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Sarah Mei
+ Your AuthorsArchive @sarahmei Software engineer & founder of @RailsBridge and @LivableCode. Currently stirring the pot at @SalesforceUX. She/her. ✨Twitter at the speed of parenting✨ Nov. 11, 2019 3 min read

We’ve all heard this story before.

Gig workers start off make reasonable money doing something useful on their own schedule.

Then after workers get invested in the platform & the tools, the company drastically cuts pay rates.

There’s a slide deck somewhere on some VC’s computer that is the “exploit gig workers handbook” - and it includes this move, because for awhile after you do it you still get higher-level work done for pennies because your workers trusted you & engaged with your platform.

They can’t all move off right away. So they protest, & maybe organize. You string them along with platitudes (“our shoppers are the reason we exist!”) to slow attrition. Meanwhile you onboard new, lower-quality, more desperate workers at the new rate as fast as you can.

Then you do it again! You lower your rates - AGAIN - because your new folks are more desperate and more likely to stay, and you onboarded so many that you don’t need the originals anymore.

The original workers, the ones who made you successful? Those you discard, without a thought - they’re merely byproducts of your business model.

But those are PEOPLE, for fucks sake.

If you work full time at a gig economy company, I guarantee you that your management has this and many other slimy practices in mind - even if they aren’t deploying them now.

Everyone who runs a VC-backed gig economy startup has seen that slide deck. It is likely that their pitch deck parroted some of it back - though with the exploitation part papered over with phrases like “lowering labor costs at scale”😖

Make no mistake: VCs invest in a gig economy startup with the _expectation_ that you’ll put that playbook into action - because if you don’t, how will you inflate the financials enough to give them their exit event?

Personally, I find many of the gig economy startups incredibly useful. I live in a city & I don’t like driving. I hate going to stores. Between full time work and single momming, I have very little time to run errands.

But I’m not an executive with salary enough to employ help.

So I’ve used many of the gig economy startups - for transportation, groceries, restaurant meals, dry cleaning, even gifts. (Yes, I’m that mom who forgets about birthday parties until the day of.)

But what I desperately want is that sort of convenience but not built on a foundation of worker exploitation, and not so expensive it’s out of my price range. (For example - hire a nanny? roflnope)

Perhaps what I’m asking for here is “not capitalism” - but even under capitalism, there are degrees of exploitation.

Is it impossible to treat your workers well AND keep a business like uber or instacart or rev (the subject of the original thread) afloat?

I have a reasonable amount of experience with venture capitalists and the companies they fund. And I’m starting to think the situation is:

* take venture capital
* treat your workers well
* keep the company solvent

Pick any two.

If it’s not, then why are all the venture-backed gig economy startups so exploitative?

Are there any good ones?

Or are there merely those who are still in the initial “trust us, invest in our platform” stage?

This, I think, hits on the fatal flaw of gig economy startups.

Taking venture capital means you must make hockey stick money (“up and to the right”) SOMEHOW - and since brokering isn’t valuable enough, you end up extracting it from the gig workers.

You can follow @sarahmei.


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