Commoditized Workers The Rise of On-Demand Work

Commoditized Workers The Rise of On-Demand Work

+ Winter  School  |  From  Uber  to  Amazon  Mechanical  Turk:    non-­traditional  labour  market  driven  by  technological  and  organizational  ch...

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+ Winter  School  |  From  Uber  to  Amazon  Mechanical  Turk:    non-­traditional  labour  market  driven  by  technological  and  organizational  change.    

Commoditized  Workers   The Rise of On-Demand Work Antonio  Aloisi,  Bocconi  University  

Agenda    

n  Sharing  is  the  new  renting n  The  matching  between  

labour  demand  and  supply     n  Crowd-­Work   n  How  to  dismantle  an  

atomized  market    

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From  ownership  to  membership     n 

“Invisible infrastructure” connects supply and demand of services and facilitate interaction between individuals and firms n 

«Coming  up  with  asolid  definition  of  the  sharing  economy  that  reflects  common  usage  is  nearly  impossible.    

When  I  posed  these  questions  to  a  few  sharing  innovators,     they  were  pragmatic,  rather  than  analytical»  [Juliet Schor, Debating the Sharing Economy, 2014]

n 

n 

Benefits: n 

UberX fees are, at least in principle, competitive with those of conventional taxi cooperatives,

n 

Airbnb landlords provide comfortable and low-cost housing solutions if compared to those offered by big hotel chains.

“Routine parts of knowledge work can be parcelled out to individuals” à it is like technology had “exploit[ed] the knowledge of enthusiasts” à “online talent platforms”

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All  we  need  is  sharing. Really?   Circumvent employment regulation, by operating informally in traditionally regulated markets [informalisation] Companies benefit thanks Opportunities for people to technologies that allow willing to find a job or to cutting transaction costs top up their salaries by outsourcing [flexibility] [computerization]

Global  trend  towards:     1. casualization of work 1.b  decentralization  of  structures     1.c.  creation  of  dispersed  production   networks    

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The  «gig  economy»     An  attempt  of  classification  (by  Valerio  De  Stefano)   n 

Crowd-employment / online freelancing (AMT, Clickworker…)

n 

Work on-demand via apps (Uber, Lyft, TaskRabbit, Handy)

n 

Profound differences, not a homogeneous group: n 

Virtual / concrete work n 

Clerical work

n 

Global / local execution

n 

Selection / “hiring” / competition

n  n 

Payment (bid/defined rate) Vertical vs. horizontal platforms

n 

Content of task and control

Differences   have  a  strong impact on legal issues such  as   liabilities  and   employment   reclassification!  

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Social  implications     n 

Facing a digital version of Taylorism, i.e. the efficient exploitation (or expropriation) of work at the detriment of education and skill development of workers à invisible

n 

n 

workers

Websites like TaskRabbit, Elance, Lift, Handy (“commodities market” vs “knowledge economy”) threaten to dismantle traditional labour markets as they do not seem to ensure a fair protection of workers’ rights

This new configuration implies wages fixed by a dynamic calculation of supply and demand, and every worker’s act constantly traced, appraised and “subject to the sometimes harsh light of customer satisfaction”

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“Employing  humans-­as-­a-­service”   Jeff  Bezos  said   n 

A preliminary definition, “crowd-working”: n 

“the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call”

n 

These tools have the potential to “chop up” a broad array of traditional jobs into detached tasks that can be allocated to workers just when they are needed à on-demand economy / workers on tap

n 

Legal issue: do workers of the on-demand economy continue to be independent contractors (not employees, in a word) even though many indicators reveal a disguised employment relationship (disproportionate presence of vulnerable players)?

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“Contingent  handyman”     n 

At the time of registration (“sign in”) the user needs to be aware to be part of a contract that creates a so pervasive system that can be considered akin to an independent legal system aimed at maximizing profits through tools such as processes design that reduces up to exclude the likelihood of disputes. n  “Click-wrap agreements” (or “click-through agreements”), binding guidelines which define a completely autonomous legal system. Used to disclaim warranties, restrict liability, indicate the applicable law and forum for dispute resolution; entering the website user can only…

þ  “I  accept”  à  in  the  long  run,  a  race  to  the  bottom?    

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Professionalization   “Underutilized  assets”   n 

Until recently, crowd-working has been like “hiring  a  neighbourhood  teen   to  mow  your  lawn  twice  a  summer,  but  on  a  grand  and  global  scale”  à  

n 

“The  sharing  economy  is  becoming  professionalized”, with 2 outcomes: the “sharers” (one who enjoys an onplatforms become demand system) become intermediaries (“middlemen”) in factual workers; charge of developing the network of connections and overseeing the property of transactions.

n 

Dozens of such firms have been established and announced to be the “Uber or Airbnb of X” (“X” = any good or service).

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Reputation  and  internal  ranking     n 

«While we totally distrust strangers, we totally trust people – significantly more than we trust corporations or governments»

n  Reputation  has  a  prominent  role:  all  these  exchanges  involve  

an  ex  post  evaluation  that  affects  any  subsequent  selections   n 

The selection process is orientated by the internal ranking, entailing moral hazard or determining a struggling in order to be recruited in the future

n 

The online platform keeps for itself, on average, 15% of the fee as commission and excludes all liabilities, in this way limiting its role to the activity of intermediary

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Insecurity,  the  price  for  flexibility   n  Uberizing probably means “trapping” a set of innovative procedures – geo-location, payments and driver management and distribution –

into an “app-accessible service” or a “sweatshop”, with lower entry barriers since people monetize resources they already own n 

Being full-time employed by a corporation or government agency could probably be the exception rather than the rule. New actors make the social-economic scene: independent contractors, freelancers, unconventional workers and micro-entrepreneurs [acceleration]

n 

Where to find new sources for essential worker protection measures like health coverage, insurance against injuries, paid vacations… n 

The “insecurity” (i.e. the erosion) of this kind of rights results in a potential dismal quality of social services rendered

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A  sense  of  community   n 

One should not underestimate the importance of

social  media  in  creating  a  “sense of community” (or a “fantasy of community in an atomized population”): n 

all these platforms use gadgets, instant marketing, and partnerships in order to engage people and get them involved towards these challenges between

“old/boring/institutionalized” and “new/amazing/entrepreneurial” n 

Just think of Lyft and to its logo: pink moustaches. “a brand identity and emblematize the touchy-feely spirit that Lyft has adopted as its credo. Drivers bump fists with their passengers at the end of each ride”. n 

Lyft drivers ask passengers to sit in the front “a more human vision for the service industry”.

n 

It is not for us to establish whether the idea is sincere or instrumental à effectual.

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Organizing  /  Unionizing?   n 

Workers will gather in communities where it is feasible to exchange knowledge and tricks. n 

The blog “Ride share guy” provides guidance and instructions to drivers on maximizing their income from the diverse car sharing marketplaces.

n 

“Peers.org” could be considered a “power-organizer”;

n 

n 

a system of pooling many accounts into one, organizing, caring, supporting participants in the sharing economy, both its freelance population

n 

Guilds like “Peers.org” and “Freelancers Union” are starting to engage in a struggle aimed at pooling bargaining power

n 

Making the sharing economy work for you à access promotional insurance

Platform  “cooperativism”  =  new  forms  of  solidarity  aimed  at  fighting   for  better  conditions  for  “cloud  workers”  and  vulnerable  workforce.  

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Amazon  Mechanical  Turk   The  picture     n 

AMT was started on November 2, 2005 – still beta version

n 

“AMT is the largest crowdsourcing platform, and has become the first stop for many individuals and firms seeking cheap, on-demand crowd labor”

n 

The platform allows the accomplishment of tasks amenable to being sent down a wire through APIs (i.e. Application Programming Interface).

n 

Amazon’s founder and CEO Jeff Bezos personally followed the project, n 

From the very beginning, this creature was treated as the spearhead of Amazon’s ventures,

n 

Named after an eighteen-century mechanical wooden device man shaped, with a turban, that could compete against human players at the game of chess (a dwarf was hidden and moved pawns from inside, so no technology at all). Maria Theresa, the sovereign of Austria, was told it was the first “robot” ever built.

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Amazon  Mechanical  Turk   Demography     n 

Around 500,000 “Turkers” (the internal definition for crowdworkers) populate AMT land n 

n 

from 100 countries around the world, with a strong prevalence: n 

of Americans [57%]

n 

Indians [32%], paid in rupees since 2007 à forced labour? n 

millions more fill up contender platforms like CrowdFlower, Clickworker, CloudCrowd and a heap of smaller ones.

n 

Requesters range from multinationals to family firms and start-ups.

The heterogeneity of Turkers is evident: “[they] are highly educated office workers with downtime, disabled persons or caretakers who are housebound, or felons passed over by more traditional employers”

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Amazon  Mechanical  Turk   Human  Intelligence  Tasks     n 

«It's  actual  humans  doing  stuff  to  the  Internet  that  you  think  is   automatic»  +  «You  put  some  input  in  and  you  get  back  a  result»

n 

These people are the “scaffolding” behind the Internet; their activities allow to kick start something online that everybody takes for granted

n 

One example of this is the case of a worker that completes HITs (HUMAN INTELLIGENCE TASKS) belonging to a work he would never have done if he had known it in its entirety (weapons design or spamming, for example).

n 

“Disembodied  HITs  can  deprive  people  of  the  chance  to  make   judgements  about  the  moral  valence  of  their  work”    

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Amazon  Mechanical  Turk   Activities   n 

Some workers handle tasks that are still too intricate for automation. In many cases, computers are still not able to achieve certain results – or they are not reliable as humans – or they “do not want to”. n 

from  copying texts to  translation,    

n 

from  data  transcription to  processing raw data,    

n 

from  participating in some experiments to  grouping items and labelling them,    

n 

from  identifying spelling errors to  hunting for email addresses,  

n 

“detecting a positive or negative bias in  an  article,    

n 

recognizing irony,    

n 

accurately  reading the text off a photograph  of  a  building,    

n 

determining  if  something is NSFW (not safe for work),

n 

discerning among ambiguous search results (…)”  

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Amazon  Mechanical  Turk   Building  a  marketplace     n 

Terms of use postulate that Turkers are independent contractors

n  Providers

are not “entitled to any of the benefits that a Requester or AMT may make available to its employees, such as vacation pay, sick leave, insurance programs, including group health insurance or retirement benefits”.

n 

Workers and Requesters are at the mercy of this agreement they have to accept if they want to enter MTurk’s dashboard.

n 

The mechanism also prevents parties from contracting freely outside the platform eventually shrinking their contractual freedom

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Amazon  Mechanical  Turk   AMT  Participation  Agmt.    

  n 

Amazon Mechanical Turk provides a venue for third-party Requesters and third-party Providers to enter into and complete transactions. AMT and its Affiliates are

not involved in the transactions between Requesters and Providers. As a result, we have no control over the quality, safety or legality of the Services, the ability of Providers to provide the Services to Requesters’ satisfaction, or the ability of Requesters to pay for Services. n 

We are not responsible for the actions of any Requester or Provider. We do not conduct any screening or other verification with respect to Requesters or Providers, nor do we provide any recommendations.

As a Requester or a Provider, you use the Site at your own risk. n 

As a Provider you are performing Services for a Requester in your personal capacity

as an independent contractor and not as an employee of the Requester.

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Amazon  Mechanical  Turk   The  FLSA  (Fair  Labor  Standards  Act)       n 

It concerns “employees” covered by labour laws such as minimum wage and antidiscrimination statutes.

n  Out-dated? n 

1938

The definition of employee, the only addressee of the regulation, offered by the FLSA is unfortunately narrow and perilously meaningless:

“any individual employed by an employer”. n 

AMT “label” is out of scope of any labour legislation covering employees:

n 

the National Labor Relations Act (NLRA), Title VII of the Civil Rights Act and related anti-discrimination legislation, the Family Medical Leave Act (FMLA),

n 

the Occupational Safety and Health Act (OSHA).

n  n 

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Amazon  Mechanical  Turk   Labels  are  not  dispositive   n 

In the U.S., as well as in many European countries (like Italy), labels placed by the parties are not dispositive at all.

n  The

classification imposed by terms of use could be deemed as incorrect.

n 

As a consequence “vendors will not necessarily insulate firms (or the vendors themselves) from liability”

n 

Supreme Court:“[w]here the work done, in its essence, follows the usual path of an employee, putting on an ‘independent contractor’ label does not take the worker from the protection of the Act. 95”

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Amazon  Mechanical  Turk   “Multifactorial”  test     n 

Whether a worker is an employee or a contractor depends on a “multifactorial” test based on the facts emerging from the employment relationship. the possibility of having free personal judgement and control over one’s own work, n  the way in which tasks are performed, n  the power of termination, n  the “economic realities” and the concrete dependency in relation with the employer, n 

the permanency of the relationship, n  the number of working hours, n  the power of direction exercised by the employee, n  the freedom of managing its own time schedule, n  the ownership of equipment, n  the method of payment (hours vs project), n  the degree of flexibility and protections, n  the disparity of relative bargaining power. n 

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Amazon  Mechanical  Turk   An  attempt  to  organize     n  Turkopticon a potential source of worker organizing in virtue of class-

consciousness “an activist system that allows workers to publicize and evaluate their relationships with employers”. n 

n 

The website permits Turkers “to engage one another in mutual aid”.

Researchers put a provocative task on the platform, asking workers to define an ideal “Workers’ Bill of Rights” from their point of view.

n  Dynamo a community founded by scholars, which could be seen as the first step toward granting Turkers a collective voice. n 

This trend deserves attention, as Providers are a platform’s fundamental economic inputs, for this reason alone they should be protected, though AMT can tolerate the loss of accounts that do not accept the system’s terms.

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Uber  (UberPop)     The  picture   n  The

most renowned ridesharing company. Founded in 2009, it now operates in 53 countries and “had sales exceeding $1 billion in 2014 and a valuation of $50 billion”

n 

According to Brugel, it “is currently one of the fastest growing start-ups worldwide”

n 

Thought for a population equipped with smartphones and used to pay with credit cards and through online bank account or PayPal account

n 

It could be also seen as a way of making urban mobility less congested, clearing roads from private vehicles and letting parking spots free.

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Uber  (UberPop)    

Information asymmetries   n 

The reduction in information asymmetries seems evident, as ridesharing companies’ dependence on digital technology provides riders with a “better overview of quality and prices” (privacy?)

n 

Much worse is that it also leaves the field wide open for discrimination, since drivers could ignore requests if they don’t like a pick up place or a destination request. n 

Aversion towards taxis often represents the best advertising for ridesharing companies

n 

Application of the technique of price surge.

n 

While the user has a potentially complete knowledge of drivers and fees, the driver could ignore characteristics of his costumer.

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Uber  (UberPop)     How  it  works  #1   n 

n 

n 

After downloading the mobile app and creating a personal account, every user can request the nearest available Uber using a GPS to pinpoint the driver’s position. To become a driver “partner” one must complete Uber’s application process, providing its driver’s license information, as well as evidences about its vehicle’s registration and insurance. n 

You do not need to prove special requirements (apart the age of legal majority)

n 

They do not necessarily have signed a business insurance.

Aspiring drivers could be required to pass a “city knowledge test” + interview: n 

n 

On the contrary, critics object that drivers lack of appropriate training and experience of extensive driving. Checking drivers’ criminal background? NO. Training à https://youtu.be/makYbqd7mGA

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Uber  (UberPop)       How  it  works  #2   n 

The company maintains to be simply an arena, an “eBay for gigs”

n  Uber

works as a matching platform and gets revenues thanks to a 10-20% cut from each ride (tipping is forbidden)

n 

Uber should not be regarded as a technological business since its revenues do not depend on the distribution of its interface (amount of rides generated)

n 

But it cannot be considered light-heartedly as a transportation firm as “the company does not provide transportation services, and has no liability for services provided by third parties”, at least according to its terms and conditions.

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Uber  (UberPop)     How  it  works  #3   n 

n 

Uber claims not to be a transportation carrier (technological service): n 

“The quality of the transportation services requested through the use of the APP or the Service is entirely the responsibility of the Transportation Provider who ultimately provides such transportation services to you. Uber under no circumstance accepts liability in connection with and/or arising from the transportation services provided by the Transportation Provider or any acts, actions, behaviour, conduct, and/or negligence on the part of the Transportation Provider.”.

n 

Many  similar  cases  concerning  Uber  drivers  have  been  recorded,  from  creepy  sex  text   stalking  to  kidnapping  and  allegedly  raping  a  passenger  to  killing  a  young  girl.    

Drivers are supposed to be independent as for managing

their time and deciding when turning their own car into a taxi – the operation consisting in being online or offline on the app. n 

Uber controls and supervises both the methods and means of its drivers’ provision of transportation services.

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Uber  (UberPop)     5  stars  monitoring  system     n 

n 

The drivers’ behaviour has a direct impact on the rating according to which they will get the chance to be recruited again in future à exercise control Riders con rate the ride, evaluations ranging from

1 to 5 stars. If the rate falls below a certain threshold, the driver could

lose access to Uber application (termination) (Is account deactivation a new soft form of dismissal?) n  n 

n 

“Uber and Lyft are exercising employer-like control over termination decisions” Uber can also use the star ratings as a means of enforcing specific rules:

i.e., cleanliness, beverage to be served, how to dress

This system leads to “frenetic self-marketing campaigning” + “emotional labour”: the inexhaustible effort to please customers with “binding smiles” .

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Uber  (UberPop)     Workers  (mis)classification   n 

Uber, but also Lyft and other ridesharing companies, are blamed for (mis)classifying their drivers as independent contractors.

n 

“The label placed by the parties is not dispositive, and subterfuges are not countenanced”

n 

Costs and risks associated with hiring employees are higher than those derived from employing independent contractors.

n 

In a class action lawsuit brought against Uber, the California Federal Court stated that Uber drivers were right. They had sued the platforms alleging violations of the California Labor Code, and arguing that they were actually employees under California law although they were denied the relevant benefits and protections such as minimum wage, reimbursement for expenses, overtime...

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Uber  (and  Lyft!)     Judge  Chhabria’s  reasoning     n 

“At first glance, Lyft drivers don’t seem much like employees. We generally understand an employee to be someone who works under the direction of a supervisor, for an extended or indefinite period of time, with fairly regular hours, receiving most or all his income from that one employer.

Lyft drivers can work as little or as much as they want, and can schedule their driving around their other activities. (side activity, little extra income) n 

But Lyft drivers don’t seem much like independent contractors either. We generally understand an independent contractor to be someone with a special skill (and with the bargaining power to negotiate a rate for the use of that skill), who serves multiple clients, performing discrete tasks for limited periods, while exercising great discretion over the way the work is actually done. Their work is central to Lyft’s business. Lyft might not control when the drivers work, but it has a great deal of power over how they actually do their work, including the power to fire them If they don’t meet Lyft’s specifications about how to give rides. And some Lyft drivers no doubt treat their work as a full-time job—their livelihood may depend solely or primarily on weekly payments from Lyft

n 

Indeed, this type of Lyft driver looks very much like the kind of worker the California Legislature has always intended to protect as an ‘employee’

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Uber  (UberPop)     Borello’s  reasoning     n 

A federal judge in San Francisco“Plaintiffs are Uber’s presumptive employees because they ‘perform services’ for the benefit of Uber”.

n 

The decision contains an enumeration of indicia of an employment

relationship like the presence of a “right to control work details” (in the light of the doctrine of respondeat superior: “not how much control a hirer exercises, but how much control the hirer retains the right to exercise”) or the fact that Uber “depends on its drivers’ performance of services for its revenues”. n 

The court rejects Uber’s self-definition as a mere “technology company”, since the argument is too formalistic and omits an analysis of the substance of how Uber actually works.

n 

As for the “right to control” test, Uber’s “Driver Handbook” is clear and asks drivers to accept all ride requests, also rating their readiness and availability.

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Uber  (UberPop)      The  multi-­part  test       n 

This multi-part test scrutinizes the presence of these factors: -

I. 

II. 

III. 

whether the business provides the tools to perform the job; whether there’s a right to control how the worker does V.  whether a written agreement his job; exists classifying the worker whether a worker has set as an independent contractor hours or can work whenever or employee; he or she wants; VI.  the permanency of the relationship; how the worker is paid i.e., by the hour (which points toward VII.  whether the work requires a employment) vs. by the job special skill; (which points toward an VIII.  whether the services rendered independent contractor are an integral part of the relationship; employer’s business. IV. 

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To  sum  up •  • 

• 

Terms & conditions Independentcontractor clause Multifactorial test

• 

Primacy of fact • 

Tech company vs transporation company

Presumption of employment •  Right to control • 

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Conclusions       n 

The “e-topia”, apparently driven by an altruistic spirit (like the Wikipedia), could eventually take the risk of turning into a social spirale  descendant   when risks  traditionally  borne  by  firms are being “pushed  back”  on  to   individuals  à  “precarious employment”

Pro     app

Pro   r     ke wor

Uber/ATM = little more than a marketmaker / a forum for buyers and sellers

Uber/ATM = exercise considerable control over workers

“The  jury  will  be  handed  a  square  peg  and     asked  to  choose  between  two  round  holes.”  

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Conclusions       n 

“Rather than forcing workers to litigate the issue of employee status on a case-by-case basis, policymakers could provide for direct, automatic coverage of on-demand workers under core labor laws”

n 

Some  on-­demand  firms  will  choose  to  classify  their  workers  as  employees   à  Alfred + Instacart, a grocery delivery service, have

invited some of its freelancers to be part-time employees. n  Provide

a social  safety  net  to  people  whose  chosen  form  of   work  is  something  other  than  full-­time  employment. n 

Health coverage, insurance against workplace injuries, paid vacations and maternity leave: these have long been universal entitlements in many economies. They should not become exclusive perks for a dwindling band of salaried employees (Arun Sundararajan)

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Open-­ended  questions   n 

Tthese  workers  have  become  invisible.  Virtual  does  not  mean  exploitable.    

We need to offer better protection   to what is behind the scenes of on-demand economy n  Platforms and apps: improve and humanize the model, building technology seamlessly in tandem with workers’ rights. n 

Lyft has signed a partnership with Freelancers Union, offering possibility for its drivers to enter the pressure group’s health plan and benefit plans.

n  Law-makers: dynamic potential cannot be hindered by strict and out-dated rules limiting sharing economy; regulations have to protect both users and workers.

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Open-­ended  questions   n  “Sharing” =

“an equitable split in wealth and responsibility” §  tighten  up  international  codes   of  good practice  and  make   worldwide  firms  sign  and   respect  them;;   §  reduce  up  to  eliminate   discrimination  based  on   geographical  preferences  or   rating  charts;;   §  avoid  and  hinder  child labour or forced labour;;  

§ 

§ 

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prevent  “labor brokerage”   from  shifting  into  “social   arbitrage”  (Hill,  2015);;   make  their  rating “portable” across platforms,  leading  to  a   unique  and  official  “digital   identity”;;   overcome  the exclusivity clause that ties workers to a special service;;   ensure better protection to   whom  is  behind  the  scene  of   the  sharing  economy.  

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Thank  you!     @_Aloisi  

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