(Dis)embeddedness and (de)commodification: COVID-19,Uber,and the unravelling logics of the gig economy

Abstract

The ride-hailing giant Uber has long circumvented labour regulations and commodified its drivers’ labour by existing at the conjuncture of multiple geographies – being simultaneously embedded and disembedded from the places where it operates. In this commentary, we argue that the COVID-19 pandemic has destabilised Uber’s ‘conjunctural’ existence and forced the company to become more embedded in the locations where it operates, bringing about a – perhaps temporary – turn towards the decommodification of its drivers’ labour.

Introduction

Over the past decade, the world has seen a mushrooming of digital labour platforms in sectors ranging from transportation and logistics to care work, pet-sitting, and more. These ‘gig’ companies digitally match self-employed service providers with customers, setting the price and commission in the process. In doing so, the companies look to create an artificial distance between their platforms and the labour of service delivery, positioning themselves as ‘technology companies’ and ‘digital marketplaces’ in the business of connecting people, rather than taxi or delivery companies. Using this status, platforms tend to classify gig workers as ‘independent contractors’ rather than ‘employees’, depriving them of employment protections like minimum wages and sick pay. In addition to circumventing labour laws, platforms also tend to disembed themselves from the tax jurisdictions of the localities they serve, leaving treasuries short-changed.

As COVID-19 turns the world – and the world of work – on its head, gig platforms’ strategy of disembedding from local norms and regulations has become harder to sustain. In this commentary, we explore this shift through the example of Uber’s ride-hailing platform. ¹ On account of social distancing measures and lockdowns, the supply of available gigs has dried up, leaving Uber drivers without a vital income stream. Under mounting public pressure, Uber has announced measures that loosely resemble modest employment benefits, including limited paid sick leave. This constitutes a substantial departure from the company’s usual position that it does not ‘employ’ drivers, and that it is therefore not obliged to provide any benefits.

This commentary uses the lens of ‘conjunctural geographies’ to explain Uber’s reaction to the COVID-19 pandemic. Graham (2020: 1) argues that the company evades local regulations by tactically deploying ‘conjunctural geographies’ – that is, ‘a way of being simultaneously embedded and disembedded from the space-times…[it] mediate[s]’. We then argue that COVID-19 has forced the company out of this conjunctural existence by compelling it to – at least temporarily – face up to the precarity of its drivers’ work.

Strategic disembeddedness and the commodification of labour

Uber’s current market capitalisation is an astronomical $US56 billion, with its ride-hailing platform being available in more than 900 cities worldwide (Uber, n.d.). It has become an entrenched feature of urban life, and practically synonymous with the gig economy. Graham (2020) argues that it has achieved this distinction by selectively existing at the conjuncture of multiple geographies (i.e. being simultaneously embedded and disembedded from the places where it operates).

On the one hand, by mediating flows of both people (drivers and riders) and capital, Uber contributes to the daily making and remaking of local economic geographies, and is undeniably embedded into the fabric of the cities in which it operates. It also wields immense power over the lived experiences of its four million drivers, determining their access to work, working conditions, and remuneration (Rosenblat, 2018).

On the other hand, without exception, Uber strives to disembed itself from those same cities by evading local regulations, particularly labour laws, which would require it to provide drivers with minimum standards of pay and working conditions. A Californian court’s decision summarises Uber’s position:

Uber bills itself as a ‘technology company’, not a ‘transportation company’, and describes the software it provides as a ‘lead generation platform’ that can be used to connect ‘businesses that provide transportation’ with passengers who desire rides…Uber notes that it owns no vehicles, and contends that it employs no drivers…Rather, Uber partners with alleged independent contractors. (O’Connor v. Uber Technologies, 2015)

Using this framing, Uber denies its drivers basic employment protections like minimum wages and sick pay. The company’s claim that it is nothing more than a marketplace has drawn many legal challenges across jurisdictions. In a well-known example, a South African court – while agreeing that the driver plaintiffs were owed employment benefits – was unable to rule in their favour as their contract was with Uber International Holding B.V. (a Netherlands-based company), which the court did not have jurisdiction over (Graham, 2020). Here, Uber prevailed by retreating to a place that its South African drivers could not conceivably reach. Unsurprisingly, these tactics have been challenged, and the company has in recent years found itself engaged in an intractable spatial tug-of-war with workers, unions, and regulators – all seeking to institutionally tether it to the localities in which it operates.

By disregarding local employment regulations, Uber treats its drivers’ labour power like any other tradeable factor of production rather than a human quality. This results in ‘working conditions that are harmful to the very people who embody that labour’ (Wood et al., 2019: 935). As such, Uber strategically straddles the local and non-local in ways that benefit the company but disadvantage its workers. For drivers, Uber’s conjunctural geographies have entailed the commodification of their labour power – denying them fundamental employment protections.

COVID-19: A turn to embeddedness and decommodification

Although gig platforms can evade local responsibility by harnessing conjunctural geographies, they remain vulnerable precisely because of the moments of embeddedness inhering within their models (Graham, 2020). That embeddedness provides a pathway to encoding local accountability into the gig economy’s script. For all the immeasurable human tragedy brought on by the COVID-19 pandemic, it has also made clear that platforms like Uber are inextricable from the local by reminding us of the materiality of the bodies they govern. Now, the prospect of hailing ‘an Uber’ is fraught with life-threatening risk.

The earnings of ride-hail drivers have plummeted in the wake of COVID-19-related social distancing measures and lockdowns (UCSC, 2020). And government schemes for the self-employed – where present – have been criticised for inadequately addressing gig workers’ needs (Belger, 2020; Romo, 2020). Many Uber drivers have therefore had to continue working through the pandemic, risking both themselves and their customers (UCSC, 2020). In consequence, Uber has come under substantial pressure from regulators, driver advocates, and the media to safeguard drivers and mitigate public health risks (Bellon and Balu, 2020). Whether with an eye to its reputation, or its bottom line, Uber has found it impossible to ignore these demands.

The company’s response has involved a substantial deviation from its modus operandi. Most significantly, on March 7, 2020, it implemented a global financial assistance policy to support drivers diagnosed with COVID-19 with up to 14 days of paid sick leave (Kerr, 2020). After criticism of the policy’s limited coverage to those formally diagnosed, Uber expanded the policy’s scope on March 15 to include drivers required to self-isolate by a medical authority, and then on April 17 to include drivers with pre-existing conditions. This policy was not without flaws, with drivers reporting that the payment was inadequate, that rollout has been delayed and patchy, and that it involved onerous qualification conditions, such as consenting that the payments would not change their employment status (Sonnemaker, 2020).

Following a lawsuit in May, the company announced additional financial support for its (Californian) drivers, over and above its global sick pay policy (Rosenblatt, 2020). California has already proved especially tricky territory for Uber in the past year. Indeed, the state’s recent AB5 law (that would see gig workers receive employee status) presents an existential threat to the company’s business model. Aware of this risk, and in reaction to COVID-19-related pressure, Uber’s CEO took a further step away from the company’s ‘We are a marketplace’ stance in mid-May, outlining a middle-ground vision where Uber could pay for American drivers to receive healthcare benefits commensurate to hours worked (Bellon and Balu, 2020).

For a company that has repeatedly insisted that it does not ‘employ’ its drivers, these provisions represent an about-turn. They implicitly acknowledge that Uber has significant control over the conditions, health, and even survival of its drivers, making it far more than the proprietor of a digital marketplace. By guaranteeing its drivers a minimum standard of living (via paid sick leave) during their absence from the gig marketplace, Uber is contributing – if only partially – to decommodifying their labour. COVID-19 has thus destabilised Uber’s ‘conjunctural’ existence, bringing about a turn towards its regulatory embedding, and the decommodification of its drivers’ work.

Conclusion: What next?

The pandemic has destabilised Uber’s control over its conjunctural geographies by highlighting the myriad tethers that materially embed it to people and places. By instituting employment protections in response to the pandemic, Uber is finally admitting responsibility over drivers’ material conditions, and demonstrating its capacity to improve them. It follows, then, that Uber can act similarly outside moments of crisis too. The virus is only the newest hazard for drivers, but financial and health risks have always been a part of the job. Dangerous and precarious work conditions – pandemic or not – are the result of a choice Uber has been making, one that it has now shown it can unmake.

Uber is aware that the pandemic has nudged it onto a slippery slope. Its COVID-19 policies – even if insufficient and disingenuous – could cause it to become embroiled in further allegations of employment misclassification that threaten its entire business model. Its ability to selectively embed and disembed itself from the local has meant that its COVID-19 measures have been reactive and piecemeal. However, there is a deeply contradictory logic in a company shouldering some responsibility for physical risks to workers, on the one hand, while insisting on the other that it bears no such responsibility.

When the current crisis eventually subsides, we cannot return to a world in which gig economy platforms can confer and retract employment protections at will. Researchers and policymakers must therefore learn from this pandemic to develop ways to institutionalise durable protections for all gig workers, regardless of their employment classification and location. Ultimately, what must drive us is the principle that the labour that underpins the gig economy – like all labour – is not a commodity, and must therefore be accorded the dignity and respect due to it.