Ten Ways To Affirmatively Disrupt Platform Capitalism And The Sharing Economy Of Uber And Airbnb ♯2: Pressure Regulators to Change the Law

(This is part of a series of posts in which I provide ten proposals as to how to affirmatively disrupt platform capitalism and the corporate sharing economy of Uber, Airbnb et al. Together these posts constitute the draft of a text provisionally titled Data Commonism vs Übercapitalism designed to follow on from my recently published short book, The Uberfication of the University. If the latter provides a dystopian sense of what is lying in store for many us over the course of the next few years, Data Commonism vs Übercapitalism is more optimistic in that it shows what we can do about it. 

The first text in this series, Data Commonism: Introduction is here.

The Uberfication of the University is available from Minnesota University Press here. An open access version is available here.)

We Don’t Have To Live Like This: How To Affirmatively Disrupt the Disrupters 

♯2: Pressure Regulators to Change the Law 

Another way we can endeavor to affirmatively disrupt the platform capitalists of the sharing economy is by making them more accountable to the state. For example, we can argue for changes to be made in the law so that trusting these businesses to behave well--as we currently do with Amazon, Facebook, Google, and other data-management companies--is not our only option. (Hence the recent appeals to Facebook to sort out its fake news problem, and to Google to review its PageRank system to prevent it from being gamed by right-wing news and propaganda websites. The latter have created a huge network of links to each other in order to manipulate the company’s algorithm and produce what one newspaper headline characterizes as a “new reality where Hitler is a good guy, Muslims are evil and … Donald Trump becomes president”.) 

Placing pressure on regulators is an approach that has been proposed a number of times now. In the U.K., Labour MP Frank Field has called for the Department of Transport and Transport for London to insist Uber outlaw “sweated labor” before they renew the company’s license to operate in 2017. In a similar vein, Chi Onwurah, Labour’s shadow minister for industrial strategy, said this week that she wants to see the algorithms of technology companies opened up to regulation and rendered transparent to ensure they comply with the law on employment and competition. Onwurah also wants legislation “for greater consumer ownership of data” to be introduced. Tessa Jowell, who has twice stood in as leader of the United Kingdom Labour party, has even gone so far as to make it clear she is refusing to use Uber, which for legal purposes is currently based in the Netherlands, until it pays taxes in the U.K. Uber only paid £411,000 in tax in 2015, despite having a turnover in the U.K. of £23.3 million. (As Fortune details, in May 2013 “Uber formed a new business entity in the Netherlands called Uber International C.V.,” which actually has no employees and gives the address of a Bermudian law firm as its headquarters. “Over the next few weeks [the] San Francisco startup executed a flurry of transactions that shifted ownership of several foreign subsidiaries to Uber International C.V. and formed an agreement with the Dutch business to split the profits from Uber’s intellectual property. By mid-June… nearly all its ride-share income outside the U.S. would be effectively shielded from US [and UK] taxes.”) 

Such a law-oriented focus has met with a certain amount of success. The California state labor commission has deemed that Uber’s so-called “partner-drivers” are actually employees (and not independent contractors), with all the responsibilities regarding their right to a wage, benefits, sick pay, retirement pension and so forth this implies for the company. Florida has made a similar ruling, as has a tribunal in London. Meanwhile the cities of Rio de Janeiro and São Paulo have both made moves to prohibit Uber altogether. When it comes to Airbnb, officials in Berlin have introduced regulations prohibiting users from renting out more than 50% of an apartment for less then two months without permission from the city council--at the risk of a 100,000 euro (£85,000) fine. In San Francisco hosts are only allowed to let their properties for a maximum of ninety days a year, with the city able to fine Airbnb up to $1,000 a day for any property it advertizes that is not registered with the authorities.  Reykjavik in Iceland has even introduced legislation that means those offering rentals in their properties for more than 90 days a year have to officially register as businesses and pay business tax. 

Yet the state and ubercapitalism are not two different entities. The situation is not one in which the state can be relied upon to act as a counterbalance to, or some kind of reformist brake on, ubercapitalism, giving it a more humane, democratic aspect: say, by providing those who are self-employed with more government assistance in the form of maternity pay, pension provision, and an easier system of taxation. The state is intricately bound up with it, one of the tenets of neoliberalism, after all, being that the state should serve capital and private interests. In fact, the success of the state today is often determined by its ability to support the market, if not achieve economic growth.

Consider the way many businesses rely on the state to top-up the wages of their workers with benefits; or how many governments have been forced to borrow vast amounts to pay the debts created by the banks and financial capital and keep the economy functioning. In fact, for a long time Amazon received more in government grants in the United Kingdom than it paid in tax. Moreover, in 2014 Facebook paid just $4,327 in U.K. corporation tax, despite having revenues here of £105 million, and total worldwide revenues of $12.5 billion. Similarly, Airbnb may be valued at £23 billion and have two million properties worldwide, with 40,000 in London alone. But it was still able to use its company in Ireland to arrange to pay only £317,00 tax in the United Kingdom in 2015. And even when the government of the U.K. did manage to persuade Google to pay something in lieu of unpaid taxes stretching back over a decade, it was only able to obtain £130 million when between 2005 and 2014 the technology company had sales of over £24 billion, on which it reported profit margins of between 25 and 30 per cent, which means it had a profit somewhere in the region of £7.2 billion. (With U.K. corporation tax over the last ten years having been above 20 per cent, this means Google has been able to negotiate a tax rate of around 3 per cent. To put this in further perspective, when Sundar Pichai became Google’s CEO in October 2015 after its reorganisation into Alphabet, he was awarded 273,328 shares, which at £138 million is worth more than Google is paying in U.K. tax.)

Indeed, one reason companies such as Amazon, Facebook, and Google have had sufficient finances to be able to continue striving to grow their market share and become a monopoly, even when for long periods they have not been able to turn a profit, is because they have not given very much of their money to governments in the form of tax. If treating their labor force as independent contractors is one way of reducing costs and maximizing profit for these companies, aggressively finding ways to pay as little tax as possible is clearly another.

The state is thus currently too weak, too much a part of ubercapitalism, to be able to save us from it. (This is evident from the way many of these corporate sharing economy companies are able to continue to run their operations even in cities that have prohibited them. Furthermore, the Google Transparency Project has discovered 80 cases of staff moving between Google and government in Europe, and 251 cases in the U.S.). Nor is this suprising, given that for some time now government has been more about actively reducing the size and scope of the state, smoothing the way for corporations to take over many of its functions, while at the same time enabling neoliberals not to “govern as little as possible but to govern everything down to the last detail,” as Maurizio Lazzarato emphasizes--to the extent of ensuring the state and public sector not only supports the market but frequently operates in terms of market rationality itself. Witness the attempt to introduce the Transatlantic Trade and Investment Partnership (TTIP), Trade in Services Agreement (TISA) and Trans-Pacific Partnership agreement (TTP), all three of which would have severely restricted the power nation states have over corporations. TTIP, for instance, would enable companies to use secret courts to sue countries that pass local laws that are unfriendly to their business. Witness also the introduction of the Comprehensive Economic and Trade Agreement (Ceta) between Canada and the EU--often referred to as a “backdoor for TTIP.” Like the latter, Ceta gives companies the power to sue countries that introduce laws that threaten their profits, including those they may make in the future.

So it is not that ubercapitalism wants to get rid of the welfare state entirely: it’s rather that welfare in this society is to be provided first and foremost to businesses and banks. Evidence the commitment the U.K government is rumored to have given the Japanese car manufacturer Nissan, which has a large manufacturing plant in Sunderland in the north east of England, that “extra support” will be provided “in the event Brexit reduces its competitiveness.” Seen in this light it is hard to believe a regulatory approach that tries to make the platform capitalist companies of the sharing economy further accountable to the state and its democratically made laws regarding employment, competition, and tax--say by introducing some form of legislation or audit to ensure openness and transparency--can have too much success over the longer term. And all the more so given the power of these corporations to employ an army of pans-national lobbyists, advertisers and others to help sway public and political opinion in their favor. (The third person hired by Airbnb was a lobbyist, while by June 2015 Uber had at least two hundred and fifty lobbyists; and that is just in the United States. Uber also hired the resigned deputy commissioner of the New York City Taxi and Limousine Commission to be its first ever head of policy development and community engagement in the city. This is not insignificant, since it is estimated that during the evening rush hour ten per cent of all vehicles in lower Manhattan are Uber cars. So much for the sharing economy reducing environmental impact!) More likely, such reformism will at best change the behaviour of a small number of particular companies, producing important yet relatively minor changes in corporate behaviour with the help of occasional moral outrages at Google-esque tax avoidance or Sports Direct-like “Victorian workhouse” practices, while doing little to alter the overall system whereby ubercapitalism is presiding over the dismantling of social democracy.