the relationships between the ‘platform’ and the workers
Posted at 21:36h, 03 Feb 2015 in List Archive by Bonnie Halper No Comments 135 Likes Share

Good morning, All,

Our next Breakfast with an Investor will be Wednesday, February 18th and our guest investor will be Alicia Syrett, Founder and CEO of Pantegrion Capital, an angel investment firm that focuses on seed and early stage investments, and a member of several angel networks, including Golden Seeds and NY Angels. She’s a very active investor and startup advisor – and she’s currently looking for NYC-based early stage investments. For the record, because we keep the group small, every investor who has spoken at one of our breakfasts so far has made him or herself available to attendees afterwards, meaning private consultation. RSVP here and hope to see you there!

For the record, the first so-called New Economy forged by technology was during the Web 1.0 days, when companies raised money from investors and were suddenly ‘successful’ – on paper. Some had to learn the hard way that building a company meant building a business – one that had earnings, profits. That is a measure of success in any economy, not the OPM – Other People’s Money, aka, investor money.

When you live on OPM, well, that’s why it’s called a pipe dream.

But people are building successful businesses now, and some are based on the ‘sharing’ economy. This is about Uber, and the class action lawsuit that’s going on in San Francisco, in case you missed it. The drivers contend that they “are employees and entitled to reimbursement for expenses, including gas and vehicle maintenance.” Uber’s (and Lyft’s) claims are that they are enabling platforms and these lawsuits may well open a whole can of worms.

We’re not big on regulation, and government intervention. Once the legislators get involved, it’s usually about what would yield the most revenue for the state/federal governments – or which special interests would be served. “Revelations this week that Verizon Wireless secretly used “supercookies” to track customers’ browsing habits underlines a less-talked about benefit of the FCC’s potential reclassification of broadband as a Title II public utility — consumer privacy protection. With broadband defined as a Title I “information service” as it is today, the FCC lacks the legal language and authority to punish carriers for things like ‘supercookies,’” writes Venturebeat .

Changes in regulation these days are rarely made out of any altruism or sense of what’s right for the population at large, and their decisions tend to constrict, if not disable, innovation. You don’t see flying cars coming out of the US, as it threatens the automakers, so that technology has been legislated onto foreign shores. The same is slowly happening in the drone space.

The Ubers and Lyfts and other companies who are building what is turning out to be this latest iteration of the New Economy need to take heed. Uber may be valued in the billions and be one of the biggest companies in its space, on paper, but those of us who remember Web 1.0 well know what that paper is worth. Trust us, there are still larger and more politically connected interests at play here.

Le’ts not forget the wage fixing that went on in Silicon Valley and the collusion between the major players not to poach from each other, in order to keep salaries contained. They did something else, and Microsoft was one of the biggest offenders here: they hired ‘consultants’ who would work the same hours as employees, have set responsibilities and would be required to work on premises (or not). The only difference between these consultants and employees is that the consultants received no health benefits, vacation or holiday pay, or any other benefits that to which employees were entitled. The government intervened. Consultants were let go. Many employees were made part-timers, and their hours were cut, as were their benefits. There were no real winners in the end.

The ‘sharing economy’ has certainly forged a new kind of worker, and given the structure of the relationships between the ‘platform’ and the workers, it may require a new sort of structured relationship between the two parties. Better to work it out internally than to leave it in the hands of the regulators.

This may well be where that hubris and sense of entitlement that we so often see in tech unicorns and their equally myopic investors may lead to constricting tech on yet another front. The industry at large – especially in the so-called sharing economy – really need to start paying attention, and read the tea leaves instead of their valuations – on paper. We would like to see the Ubers and Lyfts of the world succeed, but, unlike the robber barons of yore, we live in a global world, they’re playing on the world stage, and the whole world is watching. Just as social media perverted human relationships, in its way – friending is a verb, but is that a friend? – the sharing economy is perverting the employer-employee relationship. Or changing it, and that must be addressed, preferably by the industry itself. Time for the industry to take the long view, for once, and keep their eyes on the road ahead: when you’re taking a journey of a long distance, or atleast intend to be in it for the long haul, sooner or later, it can’t all be a one-way street.. Onward and forward.