Raw Deal: How the “Uber Economy” and Runaway Capitalism are Screwing American Workers
by Steven Hill
St Martin’s Press (2015)
Raw Deal is about all the creative ways Wall Street and Silicon Valley have invented to exploit American workers since the 2008 meltdown escalated the wholesale destruction of US jobs. As of 2015 the US economy had shed a total of 12 million jobs, a figure that is increasing rather than decreasing.
The book mainly focuses on so-called sharing platforms, such as Airbnb, Uber, Task Rabbit and their imitators. However author Steven Hill also includes chapters on the phenomenal growth of permatemp “contract” labor, the burgeoning System D or gray labor market (where employers pay cash under the table) and the steady replacement of workers by robots, computers and apps.
The Myth of Worker Independence
For me, the most valuable chapters expose the total fraud being perpetrated on the US public about Airbnb, Uber and Task Rabbit, namely the immense benefit they offer the economy, the environment and worker independence by eliminating the middleman. The myth about freeing up US workers by making them micro-entrepreneurs is exactly that: a carefully constructed lie.
Centering these enterprises around web-based apps only thinly disguises what they really are: a labor force made up entirely of contract employees. It’s an immediate win-win for the employer, who reduces his labor costs by 1/3 by eliminating his obligation to pay Social Security, Medicare, unemployment tax or health or pension benefits. And an immediate lose-lose for the “microentrepreur,” who as a member of the precariat,** never knows where his next dollar is coming from.
Hyperexploitation: the Fastest Way to Become a Billionaire
The CEOs who run Airbnb and Uber are both thirty-something billionaires (Task Rabbit founder and CEO Leah Busque is only a millionaire), who got their by hyperexploiting their employees.
Brian Chesky is the 34 year old billionaire who founded Airbnb, a company using a web-based app to enable ordinary moms and pops to rent out their spare rooms to tourists. Guests pay a 6-12% service fee and hosts 3%. Airbnb, which operates in 34,000 cities and 192 countries, is bigger than the Hyatt Hotel chin. It’s valued at $25 billion.
The company has been banned in numerous cities and countries owing to its violation of short term rental laws (most cities place a maximum of 30 days on rentals) and their refusal to pay hotel tax.
There’s the additional problem of Airbnb being taken over by real estate agents and slum lords seeking to cash in on a lucrative unregulated market. Of the 5,000 accommodations listed on the website, 2/3 are entire homes or buildings with no owner present, and 1/3 are controlled by people with two or more listings. In San Francisco, New York and other cities with rent control, unscrupulous slum lords are evicting whole blocks of elderly and disabled tenants to turn their buildings into Airbnb accommodation.
Uber Modeled After Ayn Rand’s Philosophy
Uber is a web based taxi services that recruits drivers to use their private vehicles to carry fares. Uber founder and billionaire Tavis Kalanick, who fancies himself an Ayn Rand revolutionary, prides himself on breaking laws he finds inconvenient
Uber, which is worth $51 billion, has gone from scandal to sandal owing to its refusal to perform criminal background checks on their drivers (after a number stole from passengers or physically/sexually assaulted them) or pay livery taxes or carry commercial liability insurance; their brutal exploitation of drivers; and their failure to protect passenger privacy.
Kalanick faces criminal charges in South Korea and Uber has been banned in France, Spain, Germany, Denmark, Netherlands and Denmark. It has also been banned (or severely curtailed) in Virginia, Maryland, South Carolina, Nevada, Miami, Philadelphia and New York City.
Task Rabbit was founded in 2009 by Leah Busque to connect “domestic freelancers” with customers needing tasks and errands done. It expanded to include all forms of temporary work (Walmart uses Task Rabbit, where it pays a 26% commission, as opposed to the 40% charged by conventional temp agencies).
The most controversial aspect of the Task Rabbit platform was the “bidding auction,” where “rabbits” competed with one another to provide the lowest bid for the service desired. After a storm of controversy Task Rabbit ditched the bidding auction in 2014.
*According to Forbes, the total value of the global System D economy is $10 trillion
**In sociology and economics, the precariat is a social class of people whose life is dominated by a total absence of financial predictability or security.
I had heard about Uber, but I knew nothing of these other scams.
It’s disgusting. Anything and everything to screw over the already screwed working class/poor.
This is one video I will be watching over the weekend.
Among young people under 40, both Airbnb and Uber are extremely popular. My daughter and son-in-law use Airbnb a lot and lots of their friends use Uber. Here in New Zealand, a fellow Green Party member use Airbnb – it’s deliberately mis-marketed as eco-friendly.
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I’m sure the same is true here.
Everything, when money is involved, is a scam these days!
Reblogged this on An Outsider's Sojourn II and commented:
The corporate rape of the working class, worldwide, continues unabated!
Thanks to Steven Hill, our suspicions of some “silicon valley startups” has been validated.
The business media fawn over the high valuations, billionaire status of the founders but Steven has articulated the cost, further disparity in distribution of work/labour units called US dollars/UK Pound/Chinese Yuan!
Is a billionaires work/labour worth 1000, 1000000 more than the precariat’s?
What projects would I fund if I could create out of thin air my own redeemable work units ($/£)?
Perhaps you could bottle clean air and market it. The stuff we’re breathing now is killing us.
I know you jest but there are “beings” that would create a business model on that human need instead of asking how we can clean the commons for everyone.
Reblogged this on An almanac for concerned citizens and boysenberry jam fans.
Thanks for sharing this, Dr. Bramhall. I’ve saved the video link to watch this weekend.
To be honest, I was pretty shocked. As ebolainfo states above, these silicon valley startups had us all bamboozled.
Good one Doc. Putting it on Tales. Thank you.
Thanks for reposting.
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You are welcome, but please post away!
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Wow heard of uber! Never knew AirbnB was a scam is quite nice really and have used it a few times oops 🙂
They (and the US business press) had lots of us fooled. Believe me.
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Reblogged this on 1EarthUnited and commented:
Thx Dr. B!