Reputation & Precarity in the On-Demand Economy


A recent Globe & Mail survey of millennials showed an increased precarity in their employment experiences and potential for future employment development:

Almost one-quarter of the generation of young adults born between 1981 and 2000 are working temporary or contract jobs, nearly double the rate for the entire job market. Almost one-third are not working in their field of education, 21 per cent are working more than one job, and close to half are looking for a new job.

“Contract jobs” encompasses what we’ve come to know as the “gig economy” – also known as the “sharing economy”.  This encompasses many different activities.  An April 2017 Canadian Centre for Policy Alternatives survey found that within the Greater Toronto Area the two most popular were ride/car transportation (i.e. Uber or similar services) and cleaning services.  Also represented were:   home cooked meals, food delivery, carpooling, home rentals, home repairs and sharing office spaces as well as parking spaces. 

These kinds of platforms are inextricably linked with reputation and ratings systems.  Ratings systems, whether visible or not, are what the gig economy relies upon to regulate the behaviour of service providers and give consumers of the services the tools for risk management and thus the ability to trust “reliable” services.

Entitled “Sharing Economy or On-Demand Service Economy”, the CCPA report examines both workers and consumers, reviewing who is providing services within this sector, the conditions of their work, and public perceptions of the need to change regulations to keep up with this new sector.

The report confirms that the sharing (or gig) economy is extremely precarious – by forcing its participants to accept the status of “independent contractor”, they are not employees and as such they are not protected by employment law and do not contribute towards employment insurance and other social safety net programs.

The report paints a picture of who is doing this kind of work:

  • 48% women, 1% transgender
  • 54% racialized persons
  • 51% have children under the age of 18
  • 90% have some post-secondary education
  • 70% under the age of 45
    • 32% btw 18-29
    • 39% btw 30-44

The report indicates that these are not “casual” workers – many of those currently participating expect to still be doing so a year from now, and most (63%) are working at it full time.  Despite working full-time, it’s not particularly remunerative – only 16% make more than 90% of their income from their sharing economy work.  Despite this, almost 60% do count on it for more than 50% of their income, with racialized and immigrant workers counting on it in even greater numbers.  Most (58%) of these workers have a household income of less than $80,000 per year.

On top of that, as nominally self-employed persons, workers are responsible for the costs (and the risks) of the services they provide, with no backup or support from the platforms that enable and contract for their work.

The report concludes by arguing for strengthened safety regulations to protect workers and consumers.   I don’t disagree that regulation is important is necessary, but I wish the report had focused more on how the gig economy currently purports to regulate itself – via reputation – and the impacts and risks of this.

Workers cite various reasons for their participation in this economy – 64% do it to make extra money, 63% because they like it, 55% because it’s the only way to make a living right now, and 53% say it’s something to do until they can find something better – but the overall picture that emerges is one of a difficult labour market, shrinking secure full-time employment opportunities, and an expensive economy.  That means that its participants are under duress already – we’re not talking about the free-spirited millennial making some extra cash to travel.  We’re talking about people who are doing what they have to do in order to keep their heads (barely) above water.

That makes it even more problematic when workers providing these services are harassed.  These workers are especially vulnerable to racist and sexual harassment – and they are not covered by the protections that are in place for traditional employees.   And the fact that they are subject to ratings for services provided makes it difficult for workers to protect themselves effectively from or even to address the fact that it happened. And with no social safety net backing them up, they are effectively trapped in such situations – they can’t remove themselves from it without risking losing everything. 

Recent research looked at the service industry focusing on the lower-than-minimum-hourly-wage allowed in British Columbia and its impact.  The research showed that this creates a dependence on tips that in turn creates the necessity of enduring rudeness and harassment.  These behaviours become a normalized part of employment, with these risks exacerbated for women when employers encourage (or even require) sexualized clothing and demeanor to boost tipping.

Kaitlyn Matulewicz, the researcher, says that:

“The women I interviewed either just like take it, laugh it off, endure it to get through the night or quit when they’ve had enough of what they’re experiencing,”

In the gig economy, there is no hourly wage, and no insurable earnings, meaning no safety net.  This isn’t about supplementing income with tips – it is about continuing to work at all.  A necessity.  And this heightens the power imbalance between workers and consumers in the gig economy, and the precarity experienced by those workers.