Gig work existed before the internet. Alongside traditional forms of self-employment like plumbing, ad-hoc service offers were commonly found in the Yellow Pages, newspaper classified ads, and eventually on sites like Craigslist and Backpage. The rise of low-cost broadband internet allowed for the emergence of computer-based gig platforms such as Mechanical Turk, Fiverr, and Elance, enabling almost anyone to earn some extra money. With the advent of smartphones, any place could become an office, and any task could turn into a gig, giving birth to the gig economy.
Perhaps influenced by technological progress and general financial insecurity stemming from the 2008 recession, people faced poor prospects, needed money urgently, and had limited choices. This period also saw the popularization of the phrase “the sharing economy,” positioned as an antidote to excessive consumption. However, the freedom from ownership veiled the concerning transformation of skills and assets into commodities. Among the many companies that took advantage of this environment, none did so as extensively or persistently as Uber.
Uber became notorious for aggressively entering new markets without obtaining regulatory approval. It solidified its reputation as a problematic corporation through various scandals, including evading regulatory scrutiny using the Greyball tool, privacy issues, user surcharges, as well as initial instances of sexual harassment and discrimination. Initially, Uber heavily subsidized its rides using venture capital, disrupting the traditional cab industry in each market it entered before eventually raising prices and minimizing driver payouts once it became dominant.
The rise of the gig economy and Uber’s dominance had ripple effects, particularly causing taxi medallions to lose value significantly. In locales where cab drivers viewed medallions as retirement investments, their value plummeted due to the influx of ride-sharing services. Efforts were made in some jurisdictions to offset the decline in medallion value, with measures like compensation packages for cab drivers.
Many ride-share drivers sought to be recognized as employees to ensure a stable hourly wage, overtime pay, and benefits, a move fiercely opposed by companies like Uber and Lyft. Government agencies and regulators began introducing rules aimed at reclassifying gig workers as employees, signaling potential changes in the industry.
Despite Uber’s efforts to achieve automation through self-driving vehicles and flying taxis, these plans did not materialize as envisioned. The company eventually sold its self-driving car and flying taxi units in 2020. Uber’s model inspired numerous startups, leading to a proliferation of businesses adopting a similar operational approach, often termed as “Uber for X.”
The proliferation of gig economy platforms has had far-reaching effects. Workers perform tasks through semi-automated platforms, connecting with customers but lacking control over their work environment. Regulators, dazzled by promises of innovation, often failed to enforce strict guidelines, leaving many vulnerable. The gig economy’s cost is paid not by the platforms but by others caught in the cycle of automation and exploitation.
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