by Thomas Klikauer and Meg Young

platform capitalism

It is undeniable that traditional labor relations have changed fundamentally since digitization has entered workplaces converting parts of capitalism into platform capitalism. This marks one of the biggest challenges for organized labor in recent years. Two significant waves of corporate restructuring have been triggered by the introduction of new digital technologies.

The first wave is accompanied by rationalization linked to computerization, digitalization, and algorithms. The impact of this can be seen in industries with established trade unions. In these industries and companies, trade unions were strongly affected by digitization and platform capitalism. Examples are Germany’s automotive industry and its retail sector.

The second wave is related to the general rise of the platform economy. Parts of platform capitalism have been called smart manufacturing. Smart manufacturing links industrial production with big data, machine learning, persuasive technologies, and digital technologies. This is done for the purposes of increasing work performance, work intensification, even more efficiency in production, and, most importantly: to increase profits.

Yet, platform capitalism still is a relatively new form of work. And it is often metered out through corporate restructuring in, for example, many of Germany’s industrial sectors. Most of it dates back to the late 1980s when many important industries – e.g. Germany’s automotive and its machine-engineering sector – went through several waves of automation and rationalization.

From the point of view of Germany’s organized labor, these corporate developments put the core part of Germany’s industrial workers’ movement under renewed pressure. On the other hand, Germany’s trade unions have experienced many waves of rationalization, company relocations, and managerial changes to the composition of workforces (e.g. outsourcing) over the past decades.

Not only in Germany’s service industry, but the introduction of new business models (e.g. online booking platforms, etc.) in the wake of digitalization, has triggered a downward trend in terms of wages and working conditions. This has put many trade unions in the service industry on the defensive.

Since the early 2000s, digitalization has had a rather disruptive effect on long-standing working relationships in industries, such as Germany’s financial services and its retail sectors. In these industries, digitalization was seen as a threat to an organized workforce because corporate restructuring often led to severe job losses.

As a consequence, the rise of platform capitalism and the accompanying digitalization of work have often resulted in rather defensive industrial disputes. In those, many workers and their unions have fought against imminent job losses, falling wages, and a severe lowering of standard working conditions. Faced with this, German labor has resorted to institutional (trade unions’ bureaucracy) and organizational (labor movement) power.

Despite the onslaught of capital, many trade unions were still able to find creative ways to deal with managerial restructuring strongly impacting on two sectors that came under relentless managerial pressure to change: Germany’s automotive industry and its banking sector.

Together with restructuring under digitalization and the advent of platform capitalism, a second form of workplace changes came in the wake of Germany’s green transformation of the automotive industry (electrification), as well as the digitalization in Germany’s banking sector. Both had an enormous impact on traditional employment relationships and working conditions.

German trade unions remain strong in these industries. They rely on a solid organizational power. This is reflected in a relatively high level of trade union density in Germany’s car industry. Beyond that, Germany’s works councils’ system provides trade unions with structural power. This allows trade unions to interrupt manufacturing processes and services, when fighting for better working conditions and against job losses. Lastly, there is also an institutional power originating in high levels of collective bargaining coverage.

This has placed the automotive and banking unions in a relatively good position compared to established industries, such as the textile and clothing industry, and retail. In short, German trade unions were in a rather stable position for the largely defensive strugglers to maintain jobs, decent wages, and decent working conditions.

It is somewhat unfair to portray unions as if they were only seeking to protect what they have already achieved. Even though German capital has put trade unions under severe pressure, unions have been striving to actively shape the introduction of digitization and online platforms. In other words, unions have been able to put their own ideas about workplace changes forward.

The key union strategy has been a sort of a forward-looking agenda while – simultaneously – being forced into the defensive [offensive Agenda in der Defensive]. German trade unions were able to pursue this in order to improve working conditions by using their detailed knowledge about the world of work. Given their power and their pro-active engagement, German trade unions moved into the role of agents of change co-shaping managerially-driven innovations.

In many cases, this brought unions to the negotiating table with management. Obviously, the extent to which this pro-active union agenda was pursued was stronger with those trade unions which had greater institutional power. They were able to operate some sort of conflict partnership – a mixture of pro-active engagement with management, and a readiness to fight against corporate management.

Beyond that, German trade unions are still recognized in their role as negotiating partners with employers and the state. However, trade unions’ ability to act, depends – as always – on active membership, participation, and what might be called strategic, i.e. pro-active and forward looking union leadership. These ingredients have been pivotal for the success of German union.

Yet, Germany’s rapidly growing platform economy has created completely new industries and business models, in which labor regulations remain weak while Germany’s trade unions still have little experience in organizing online workers. These new industries include location-based platforms in the transport sector with service companies such as, for example, Uber. Yet, there are also powerful cloud platforms run by online corporations.

Beyond that, the sector is also defined by the so-called self-employed, freelance work, and crowdwork, often organized by platforms such as Crowd-Flower. And, there are online retail giants such as Amazon with their large distribution centers.

Many of these platform companies run algorithmic management system engineering a form of employment in which workers are paid per clicks, or by orders (e.g. Deliveroo and Lieferando.de). Meanwhile, others rely on highly repetitive, despotism-on-demand systems, and physically demanding low-wage work (such as Amazon being forced to urinate in a Coke bottle).

In the wake of such inhumanities, the global platform economy has seen a wave of strugglers over wages, job security, and working conditions. These are often driven by grassroots initiatives and in some cases supported by unions. These mobilization efforts of workers often take place in an economic, political, and ideological context shaped by the ideology of neoliberalism that is highly disadvantageous to organized labor.

While platform capitalism provides employment and a miserable livelihood for workers, it also creates a precarious under-class of highly dependent so-called contractors. These are basically workers ‘on call’ where flexibility exists more for management and less for workers. Most of the struggles that are carried out by this newly emerging digital precariat aren’t just aimed at increasing very low wages. Workers also seek to regulate a largely unregulated sector while fighting to de-commodify work through labor regulations and social benefits.

Collective mobilization has also been taking place against harsh working conditions in location-based digital platforms in the transport sector, such as delivery and courier services. Many of these fights occurred among platform companies that have sprung up like mushrooms in the last ten years. Their virtual presence exists via digital applications creating many new regulatory challenges for the state. In most countries, there is still no clear legal framework safeguarding workers in digital platform companies.

Yet, the illusive promise of personal flexibility and unlimited job opportunities in this sector has attracted thousands of people to these platforms. Once employed, they are framed as partners, contractors, and freelancers. The availability of cheap and plentiful labor has led to an exponential growth of online companies over the past ten years.

Since many platform companies are rapidly expanding their businesses, the market for App-based services is flooded. Yet, the initial and well-orchestrated euphoria about platform work delivering flat rates per trip or delivery, high premiums, plenty of performance incentives, flexible working hours, etc. has quickly evaporated.

In many cases, platform companies supported by algorithmic management is setting tariffs (i.e. wages) unilaterally while running point systems, performance bonuses, and ranking systems. To a large extent, algorithmic management also determines the suspension and deactivation of online application – the firing of workers. Worse, algorithmic management controls the behavior of drivers through an algorithmic App.

Trapped in pseudo-self-employment – work without protection with very limited state labor laws – employees have next to no institutional power to defend themselves against management. As a consequence, platform workers experience an increasing deterioration of working conditions in the form of long working hours, falling incomes, unachievable and ever rising performance incentives, occupational risks (traffic accidents, road rage, etc.), and work controlled by inhuman algorithms in the form of an invisible, but always watchful, and above all, an always controlling boss.

Overall, online platform couriers and drivers are very much in the same situation as almost all other precariously employed people. Their repertoire of options to resist consists of a combination of conventional forms of resistance, as well as newly invented, so-called modular forms of digital collective action:

  1. The conventional repertoire focuses on petitions, court proceedings, and labor hearings of commissions, etc. conducted by drivers and courier companies.
  2. The second form focuses on collective actions including non-traditional strikes and digital protests, non-traditional meetings, the mobilization of public support through social media and networks, as well as the development of digital pro-union Apps owned and developed by employees themselves.

For example, in one joint campaign, protesting workers cycled to Deliveroo’s headquarters to draw attention to the dangers of cycling and to gain public support for the cause of the drivers. Several restaurants participated in the fight of the workers. These restaurants didn’t accept platform orders for the period of the collective action.

Other online drivers also switched to digital forms of protest. They carried out the first digital strike. In their collective action, drivers accepted online orders assigned to them by the corporate App for the time being, only to reject them two hours later.

In a similar case, drivers collectively switched off their Apps to interrupt business transactions. In other cases, trade unions initiated unconventional employee meetings. They carried out bicycle repair campaigns and ordered pizzas from numerous restaurants via the corporate App in order to have them delivered by the drivers to the same place, and thus convene a meeting.

In order to mobilize public support through social media and networks, the Association of Platform Workers (APP) became intensively involved in social media and networks after the strike in 2018. The goal was to gain public attention, sympathy, and support to end inhumane working conditions. Finally, in another case, airport taxi drivers developed their own ride-hailing App. Other workers established a communication App for its members designed for messages, digital membership, complaints, and alerts. All these new forms of collective action use digital technology.

In many cases, fundamental claims made by workers were pursued through collective action. Numerous couriers and drivers have been campaigning for wage increases in their sector of the platform economy. As a general rule, most income in the platform economy is gained from tariff rates, bonuses, and performance incentives.

Under algorithmic management, these are determined and frequently changed unilaterally by the management of platform companies using algorithms as justification. As Cathy O’Neil would say, these are Weapons of Math Destruction.

Couriers and drivers often resist management’s unilateral reduction of tariffs, bonuses, and performance incentives rejecting the associated drop in their income. Simultaneously, they are fighting for wage increases, improved working conditions, and work safety. Since platform drivers are increasingly exposed to the risk of accidents and illnesses due to their work in road traffic, they demand an improvement in their working conditions through improving occupational safety measures and the expansion of social security.

For most platform-based drivers, work only starts when they open the corporate App.  And, in some cases, various drivers have been subjected to a form of digital exclusion, wherein an employer denies the use of the App by blocking, deactivating, or even switching it off. This means no income for drivers.

In the struggle for a stable income and better job security, workers in several countries have taken legal actions against the managerial falsehood of workers being seen as self-employed, as well as the deliberate misclassification of workers as independent contractors. To improve labor relations in online platform companies, workers are pushing for the creation of regulated system of wage relations.

In other cases, workers have developed their own collectively-organized digital Apps. Supportive unions are pursuing two main goals: they want to combat the increasing competition from Uber, etc.; and they seek to meet the needs of technology-savvy customers and for drivers to use their own union App for member service, the organizing of new members, and for industrial action against online companies and corporations.

In conclusion, many platform couriers and drivers have engaged in battles during the last few years. They are aware that they can rely on their collective power by using disruptive abilities digitally and analogously. Workers’ power is further strengthened by the logic of platform capitalism which brings together a low–income workforce with a common interest for betterment.

For this, platform workers use (digital) strikes as an important means of dispute (structural power) and, thus establishes an organizational power in the digital economy. They also seek the support of community initiatives, interest groups, associations, cooperatives, and trade unions. Some online workers have also developed new socio-technical approaches that are now controlled by workers – themselves. They are now programming their own Apps by trying to circumvent the profit-oriented corporate algorithms that makes platform capitalism possible.

Thomas Klikauer has over 750 publications including a book on Media Capitalism.

Meg Young (GCA and GCPA, University of New England at Armidale) is a Sydney Financial Accountant & HR Manager who likes good literature and proof reading.


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