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In Desha County, where Dumas is located, 27.8% of the population is food insecure, compared to the national average of 13.4%.7 According to a final report Samasource wrote about its Dumas program, 44% of Terrence’s students throughout the three years of the program did not have reliable transportation. And around 15% of Samaschool’s Arkansas participants had faced some type of homelessness while taking Terrence’s class. Terrence provided transportation when his students needed it, wrote letters to courts in an attempt to keep them out of jail for small violations, and counseled them when they were having trouble paying their water bills. He brought pizza and snacks to class. But one man and a ten-week course wasn’t enough to hold together the lives of 30 students at a time.
After Samaschool realized that it wasn’t able to provide the level of intervention required to support residents in Dumas, the non-profit changed its program completely. Now, instead of teaching its own classes, the non-profit partners with workforce development programs around the country—many of which provide training in marketable skills—to teach their students and clients how to access independent work involving those skills. It gave up on the idea that these students would compete in a global marketplace and instead focused on in-person gigs like carpentry, housecleaning, babysitting, and delivery.
Connecting skilled workers with the gig economy provided the possibility that they could use their gigs to build their resumes or tide themselves over with freelance gigs while they looked for other jobs. “The typical workforce development organization that provides training for job seekers is really focused on full-time jobs, and it relies on employers to provide onboarding and training and support,” Lindsey Crumbaugh, the program’s managing director, said. “What we’re saying is we need to reframe the whole way that we train to build the skill of being a problem solver, a micro-entrepreneur, so individuals have the ability to move between full-time and independent work, because a lot of trends we’re seeing [indicate that] forms of independent work will be a lot more prevalent.”
Gig work wouldn’t necessarily solve the problems of poverty, and it didn’t come with the safety net protections of employment. But increasingly it was the work that was available. And there was a new set of skills required to access it, skills like self-promotion and entrepreneurship. In its new role as a partner to other organizations, Samaschool would continue to focus on these skills.
In terms of efforts toward helping his own community went, Terrence was back to his habit of asking children if they were hungry.
He’d been thinking deeply about why Samaschool hadn’t worked, and what might have worked better. A policy idea called “Universal Basic Income” (UBI) had started gaining steam in Silicon Valley as a way to end poverty. Programs based on this idea pay everyone a minimum income, regardless of their circumstances.
Martin Luther King Jr., the conservative economist Friedrich Hayek, and President Richard Nixon had all supported this idea, and modern boosters were no less varied. They included Andy Stern, the former president of the SEIU; the libertarian economist Charles Murray; and Robert Reich, the Bill Clinton–era labor secretary, who was fond of comparing the gig economy to a sweatshop. The tech incubator Y Combinator had recently committed to running a UBI experiment in California to understand how it worked. Facebook cofounder Chris Hughes endorsed UBI in a book.
Terrence Davenport, though, was not a fan. He was nearly exasperated at what he saw as the ignorance inherent in the idea. “Do you know about the opioid crisis in this country?” he said. “Do you know that poor people in my community don’t know how to budget?” He told me that he felt Silicon Valley was a place full of “the leaders of our country” who don’t know anything about it.
At the time, the other most prevalent idea for ensuring Americans better income came from Donald Trump, who had campaigned for the presidency on an “America First” ideology, which implied that sending immigrants home would help Americans get jobs. This, too, seemed ridiculous to Terrence. The African Americans he knew didn’t have the skills for the jobs currently filled by immigrants, he told me. Any actual solution needed to account for the inherited trauma and hopelessness experienced by the people in Dumas. Training wasn’t enough. There are plumbing apprenticeships in Little Rock, Terrence explained. Those are good jobs, they pay well. But if someone in Dumas enrolled, they would still need transportation, they would need child care, and they would need a place to stay. Which is why, if Terrence were to start an organization, he’d give everyone a case worker. They wouldn’t need to have a behavioral problem or commit a crime to get support. Being chronically unemployed was enough of a condition. He’d call the operation “H.U.G.,” Helping You Grow.
Terrence’s brush with Silicon Valley had also inspired him to think more about the resources in Arkansas. About the land that stretched for miles outside of Dumas; about the state’s agriculture industry, which was one of the top producers in the country; and about the Tyson feed mill, part of a $28 billion food company, located just miles from where we were sitting.
It seemed to Terrence that the community wasn’t using these resources in a way that benefited the majority of its residents. And he’d started to see opportunities where it could correct this everywhere, even in Dumpsters. Terrence had attended a city council meeting in which a $14,000 decision was made to purchase Dumpsters. He’d remembered how, after his mother died, when he had moved back to Dumas and was looking for work, he dug up scrap metal to sell by the pound. Why not teach Dumas residents to weld? he thought. Teach them a skill, give them a gig, and probably wind up with cheaper Dumpsters as a result?
Silicon Valley didn’t need to fix Dumas’s problems. Dumas could do it. If its leaders learned to think differently about how to use its resources, they could make a gig economy of their own. “If you hadn’t eaten for three days, and I put a piece of bread in front of you,” Terrence told me, setting down a hypothetical slice on the McDonald’s table between us, “and then I say, watch this bread, and I leave, you will eat the bread and we’ll put you in jail. But I could have given you a piece of bread as payment for watching it.” His point was that instead of putting people in jail for the types of crimes that they were likely to commit if they couldn’t otherwise meet their basic needs, it was possible for the community to put them to work in a way that would both help them meet those needs and also benefit others.
The gig economy had early on been positioned as an easy way to solve hard economic problems like unemployment and unequal opportunity. And in this regard, it had plenty of competition. Get-rich-quick schemes like GIN, the one Abe had fallen for, promise their followers easy success. Bestselling self-help books like The Secret and You Are a Badass trumpet the same idea, that one can manifest anything by believing in it. Multi-level marketing companies tell women they can become successful entrepreneurs by selling makeup, candles, or essential oils (though almost nobody in the “triangle-shaped” organizations—it’s not a pyramid, they all insist—makes money doing so).
The solutions Terrence proposed were of a completely different tone than those that I heard from startups. They weren’t simple. They were resource-intensive and multi-dimensional and individual.
Terrence knew better than most people working at technology companies that in reality, we don’t all have the same chance of succeeding if we just believe. What entrepreneurs most have in common is not a special leadership style, flavor of grit, or talent. It is inheritance or other access to startup capital, according to a study published in the Journal of Labor Economics.8
Those at the top of the economic ladder had built-in advantages, and moving up the ladder was only getting more difficult. In a 2016 study, University of Massachusetts economists used data from the US Census Bureau to show that social mobility in the United States is decreasing.9 “The probability of ending where you start has gone up, and the probability of moving up from where you start has gone down,” one of the researchers told The Atlantic. Someone who started in the middle of
the earning distribution in 1993 was 20% less likely to reach the top two earning deciles within the next 15 years than someone who started in 1981.10
Problems like insecurity and inequality are complex and slow to fix. Just believing cannot solve them. A book or a special club cannot solve them. And, in the case of the gig economy, neither can an app. The more Terrence thought about it, the more he became convinced that truly making a difference in Dumas would be slow, difficult, and definitely not on-demand.
CHAPTER 13
A VERY SERIOUS ISSUE
On a hot day in May 2017, entrepreneurs from all over the world, including Managed by Q’s Dan Teran, packed themselves into a warehouse event space just off of New York City’s FDR Highway for TechCrunch Disrupt. Half trade show, half Shark Tank–style pitch competition, Disrupt is a tri-annual startup conference where startups with names such as Happification, Binary Mango, and Blazesoft come to get noticed by venture capitalists and the tech writers whose blogs they read. As an attendee, it’s hard to walk anywhere without acquiring a free branded T-shirt.
Dan wasn’t there to pitch Managed by Q—he was there to participate in a keynote talk with the CEO of Handy, Oisin Hanrahan. The two entrepreneurs had taken very different approaches to their cleaning and handyman services. Dan’s version served offices and relied on employees. Handy’s customers were households and its cleaners and handymen were classified as independent contractors.
Despite these completely different approaches, it was hard to say from a business perspective which company had turned out to be more successful. Managed by Q was at that point a mid-size company with 3,000 clients, and on the brink of profitability. Handy as of November 2016 operated in more than 28 cities and had raised more than $110 million of venture capital. Though the latter startup’s early struggles in maintaining both customers and workers had been well documented, they hadn’t been a death sentence. Inc. magazine had recently profiled Handy’s “painful path to profitability.”1
At TechCrunch Disrupt, the stage was cordoned off from the rest of the conference by thick black curtains, but the buzz of optimistic entrepreneurs was still so loud that the audience strained to hear the on-stage conversation. Dan and Oisin would be interviewed by a third man, TechCrunch editor Jon Shieber. Both speakers wore blazers, dress shirts, and jeans—Dan’s were black, Oisin’s were denim—and, at first, they looked like teenagers forced to mingle at a dance. Which, since TechCrunch didn’t tell them they’d be appearing together until announcing it publicly, wasn’t so far off the mark.
“Is the gig up for this business model?” Jon began. “Is it all over? Has the song been sung? Has the sun set?”
It was a fair question. Many of the companies that once called themselves part of the gig economy, with exceptions like Uber, Lyft, and Handy, had either changed their business models or failed. And as the economy had recovered—six years of continuous US job growth and counting—it seemed that fewer people were willing to take their jobs piecemeal, from an app.2 Participation in gig economy platforms had been falling since June 2014, according to data from the JPMorgan Chase Institute. More than half of the people who started working in the gig economy quit within a year.3
At the same time that workers were dropping out of the gig economy, legal issues were making the business model look riskier. There had always occasionally been scary court rulings, like the one in California that determined a single Uber driver was an employee. But court cases take years to wind their way through the system, and everyone with meaningful funds to devote to the situation (companies that want to avoid a massive disruption to their business models, lawyers who want to be paid) had an incentive to settle rather than risk losing a case. Uber settled a pair of its most threatening misclassification lawsuits in California and Massachusetts by agreeing to pay drivers $100 million (an arrangement later declared inadequate by a judge), and Lyft, which had previously tried to settle a class action suit in California for $12.25 million, eventually agreed to a $27 million payment to drivers. Nobody wants to lose millions of dollars, but in the context of what colloquially was known as these companies’ “war chests” of funding, the settlements didn’t meaningfully impact their businesses.
Recent rulings looked more threatening. In 2017, New York’s state labor department upheld a court decision that had determined that three former Uber drivers, as well as “similarly situated” drivers, should be treated as employees for unemployment insurance purposes. And in the UK, the Transport for London would soon strip Uber of its license, saying it was not a “fit and proper” private car company. Shortly after that, a tribunal would reject the company’s appeal to a ruling that found its drivers were not self-employed, entitling drivers to paid time off and a minimum wage. (In each case, Uber continued with the appeals process.) During the same stretch of bad news for Uber, the top EU court dealt the company a major blow when it ruled that it should be regulated as a taxi company rather than a technology company that merely connects drivers and riders.
The gig economy, as Silicon Valley had invented it, had largely come and gone. It had not, however, ceased to be relevant.
Long before the gig economy, large companies outside of Silicon Valley had started moving away from direct employment relationships. Startups like Uber demonstrated new strategies and technologies that could make this process more efficient. They broke work into parcels, automatically coordinated workers, and established practices for using apps as management. These were all developments that non-startups would emulate.
Julie Sweet, the North America leader of Accenture, a professional services company with clients in 120 countries and 40 industries, told me in June 2016 that she imagined soon there would be a company that only hires c-suite executives. “The ability to outsource corporate functions is high,” she said. “For my main workforce, I can tap into the gig economy.” (She did not foresee this shift for Accenture itself, which she said is “built on relationships” and “not a transaction industry.”) Gigster, the startup that routed jobs to Curtis after he’d quit his job in New York City, had all but achieved this. By 2016, it had 32 employees—only four of whom helped manage its 500 client projects. Everything else was accomplished by automation and freelancers. Stephane Kasriel, the CEO of Upwork, similarly saw the world shifting to non-employees as an inevitability. “We have freelancers who manage ten people, we have freelancers who access secure code databases, we have freelancers who have been working with us for 10 years,” he told me during a meeting in June 2015. “As long as the legal status is clear, there is no difference.”
Before he left, his PR handler gave me a printed PowerPoint presentation that compared the gig economy to ecommerce. “Commerce has moved online and now services, including work, are too,” one of the smooth color-copied slides beamed. A graph showing freelancer earnings jutted straight up and to the right, pausing at $3.2 billion at the end of 2014. On the last slide, the presentation urged me to imagine what this meant for the future. “Commerce, still a small percentage of retail, is a huge market,” it said. “Imagine if only 2% of work moves online.”
The impact of this shift might be a good thing for professional workers with in-demand skills. But the trend wouldn’t necessarily stop with these workers. IKEA bought TaskRabbit in 2017, presumably so it can dispatch workers to assemble customers’ furniture. Amazon started rolling out a courier program in 2015 that offers the opportunity for workers to be their own boss and work on their own schedules delivering Amazon packages. And a new round of startups hopes to bring more corporations into the gig economy.
Take Wonolo, an on-demand staffing agency built on Uber’s model. It works with more than 600 businesses, including Papa John’s, Johnson & Johnson, and Target, to provide on-demand labor. Wonolo workers fill in when businesses need extra help but don’t need to hire full-time employees. For example, they help staff pizza delivery operations when it rains (and customers are more reluctant to leave their houses), run one-time events, fill in gaps w
hen employees quit, and stock Odwalla juices at stores that have unexpectedly run out of the product. On average, Wonolo fills jobs within four hours, by pushing them to its workforce of 30,000 on their mobile phones, much as Uber routes jobs to drivers. At the end of the day, management rates workers and vice versa. “It’s Uber, but for the staffing problem,” AJ Brustein, Wonolo’s cofounder and COO, said.4
Traditional temp and staffing agencies have long filled the same types of jobs as Wonolo does, but they’ve taken days or weeks to do so. Wonolo eventually added a more traditional staffing agency option to its business, to accommodate clients who worried about misclassification lawsuits and would rather hire temporary employees than freelancers. Adding mobile technology to the process makes using both temp labor and independent contractors easier, more efficient, and ultimately applicable in more situations.
Is this a bad thing? Maybe not. Gig economy boosters often point out that between 70% and 85% of independent contractors say they prefer to work for themselves.5 But the type of job that has traditionally been completed by independent contractors is narrowly defined and, most important, highly skilled. In the future, this may change. Deliveroo workers—whom the UK Central Arbitration Committee ruled in 2017 were legitimately self-employed—are, for instance, not well-paid professionals who can likely afford to create their own safety nets, but couriers. As the potential for companies to use independent contractors expands with mobile technology and automation, it’s possible that workers could regard new types of piecemeal labor as being more like temp work. Unlike freelancers, 77% of temp workers say they would rather have a traditional full-time job.6