Is the Obama agenda compatible with companies like Uber?
At a transportation forum in Washington, D.C. on Tuesday, Vice President Joe Biden will share billing with two cutting-edge yet controversial tech companies, Uber and Lyft.
As part of the so-called sharing economy, companies like Uber and Lyft sprung to life just as President Obama was taking office. After the 2008 global economic crisis, people were looking for ways to make money, and the burgeoning social media world provided it.
"People were looking for new ways to cut costs and support themselves," explained Shelby Clark, the executive director of Peers, an advocacy group for the sharing economy.
The nation's economic wounds have slowly healed, and the sharing economy is as robust as ever. According to one estimate, as many as 80 million Americans used the sharing economy in 2013. That year, Forbes projected the sector would bring in more than $3.5 billion in revenue. Its success and innovation has caught President Obama's attention. At a Pittsburgh TechShop event in June, he praised Uber and Airbnb's creative usage of underutilized resources and even suggested they've helped government with "thinking more creatively" about how to maximize its own underused assets. Obama top aide David Plouffe also seems intrigued by the sharing economy. This summer accepted a job at Uber as senior vice president of policy and strategy.
At the same time, the new sector is facing challenges with issues like workers' rights that are at odds with some of the administration's aims of securing a strong middle class. Uber drivers have filed lawsuits in California and Massachusetts claiming that the company treats them as independent contractors to avoid providing them with benefits and the security that come with a full-time job. Some of the people who find work as housekeepers through the platform HomeJoy are reportedly homeless.
While the sharing economy developed during the Obama years, some point out that the roots of its problems extend further back than that.
Harvard's Steven Strauss, for instance, contends that over-reliance on the sharing economy stems from deep-seated problems like income inequality and an under-educated workforce. "People aren't showing up on Saturday morning to drive me around because they've developed a love of driving their cars on Saturday morning, it's because they need the money," he told CBS News.
Meanwhile, questionable reliance on independent contractors is nothing new. The federal government has stopped tracking the number of independent contractors in the workforce, but as far back as 2000, as many as one third of workers identified as contractors. Some of those individuals are actually self-employed, but others are employees that have been misidentified as contractors by their employers. While Uber has been accused of misidentifying its workers, so have some more traditional employers like FedEx.
Cathy Ruckelshaus of the National Employment Law Project noted that while the controversy may not be new, the sharing economy has put its own rhetorical spin on it.
"These shared economy, digital economy jobs -- sometimes the companies call them 'gigs,' and the companies call themselves 'platforms,' even though they are just labor brokers," she told CBS. "It's interesting how the frame has shifted. If workers and their advocates want to reclaim some of these protections and not let them be carved out by a different label, they'll need to reframe the discussion."
Ruckelshaus suggested that the government should either enforce broader definitions of what it means to be an employee, or take steps to buttress the social safety net to assist independent contractors. To some degree, the Obama administration has already done that, enabling self-employed people to get health insurance through the Affordable Care Act. A strong safety net, Ruckelshaus noted, also includes unemployment benefits, minimum wage and overtime protections, and the right to a safe and healthy workplace.
Clark acknowledged that reliance on the sharing economy can be challenging for some workers.
"For many people, starting in the sharing economy is their first foray into being a contractor -- they're used to the sort of infrastructure and support of a traditional job," he said.
As challenges to the sharing economy wind through court, Clark pointed out that the sector is already developing some of its own solutions. For instance, the startup Zen99 helps contractors determine how much of their earnings to withhold for taxes. Meanwhile, property management services have developed for people renting out rooms via Airbnb.
"You're seeing an ecosystem that's starting up to support people," Clark said.
