07/14/2015 02:08 pm ET Updated Jul 15, 2015

It's Time To Talk About The 'Gig Economy'

Hillary Clinton says we need to look critically at companies like Airbnb and Uber. She's right.

Former Secretary of State Hillary Clinton may have focused on middle-class wages in a sweeping economic policy speech Monday, but her comments on the "gig economy" are drawing fire as Republicans seek to bolster their tech credibility. Get ready for an "Uber Election," with Uber's allies in the press and political world pillorying the critics of the on-demand economy as analog dinosaurs stuck in the 20th century. 

Where past election cycles featured hype about the ways social media could transform democracy and Washington, Uber and the on-demand economy that it symbolizes frame consequential, complex economic and labor policy issues that don't fall along calcified ideological lines. Unsurprisingly, these topics are already being politicized in a presidential election season where over a dozen different Republican candidates are jostling to break through. 

In the technology press, which tends towards boosterism when it comes to startups and tech companies, writers like Gregory Ferenstein suggested that Clinton "better offer specifics" about Uber and Airbnb or be "branded an enemy of innovation." 

Obviously, no one wants to be an " enemy of innovation" in the United States in 2015, least of all a politician. 

So, how did Clinton "demonize" startups and rebuff the sharing economy?

She mentioned startups once in her entire speech, posing an open question about how to help them grow outside of Northern California. In another section, she praised the burgeoning "gig economy" sector but cautioned that its growth raises some questions. 

Meanwhile, many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car. This on-demand or so-called gig economy is creating exciting economies and unleashing innovation. But it is also raising hard questions about workplace protections and what a good job will look like in the future.

Later on, Clinton signaled an intent to "crack down on bosses who exploit employees by misclassifying them as contractors or even steal their wages." That's the portion of the speech that led Wired to warn Clinton is "coming after the gig economy."

Those two statements are the sum total of Clinton's critique of the "sharing economy," which has received growing criticism in the press over the past year.

If Clinton had wanted to take on Uber over bad behavior, she could have easily done so, citing past mistakes. She didn't. Writing for Fusion, Kevin Roose says Clinton has a "lot to lose" by talking about the sharing economy in anything but glowing terms. 

Because wherever Uber has failed, it has decidedly not failed to paint its principled opponents — or anyone who would question its march to ubiquity, really — as backward, nostalgic neo-Luddites. Sure, Clinton might pick up some populist support by going after Uber, but you can almost hear the attack ads now: “Is Hillary Clinton beholden to taxi industry thugs? Does she … support drunk driving?”

To oppose Uber in 2016 is to enter a rhetorical playing field that has been booby-trapped. There are legitimate reasons to be wary of Uber’s rise, but few if any national figures have been able to oppose the company without being made to sound like regressive fogies. And until skeptics of the gig economy find new and better ways to articulate their concerns, it might be better for Clinton to make a play for less flammable ground.

The challenge is that Uber and the growth of on-demand startups do frame a discussion worth having.  

As Noam Scheiber explored in The New York Times, the gig economy is just an evolutionary descendent of a generations-long trend towards a significant portion of the American workforce earning income from contingent employment. Around 53 million people are temping, freelancing or contracting, with hundreds of millions more around the world likely to participate in the years to come.

That's the trend that Clinton's chief technology officer, former Google Product Manager Stephanie Hannon, responded to in post on Medium yesterday: 

We’ve seen some employers take advantage of vulnerable workers in industries like construction, janitorial services, agriculture, and even home healthcare. Hillary’s remarks today challenge us all to think about the future of work in America. She’s calling on all sectors to do better: to ensure that no employees are exploited and to ensure that all workers are rewarded for their work. The vast majority of my colleagues in the technology community support these goals. It’s essential that we talk about how to do that right.

 Later in the speech, Clinton asked questions that relate to this changed context without decrying it.

How do we respond to technological change in a way that creates more good jobs than it displaces or destroys? Can we sustain a boom in advanced manufacturing? What are the best ways to nurture startups outside the successful corridors, like Silicon Valley?

She's not alone in drawing attention to these issues.

Influential venture capitalist Fred Wilson​, whose investments include on-demand startups and talent marketplaces, agreed with Clinton in a post on the gig economy that this is a discussion worth having :

 My view on these comments is that Hillary is right. These companies are creating exciting new economies and unleashing innovation. And she is also right that these companies raise questions about work place protections and what a good job will look like in the future.

We should not be afraid of this discussion. We should embrace it and have it.

Albert Wenger, Wilson's partner at Union Square Ventures, agreed that the nation needs to talk about these issues. In a blog post, he suggested framing the conversation not simply around jobs, but in the context of a "universal basic income" where a government provides a single payment to all of its citizens. 

As long as we frame the debate in terms of “work-place protections” and a “good job” we are still caught in the industrial system. The hallmark of the industrial system is what I call the job loop: most people sell their time and receive a wage in return — they then use that wage to buy products and services, which in turn are made by people selling their time. This job loop has been extraordinarily successful. In combination with relatively free markets it has given us incredible progress. But it is now breaking down due to automation and globalization.

The rise of the gig economy is a part of this break down of the job loop. Instead of trying to fix it and to imprint traditional work and labor thinking on these new platforms I propose an entirely different approach: truly and deeply empower individuals to participate on their own terms.

It's unlikely that this Congress will seriously consider a universal basic income. That said, that policy suggestion, along with proposals for negative income tax or flexible benefits, like workers’ compensation and unemployment insurance that aren't dependent on any employer, shouldn’t be beyond the boundary of debate.

Wilson posed other hard questions about on-demand startups and the gig economy that legislators, regulators, judges and governors may not be thinking about, but probably should be: 

Can you be a freelance worker if you don’t own the data about your work and earnings history and be able to take it with you when you leave a platform or export it to a third party for optimization? Can you be a freelance worker if you are indentured to your employer because they loaned you the money to purchase the asset you are using to earn your income? I think the answer to both is obviously no. But there are companies who argue that it is yes.

Asking politicians where they stand on Uber is probably inevitable in this upcoming election season. Here's hoping that more reporters on the campaign trail ask them where they stand on these kinds of specific policy questions, helping the country to have the healthy democratic debate it needs to hash out better answers. 

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