Raw Deal: How the "Uber Economy" and Runaway Capitalism Are Screwing American Workers, by Steven Hill, St. Martin's Press, 326 pages, $27.99
I've worked for Travis Kalanick for more than a year, but I've never met him. Technically, he's not my boss and I'm not his employee. I'm one of North America's 400,000 independent "1099" contractors with Uber, the company Kalanick co-founded and runs. In 2015, working in Pittsburgh three or four nights a week, I made nearly 2,200 Uber trips, carried more than 4,500 passengers, and put about 20,000 scratch-free Uber miles on my wife's 2013 Honda CRV. Subtracting expenses for gas and wear and tear on Pittsburgh's infamously potholed roads, I netted about $15,000 for the year.
This is the best part-time job I've had in a career of them. I have no bosses, I have no schedule, and I work when, where, and how long I choose. It's the perfect gig for an ex-newspaperman who's writing a book and whose income streams also include Social Security, a pension, and freelance writing. Every time I go to work, I know I'll pick up about 25 random, mostly under-30 people from Pittsburgh and around the globe who, sober or drunk, are happy to see me and, when asked, invariably express unconditional love for Uber.
Here in Pittsburgh, Uber is destroying the local Yellow Cab monopoly, one of the worst taxi companies in the country. It's getting drunk drivers off the roads in unknown numbers. It's energizing the city's nightlife. It has clearly been a boon for the city's young women, allowing them to move around safely, reliably, and affordably at night, alone or in packs of three and four. It has also created hundreds of part- or full-time jobs for Pittsburghers.
Steven Hill hates it.
Hill, a senior fellow at the New America Foundation, is the author of Raw Deal, a grueling sermon accusing Uber—and similar "peer-to-peer" businesses, such as Airbnb and TaskRabbit—of exploiting part-time workers and eroding the wealth and security of the American workforce. These so-called "sharing economy" companies connect the buyers and sellers of goods, services, and labor online. For Hill, the people who run them and the venture capitalists who fund them "have conceived of nothing less than a wholesale redesign of the U.S. workforce, the quality of employment and the ways we live and work." This powerful, diabolical, apparently conspiratorial new species of techno-entrepreneurs has planned "a dead end for U.S. workers, as well as the national economy" by creating what Hill dubs "the freelance society."
The grueling element of Raw Deal is Hill's argument, not his prose. He's a good reporter, a lively writer, and a skilled propagandist for the progressive cause. (The book has been blurbed by both Ralph Nader and Nation editor Katrina vanden Heuvel.) Raw Deal offers a dense, often provocative mashup of interesting facts, opinions, history, capitalism bashing, union worship, Internet startup tales, paeans to Euro-socialism, examples of both real and imagined workplace injustice, petty name calling, macroeconomic doomsaying, and more.
It's got working-class heroes and greedy corporate villains. It's got scary ideas, like the looming Economic Singularity—the author's belief that our economy will soon implode from too few jobs and too little consumer demand because techno-elites have captured the choice parts of our wealth for their private use. And it has an exciting 10-page ideological duel between Hill and a union organizer who has renounced her faith in traditional progressive politics and embraced a far more libertarian model of activism.
I had fun consuming this book in careful bits and chunks as I waited for Uber customers at the Pittsburgh airport. But as I defaced its margins with my commentary, I felt no freelance worker's pain except my own. Virtually all its grievances about the new economy seemed questionable, silly, or wrong.
The new economy goes by many names: the freelance economy, the gig economy, the do-it-yourself economy, the independent economy, the 1099 economy. Its partisans praise it for the incredible flexibility it gives to workers and the efficiencies and labor-cost savings it brings to businesses. Hill hates it for the same reasons.
The growth of the 1099 economy is hard to measure well; Hill arguably overhypes its growth. About 53 million of America's 145 million workers—36.5 percent—are officially categorized as temps, freelancers, independent contractors, and part-timers. That's only up from 31 percent in 2006, according to the Government Accountability Office.
Still, some economists predict that in a decade, half the work force will consist of these "contingent" workers. To Hill, this spells doom. He can't seem to imagine why a sane and smart person would voluntarily take a single part-time job, much less work two or three simultaneously. He doesn't approve of independent 1099 workers and freelancers like me, and he doesn't approve of the people who hire us. Ditto for temps, micro-entrepreneurs, non-regular employees, and part-timers of any kind.
It doesn't seem to matter to Hill how much money independents and freelancers earn, or how much they value the flexibility and convenience their part-time jobs or multiple income streams bring to their lives. To him freelancers are by definition exploited because they don't get employer-paid health benefits, aren't usually protected by a strong union (certainly not the conventional kind he likes), and don't have a strong corporate or government safety net to catch them when they get sick or lose their jobs to outsourcing or robots.
Hill's long-range goal is a new social contract—a "new New Deal," he calls it—that would replace the "raw deal" he says independent workers are getting now. According to Hill, the only way to truly tame "feral" capitalism and bring fairness to the new American workplace is for the federal government to import the best practices of Euro-socialism and make every business and worker abide by them.
So he calls for free health care for all workers. And paid sick leave, and free or subsidized child care. And job sharing, and profit sharing, and works councils. He wants the federal government to intervene more in medical care, strengthen its labor laws, make organizing a union a civil right, and use the federal tax code to "better distribute the aggregate wealth to benefit society."
His big idea, explained in detail, is a portable, government-mandated Individual Security Account for every worker in the country. Mimicking European legislation that prohibits companies from treating part-time workers any differently from full-timers, he wants companies that use 1099 workers to be legally required to add several dollars to each worker's hourly wage to pay for the worker's safety net. The extra labor costs, which he unconvincingly claims will be passed on to consumers without any noticeable pain, would ruin most of the incentive for businesses to use temps or freelancers. But that's kind of the idea.
In general, Hill wants the United States to enact a full roster of new regulations and redistributive policies that he says will "harness and steer" the new economy for the benefit of workers and consumers. But to get there, and to resurrect the New Deal–era "good jobs" workplace he misses so much, he needs to get past certain techno-villains standing in the way—people like Travis Kalanick. The Uber chief, Hill sneers, is an unapologetic "Ayn Rand capitalist" and "capitalist-cowboy" who flouts local transportation laws from New York to Seattle, resists what Hill considers common-sense government regulations, and tries to pay as little as possible in taxes—all capital offenses according to the progressive criminal code.
Hill's Uber hate is so strong that he can barely bring himself to give the company credit for creating a transformative new form of micro-transit that benefits millions of people around the world. Yet even he acknowledges that Uber's business model is doing society a favor by competing with the country's infamously awful cab companies. "Big Taxi," as he calls these iconic bastards of crony capitalism, is made up of corrupt, politically protected local monopolies that have screwed the public since the 1930s with lousy service, high fares, and crappy cars. Their chief victims have been minority neighborhoods and the carless poor. Taxi companies also regularly mistreat and exploit their drivers, who today are mostly independent contractors like Uber drivers.
Virtually everyone knows that taxi companies have been a national disgrace for decades. Yet there was no crusade spearheaded by Ralph Nader or cover story in Mother Jones aiming to take them down. Now Uber's law flouting is finally blowing up Big Taxi's monopoly and opening up urban transportation markets. Hill's poster villain of the new economy is using that "cowboy-capitalism" to do what progressives should have done decades ago.
Hill insists he's no Luddite. He assures us he's not against innovation and change. He swears he doesn't want to kill the entrepreneurial dynamism of the American economy. Yet he discounts the value of almost everything new economy companies do or make.
Amazon and eBay, for instance, started out fine in Hill's eyes by peddling used books and Pez dispensers for peanuts. But then their groovy "sharing" sentiment was corrupted by "raw" capitalism, and now they're just another faceless way for big businesses to make obscene profits by Web-hawking everything from groceries to pet-sitting services to (Marx forbid!) the labor of human beings. Hill offers the same complaint about Airbnb: It devolved from a hippieish no-charge couch-sharing club to a global corporate lodging giant that caters to rich property owners.
Hill is so focused on righting the alleged wrongs visited on exploited freelancers that he barely remembers the interests of consumers who want to be able to buy better and cheaper stuff. He never wonders or worries too deeply about the long-term real-world consequences of forcing employers to compensate every worker like a Hollywood union electrician. Will it increase unemployment rates, discourage new hires, put companies out of business, or raise the price of whatever they make or do to the point consumers will stop buying it? Don't ask, don't tell.
To his credit, Hill does find room in his rant for some ideological diversity. He brings in other voices who praise the gig economy or assure him that the market's creative destruction will continue to work its usual magic in the digital age. Others tell him not to worry about robots or high-tech automation destroying more jobs than they create. But Hill quickly downplays or rejects what they say.
Consider Sara Horowitz, the founder of the Freelancers Union, a nonprofit whose mission is "to create power in markets and power in politics" for the new economy's independent workforce. A former organizer for the Service Employees International Union, Horowitz has evolved in ways Hill finds tragic and traitorous. She no longer believes government action is the answer to everything, or almost anything. She has gone so far to the dark side that she has concluded the best way for her 300,000 members to get high-quality, affordable, and portable health insurance is to provide it for themselves.
To that end, Horowitz started the Freelancers Insurance Company in 2008. She has also built two primary care clinics in New York for her union's members; they have no copays and host events and classes.
For 10 pages, Hill critiques Horowitz's ideas about the new workplace. He gives her credit for what she has accomplished, but he is deeply troubled by her efforts to create a bottom-up, power-sharing economic model that essentially ignores government. Not only does her union not represent workers in negotiations, but it's not doing what he sees as a union's most important duty: teaching its members how "to wage a political struggle" and how "to be engaged citizens."
In turning away from government, Hill writes, Horowitz is playing into the hands of the evil Uberites by "letting economics corral our politics." For a professional progressive like Hill, it should be the other way around.