Recently, I have come across an HBR article by Li Jin, Scott Duke Kominers and Lila Schroff, about the possibilities of gig workers and content creators to create a labor movement and fight for their rights as workers. The article mainly details the forms of collective labor activism tailored to the gig and creator economies, which they call Decentralized Collective Action (DCA).
According to current laws, gig workers and content creators are classified as “independent contractors”, which means that the platforms they are active on is not required to provide these workers with benefits, protections and guarantees that regular workers enjoy. However, platforms have a huge control over the working conditions of these people, as they design the algorithms that impact their revenue, have the possibility to moderate or even remove their intellectual property and can also decide on the fees they receive for their work. All these conditions make these workers subject to exploitation with little chance to change their conditions unless they manage to unionize effectively and engage in DCA.
The main problem is the asymmetry between the workers’ dependence on the platform, and vice versa. Since data portability – that includes user data and market data – is difficult between platforms, the switching costs for gig workers when changing platforms is quite high. Also, the positive network effects on the largest platforms make it hard for their competitors to be able to offer a similar level of service. Meanwhile, the platforms themselves are not that dependent on gig workers – at least not on individual ones. Maybe the ones with the largest influence would have the power to force out some changes, however, they are usually happy with the status quo as it usually fits their interests.
It is interesting to see how the emergence of new digital business models redefine many different aspects of society. Surely, some major legislative changes in worker rights, tailored to gig workers and content creators are coming. But changes are also to be expected on the business and technology side. As the platform economy is likely to stay for a while, it is important to note a few things that future entrants should include in their offering in order to be able to compete with incumbents:
- Be more transparent with creators about the working mechanisms of the platforms (e.g. algorithms)
- Invest a larger percentage of revenue in their workers and avoid exploitation
- Support new and smaller creators in reaching their audience
- Provide creators more control over the revenue they generate through the platform
- Provide creators more control over their intellectual property available on the platform, and reduce the control of platform owners
If new players emerge with these worker-friendly aspects in mind, incumbents will have no other choice but to adjust their policies as well, creating a process that will inevitably result in improved working conditions for these new types of workers.