Gigs North and South

Abstract

This commentary investigates platformization in global south and global north labor markets, arguing they are linked via a process of uneven and combined development. Focusing on platformization in India and the United States, we briefly describe long-standing patterns of formal and informal labor in the United States and India, which prepare the ground for the 21st-century explosion of gig platforms. We conclude by returning to the global scale of uneven and combined development, drawing on contemporary Indian Marxists to explain the global spread of gig platforms post-2008 as a global financial response to the political problem of surplus workers within premature deindustrialization.

Introduction

Following the 2008 financial crisis, gig platforms—semi-automated digital brokers for intermittent, online, or offline labor—spread across the globe. They were greeted with great enthusiasm from the central organs of global finance and politics. In the Global North, the recession wiped out household wealth and middle-wage jobs, leading to a decade of slack labor markets (Addo & Darity, 2021). A 2013 Thomas Friedman column described the “sharing economy” as “a new avenue for the middle class to create wealth and savings.” “These entrepreneurs are not the only answer for our economic woes . . . but they are surely part of the answer.”

In the Global South, the crash accelerated a long-term trend of “premature deindustrialization,” that is, stalling or shrinking shares of formal industrial employment and growing informal employment, even in contexts where industrial output grew in absolute terms. This picture starkly contrasts with dominant theories of economic development that depict a mature industrial economy as a stage completed prior to the growth of a service economy, with individual and national wealth increasing at each transition (Diao et al., 2019). Mass smartphone adoption appeared right as more and more countries seemed to, against their leaders’ best efforts, depart from the “development” script. Those leaders embraced the gig economy as a potential savior for the global majority. According to Suman Bery, Vice Chairperson of Indian state think tank Niti Aayog, “India’s twin advantages of having a favorable demographic structure and the rapid proliferation of digital technologies position it to be at the forefront of this economic revolution” (Niti Aayog, 2022).

Critics brought these myths down to earth. But their stories remain geographically segregated. Uber, we learn, does not free Americans to make extra cash but destroys the postwar dream of the 40-hr-per-week job. Ola, we learn, does not secure a future for Indian drivers but traps them in a cycle of debt. But there is only one global economy. Our challenge is to think of gigs north and south together.

We focus on India and the United States. Platformization, of course, differs across labor and regulatory contexts. The largest gig platforms emerged first in the United States and expanded quickly, while, in comparison, Europe’s more formalized labor markets and more powerful labor unions provided a greater regulatory brake. In India, platforms fueled by global financial capital filled gaps in the welfare state project. While Gulf nations are not short on capital or masses of noncitizen workers, they have a smaller group of middle-class consumers hungry for McDonald’s deliveries. North or South, platforms formalize informal work by rationalizing the work of independent operators via algorithmic restructuring and connecting their micro-transactions to global financial markets. In the United States, which developed a mature industrial economy prior to the shift of employment share to services in the 1970s, critics describe digital platforms as engines of informalization, that is, Uber turns taxi jobs into gigs (Ravenelle, 2019). This is a narrative of decline, where the postwar gains of Keynesian governments and industrial labor unions are destroyed by highly capitalized software developers playing regulatory arbitrage.

India never fully industrialized, especially in rural areas. Here, a vast, long-standing informal labor market of cash-only, labor-intensive, unregulated work in transport, domestic service, and food preparation is formalized by labor platforms. Firms like Ola and Urban Company take work previously marginalized by the Indian state and capital and institutionalize new regulatory and financial regimes for it at the point of the smartphone (Raval & Pal, 2019). As India grapples with a shrinking industrial share of employment, it has turned to services to create more jobs. Platformization is one such avenue, predicated on job growth without welfare state growth.

This appears to be a simple case of labor market convergence: The Ola driver and the Uber driver do the same work; their lives slowly become equally precarious. But this is not a simple story of capital flattening the globe. Rather, it is a new case of uneven and combined development: Labor platforms formalize informal work everywhere, introducing similar labor processes, but the engine for this process largely remains Northern financial capital, and the results differ depending on the state’s history with its surplus populations.

In what follows, we briefly describe the formal and informal labor markets in the United States and India and the relationship between them and gig platforms. We conclude by returning to the global scale of uneven and combined development, drawing on contemporary Indian Marxists to explain the global spread of labor platforms post-2008 as a global financial response to the political problem of surplus workers within premature deindustrialization.

Gigs North

The “informal economy” became an object of development for Global North institutions during the Cold War. It was defined largely in the (racial) negative: The Asian, African, and Latin American shadow of developed, industrial capitalism, where self-managed craft industries, often based out of the home, without firm bureaucracy or state regulation, received subsistence incomes in cash and produced textiles, food, sex, and drugs (Breman, 2014). This just-so story obscured the informal work accompanying every stage of capitalist development.

In the Global North, informal labor, often from women and children, was an essential input to the first and second industrial revolutions (Gray & Suri, 2019). Workers at home prepared textiles, foods, and other commodities for factory processing. This putting-out system worked on piece-rates, what Marx and Mandel (1992) called “the form of wage most appropriate to the capitalist mode of production”; both because piece-rates force the laborer to manage themselves and because, via subcontracting, they “facilitate the interposition of parasites between the capitalist and the wage-laborer.” Sound familiar? Platform labor has brought piece-rates back to the leading edge of capitalist development in the United States and Europe. This informal precarity was never novel to workers outside the industrial workforce of the imperial core.

But platform work is not simply putting-out redux. Contemporary inequality and labor market fragmentation are not a return to the Gilded Age but a novel phenomenon built from the ruins of postwar industrial solidarity (Winant, 2020). In the United States, most platform workers are not driving for Uber full-time but using it to complement other, steadier work (Schor et al., 2020). Their job satisfaction is much higher than that of full-time Uber drivers. While around 16% of US adults have ever made money through platforms, the number of active users is only between 1 and 4% of the labor force (Gelles-Watnick et al., 2021). Gig platforms that allow workers to monetize otherwise free time are an extreme example of the fractured workplaces that dominate postindustrial capitalism, not an escape from them (Kalleberg, 2011).

The gig economy is thus a symptom of postindustrial breakdown. Economic productivity in the global North has stalled since 1970. Increased output per worker, and the powerful unionism associated with the control of large, fixed machinery, enabled steady wage gains for an industrial workforce dominated by White men. But total factor productivity has stalled, growing “after 1970 at barely a third of the rate achieved between 1920 and 1970” (Gordon, 2017: 2). Some of this stall is due to the one-time nature of infrastructural innovations like electrification, while some is due to the shift of employment share from industry to services, which are much more difficult to automate. In Gordon’s longue durée framework, industrial employment is desirable not because of its perceived status—often dirty, dull, and dangerous—but because industrial employment is historically unique in its capacity for automation and concomitant productivity gains. The postwar years of high productivity growth helped guarantee higher wages, and correspondingly higher consumption, because profits soared as wages made up a lower proportion of costs. Besides a brief blip in the late 1990s, computerization has not reversed the post-1970 trend of declining productivity. Computerization did, however, create many unicorns—startups valued at over $1 billion—that do not employ many people, leading to a booming 2010s stock market amid stagnant wages (Srnicek, 2016).

Indeed, Uber, gig economy poster child, only turned a profit after selling off the self-driving car unit that was supposed to eliminate labor costs. Never has it been clearer that gigs are generated by platform labor arbitrage, while platforms themselves profit through regulatory arbitrage (Shapiro, 2018). The Manchester women sewing at home through the putting-out system provided inputs for booming textile industries that revolutionized the means of production. Today, platform labor in the Global North functions as a rearguard action of financiers in a moment of widespread precarity and stagnation; premature deindustrialization is the soil in which they grew, and, like most cash crops, platforms hardly improved the overall health of the environment. Rather than technological innovation, what labor platforms do is take advantage of regulatory inaction to informalize certain services, formalize the resulting “gig” as an employment category, and raise their stock price through promises of endless growth when that promise seems to have withered elsewhere.

Gigs South

In the Global South, labor platforms present themselves as the latest iteration of a development project meant to integrate informal workers into the global economy. The World Bank sees the gig economy as an avenue for economic development when job creation has stalled, acting as a successor to the business process outsourcing that moved so many call center and software development jobs from the United States and Europe to India, the Philippines, Kenya, and elsewhere (Kuek et al., 2015). The opportunity is especially attractive to national elites who missed the 1980s–1990s industrialization cycles, focused in East Asia, because cycles of industrialization, and the attendant job growth and productivity increases, appear to be becoming shorter and shorter (Melia, 2020; Silver, 2003).

These structural concerns appear similar to those of the postindustrial North. But where the second and third Industrial Revolutions followed the US’s bourgeois democratic revolution, in India the reverse is true. This creates a crisis for postcolonial states whose legitimacy depends on the creation of more good jobs. Platform labor emerges within Indian labor markets already dominated by informal labor, around 90% of the total labor force (Raveendran & Vanek, 2020). The story is similar across South Asia, Latin America, and Africa. Gigs are old news to food hawkers, tuk-tuk drivers, and maids. What is new is the platform soliciting, distributing, and rationalizing those gigs. The smartphone app replaces some older labor market institutions, like placement agencies that brought rural migrants into urban services. But boosters argue that these apps will do much more: Filling information gaps within informal labor markets, reducing gender and ethnic discrimination by consumers, and providing governments with the infrastructure and data to disburse social protection schemes. This is not all spin. By their very nature, platforms record, monitor, and archive transactions previously “off the books,” facilitating discovery in a way informal transactions channeled through social networks could not. Platforms make gigs visible to the labor market and welfare state, integrating previously cash-only jobs into formal financial institutions.

Exploitation is still the order of the day. Labor platforms in India are, as in the United States, built on information asymmetries between hungry workers and digital brokers, and the pursuit of profit via arbitrage creates a downward wage spiral (Malik et al., 2021). But this self-managed exploitation remains popular. It is often experienced as liberatory. In part because the labor market provides counterfactuals not just of starvation but of other jobs you and yours have worked. Debt peonage, asymmetric trade relations, and direct expropriation continually separate farmers and artisans from their traditional handiworks, such that worklessness is an obvious, continuous threat to the Indian working poor (Sanyal, 2014). But those who have worked under the direct management of smallholding farmers or sweatshop subcontractors often prefer group-based piecework because they set their own pace in relative autonomy, and can do so in social groupings, including the family, not prescribed by management, even if the rate of exploitation, that is, the ratio of surplus value produced to wages paid, is higher than in the equivalent waged workplace (Gidwani, 2018).

Gidwani argues that informal labor markets have not withered away in the face of development in part because of the survival tactics of workers who “are constantly striving to disarticulate from the sway of value” (172). Given a shrinking pool of steady work and a “multiplication in the (social and technical) division of labor,” informal work should be understood as a collective effort to make concrete labor count when and where it can—always for subsistence, sometimes for capitalist valorization. The real innovation of labor platforms in the Global South, then, is not technological. It is institutional: absorbing fractions of this postindustrial reserve army of the underemployed and providing the flexibility of informal work on the terms of formal work, integrated into the circuits of global financial capital. Formalization takes place within the world market but outside the parameters of the welfare state and the 20th-century workers’ movement.

The state is required to enact this shift in capitalist social relations. Sanyal (2014) argues that Indian industrialization required the forceful, repeated separation of artisans and agricultural workers from the means of independent subsistence (e.g. land seizures and ethnic cleansing). But he departs from the Marxist consensus, and the development teleology embraced by both Marxists and Keynesians, in arguing that premature deindustrialization creates a “wasteland” of the underemployed who move into and out of a subsistence economy with minimal capital accumulation—the informal sector. Postcolonial capital is thus unable to abandon or overrun pre- or non-capitalist economic forms. This stalled development process creates a legitimacy crisis—something must have gone wrong if there aren’t enough jobs to go around. Resolving this crisis, Sanyal argues, is the task of the developmental state: “The goal of development is to engage the dispossessed and excluded in production activities . . . resources are made to flow from the domain of capital to the wasteland” (65). Where independent India’s first Five-Year Plans focused on national economic growth via industrialization, from the Fifth Five-Year Plan onward, coinciding with the Green Revolution that dispossessed so many peasant farmers, the state identified poverty alleviation as a central goal distinct from growing productive enterprises.

Labor platforms are a new stage in this process. Like the rest of the informal economy, they provide the underemployed with low-productivity, self-managed work. Unlike the rest of the informal economy, platforms restructure the labor process via datafication, deploy workers in places and times most amenable to capital accumulation, and funnel payments and profits through formal financial markets. Something different really is happening: A development project—labor platforms—native to premature deindustrialization. Even if the work or its earnings are not truly emancipatory, labor platforms fundamentally change the relationship between the informal sector and global capital accumulation. In Sanyal’s terms, gigs in the Global South selectively capitalize the wasteland and the pre- or non-capitalist economic forms within it. Labor platforms bring the outside in, absorbing fractions of the reserve army, providing the flexibility of informal work on the terms of formal work, and integrating work and worker into the circuits of global financial capital.

Gigs uneven and combined

Gigs North and South proceed through the same labor processes: Driving for Uber in India and the US looks similar. The geographical difference, then, is how platform labor is integrated into the rest of the economy. Because the North industrialized before transitioning to a service economy, platform labor formalizes newly informal work, supplementing flagging full-time wages for a relatively small number of workers in a stagnant economy. Because the South’s industrial development stalled, platform labor selectively formalizes a vast wasteland of informal work. Many of the same firms appear in both locales, like Uber. But even when competing, platforms can share financiers: Both Uber and Ola, their biggest competitor in India, are heavily supported by the venture wing of the Japanese Softbank. Wherever they are, labor platforms succeed because of this massive capitalization. It allows them to survive long periods of money-losing rides until competition is destroyed and oligopolies established (D’Souza & Dev, 2019).

So, it is not the case that labor platforms in the North and South exist as independent economic actors, nor is it the case that they are bending the economic destinies of each region toward similar ends. Rather, it is a case of uneven and combined development. The concept captures a core contradiction in Marxist accounts of capitalist development—that wealth produces poverty and vice versa—as well as a core methodological concern—that geography is not a container for social relations but is produced through them (Smith, 2008).

The brute theft of Global South resources to fund Global North economic development continues, of course; the phones used to ride on or for Uber are filled with conflict minerals. But the platforms themselves are a more novel development. The experience of hailing a ride via your phone registers a real change in the capitalist production of space: There are too many people who want paid work but can’t get enough of it, and you can be matched with them for as long as you want, at a moment’s notice, although neither rider nor driver sets the price of that match. The phenomenon stretches across the globe, although it largely enrolls underpaid full-time workers in tighter, Northern labor markets that have already industrialized, versus the previously informal workers enrolled in prematurely deindustrialized Southern economies. Different structural positions because the North industrialized at the South’s expense in the 19th century, so that postcolonial states entered a mature world market full of industrial competitors in the 20th century, leading those Southern states to prematurely deindustrialize in the 21st and turn to “development” as a solution.

There are concerted efforts to address this stagnation, which may represent a broader turn to national industrial policies. In India, COVID exacerbated a decade of decline in both fixed capital formation and manufacturing output as shares of Gross Domestic Product (GDP; OECD, 2019). Prime Minister Modi’s Make in India program increased foreign direct investment in India in 2022, but most investments were directed toward services and computing technology. Manufacturing’s share of GDP continued to drop, from 16.3% in 2013–2014 to 14.1% in 2023–2024. Its share of employment ticked upward from a 2021 low—while remaining well below the recent peak of 2017 (National Statistical Office, 2024). President Xi’s Made in China 2025 program, on the contrary, has reached most of its targets for domestic industrial production, despite heavy sanctions from the United States (Tong & Peng, 2024). In the United States, the Biden administration oversaw both the tightest labor market and the largest boom in manufacturing investment in 50 years (Sutherland, 2024).

It will take some years before we can ascertain whether new Chinese or American industrial policies have permanently shifted the tides of premature deindustrialization, such that the employment share of industry grows relative to services. It also remains to be seen what impact higher interest rates and tighter labor markets, at least compared to the 2010s, will have on the continued expansion of labor platforms. A path away from premature deindustrialization and its labor market consequences may only be available to global hegemons supporting their national labor markets. Support in part designed to shore up political legitimacy after decades of neoliberal retrenchment and popular disillusionment, a problem familiar to postcolonial states mired in decades of “development.”

Labor platforms, then, are one solution for a broader political problem of contemporary capitalism: How to manage a reserve army of labor after the dream of endless growth has died. That these firms are so heavily capitalized relative to employees or revenues is important because financial institutions, as coordinating agents for global capital, are probably the most effective supranational governance bodies in existence (Jayadev et al., 2018). This is not to suggest a shadowy plan by investors, but a global structural opportunity, perhaps a necessity, recognized by financial capital. Sanyal recognizes the same in his description of a labor wasteland that must be developed, lest the post-colonial state risk illegitimacy and subsequent unrest. Through platform labor, financial capital extends this development project around the globe. And while the post-pandemic end to quantitative easing has forced many labor platforms to focus on profitability, the structural limits to capitalist growth, especially in the Global South, seem to hold firm. So, we can expect neither Uber nor Ola to suffer for lack of drivers anytime soon.