The Workers' Paradise A Discussion of Workers Cooperatives and Building the New Economy

September 1, 2014

We Need to Reclaim “The Sharing Economy”

There has been a lot of discussion of late regarding the so-called “sharing economy”. This phrase refers, generally, to organizations such as Uber, Lyft, AirBnB, and others that provide an on-line broker service so that people can monetize practically everything in their life. The term sharing economy is a great marketing ploy to suggest that this practice engages the voluntary actions of the participants who just want to earn a little extra money from their assets. On the face of it, it makes a lot of sense–if someone wants to pay me $10 bucks to use the lawnmower that I am not using, why not? If I can give someone a ride to work on my way to work and it pays for my gas, that is a great deal and I am helping out a fellow human who may need that ride due to lack of access to public transportation or a personal vehicle. However, that isn’t what these organizations are really doing and I would argue that the the people engaging in it do so because they are rather desperate in a late-stage capitalist economy taking full advantage of having largely crushed the labor unions.

The New York Times recently ran a “balanced” article chronicling the days of a couple of workers. In this article, the workers seem content and like the variety and hustle-and-bustle of the life of managing multiple phone apps, 10-14 hour days, and not being able to spend time with their family to earn about $10 an hour after self-employment taxes and expenses. They would probably be better off with a menial minimum wage job, but that would limit their total hours or require them to maintain multiple jobs such as the women who recently succumbed to fumes and died while taking a rest break in her car. The non-sharing economy doesn’t have a lot to offer to workers today either.

Maureen Conway, of the Aspen Institute, sums up the reality of this new effort by capitalists to avoid any responsibility to the communities from which they extract wealth:

“In the end, the sharing economy is nice words for what is really more of the same. More money going to business profits held by a few, and less money going to the labor income that is the primary means of support for most Americans. What we need is a sharing economy in which working people share in the wealth that their labor creates. Unfortunately, this version of a sharing economy does not promise that. “

The “sharing economy” is about workers “sharing” their labor and capital with venture capitalists for a percentage while also accepting 100% of the risk (expenses, accidents, taxes, etc). This isn’t a new effort. Last week, (August 27, 2014), a Federal Court finally ruled in a long-running dispute that FedEx improperly classified many of its employees as “independent contractors”. FedEx has tried to claim that its drivers were independent contractors mainly because it has shifted most of the expenses on to them (they have to buy the truck, rent the equipment to track deliveries, etc). I remember one argument that FedEx made in a similar case that is still to be decided that the drivers could use the truck to run other deliveries provided that they removed all the FedEx decals first and then reapplied them in time for their next shift. Seriously. Had FedEx won this case (and it might still go to the Supreme Court), it would have been a watershed moment that would essentially bring us back to the early days of 1800. What company wouldn’t love to reclassify its workers as independent contractors and immediately save on payroll taxes plus other items? However, that is essentially what the sharing economy is hoping to do.

There is a real sharing economy, however. It has existed (as an on-going concern) since 1844 and in different forms for many years before that such as the first mutual insurance company founded by Benjamin Franklin in 1752. Cooperation brings people together to share their capital for the common good. Instead of groups such as Uber or AirBnB in which people provide their labor and capital to provide wealth for a third party, the labor and capital provided to a cooperative benefits the users of the cooperative–the members. Further, in the true concept of sharing, democratic decision making allows the opinions of the different people sharing to be expressed on an equal basis (Uber, Lyft and others essentially present the terms of service to the workers and either they accept or quit working for them). Any surplus generated from the cooperative sharing economy gets distributed according to the inputs into the enterprise.

One thing that Taskmaster, Favor Delivery, Lyft, et al have pointed out is that a market exists for connecting people with others. This can and should be done in a cooperative format that doesn’t exploit the people providing the labor. Dane County Timebank has made a start, but seems to come up short. This needs to be national, it needs to be modern (phone apps), it needs to engage more than bartering. I realize that Timebank seeks to demonetize society as a key part of its mission–it is all about getting off of the currency addiction. Unfortunately, for many working people, money comes in pretty handy. Landlords don’t accept barter and neither do health clinics, gas stations, and a host of other places that provide vital goods and services. Until they do, a “sharing economy” needs to provide the means for people to earn a decent a living and maintain a quality of life.

Cooperatives need to reclaim the concept of the “sharing economy”. We need to help people struggling to find work, make ends meet, and otherwise seek their dreams understand that they don’t have to rent out their bodies and everything they own (is their a site where someone who likes parenting, but doesn’t want the hassle of a full-time kid, rent somebodies child for an afternoon?). Cooperatives (worker, consumer, producer and financial) need to challenge these profiteers by helping people combine their resources to create dynamic cooperatives that can provide the things that the “sharing” apps provide which is essentially services for people who need them.

There is also a role for labor unions. SEIU, CWA, USW have all been engaging worker cooperatives of late. This “new” economy offer them a real opportunity as well. Through the creation of a “union coop” of drivers, they could help Uber and Lyft workers negotiate better terms. This would be similar to the Campbell’s union drive in which Campbells’ claimed the farmworker’s conditions weren’t their responsibility since Campbell’s only contracted with the farmers and didn’t employ the farmworkers. Unions could also organize the “favor” workers to negotiate better terms. There really isn’t anything new in the “sharing economy” model, but it needs a response.

Sharing constitutes the basis of cooperative life and economics. As cooperators, we share our labor, our capital and our knowledge with each other to create a resilient and sustainable economy and environment. Over the years, many times, the selfish economy have borrowed our ideas to advance their personal goals. Today, the investor class corrupts the very concept of being a good neighbor by using the noble concept of community to extract wealth in a one-way relationship. Cooperatives have always offered an alternative to the selfish economy but have generally operated under the radar. We need to stop doing that. We need to quit being the world’s best kept secret. We need to claim the “sharing economy” as the “cooperative economy”.

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