Posts by Working Stiffed | Working Stiffed

Uber’s On-Demand Economy and the Decline of the U.S. Worker

Uber is a German word that means above the rest. It is also the apt name of a popular mobile app transportation network company. For those of us trying to survive in the growing on-demand economy promoted by Uber, images of goose-stepping armies of gig economy fascists readily spring to mind. And my futurist crystal ball tells me that it’s in our best interest to stay out from under their technocratic jackboots.

Uber has attracted a lot of attention recently, both positive and negative, for proudly trying to redefine full-time employees as contractors.

Their business model isn’t new; Corporate America has been embracing transient labor in order to avoid paying employee benefits and related corporate taxes for some years now.

Unlike Uber, they don’t brag about it, though. After all, displacing full-time employees for contractors, many of them overseas or foreign nationals here on visas, still doesn’t play well in Peoria; just ask Disney.

No, Uber is proudly spinning its business model as one that entrepreneurial thought leaders are embracing in order to survive and thrive in our brave new world. What’s not to love? Their drivers are business partners, not employees.

Many millennials cheer Uber’s entrepreneurial passion, especially those who earn their bitcoins by sucking on a tech company’s teat. They feel we need to be free agents in order to innovate, or we deserve to disintegrate. How else can you become a mini-Zuckerberg and invent an app that Google, or even Zuckerberg himself, will buy from you for billions?

I admire their spunk, but as someone who’s navigated through a few boom and bust economies, this business model looks a lot like a sweat shop in silicon clothing.

We can’t be too surprised by the rise of the on-demand economy and companies like Uber (or Uberettes, as I like to call Uber-like startups). After all, we have become increasingly impatient consumers; millennials and boomers alike want instant results and gratification: we want a cab NOW; we want our Web-purchased goods NOW; we want everything NOW.

The more affluent among us don’t even mind Uber’s other ingenious invention, “surge pricing.” It’s not enough that Uber doesn’t want to pay for its drivers’ FICA, Medicare, workers’ comp and health insurance; no, they also favor a pricing plan designed to bleed as much money out of their customers as possible, even during terrorist attacks.

Surge pricing sticker shock isn’t for the faint of heart or wallet. Last Halloween, a Denver man was changed $539 for an 18-mile ride that typically costs around $40. Uber even spiked rates in Sydney, Australia when a local café was under siege last Christmas. Ho-ho-no! Stories like these pop up in the news every day.

Uber’s CEO, Travis Kalanick, defends his business model by saying that if he’s forced to provide employee benefits or charge reasonable cab fares, his company won’t survive.

What if all CEOs felt as Kalanick and collectively decided to make all U.S. workers 1099 contractors? A cab driver is one thing, but would you feel safe leaving your child at a day care center staffed by contractors who could come and go as they please without a background check?

And what role, if any, has our over-reliance on a transient labor force played in the recent rash of cyber security breaches? Is it unreasonable to think that an underpaid, often offshore, contractor would sell your personal info to supplement his or her income?

Wouldn’t an employee who has a vested financial interest in keeping their job be more reliable in handling your customer’s sensitive information? I guess it’s easier to publicly blame North Korea or China for all such breaches; gotta keep those admin costs down and the shareholders happy, you know?

And then there are the other lifestyle perks that come with being part of the non-gig economy: credit. How many Uber drivers can qualify for a mortgage, a car loan, or even a credit card?

Banks aren’t adjusting their requirements to accommodate the on-demand economy. They still want evidence of secure employment and if you don’t have a steady (hopefully, fat) paycheck deposited biweekly into your account, you won’t find a lot of love or credit at Wells Fargo or Citibank, even if you’ve been driving for Uber for years.

If we allow Uber and its ilk to shift the labor force Overton Window and acclimate us to being part of an on-demand workforce, we’re building a seamless bridge to an even more dire reality: robots and AI (artificial intelligence).

Uber’s Kalanick admitted last year that he can’t wait to dump his “business partner” drivers as soon as driverless cars are more reliable.

He’s not alone. Notice how companies worldwide are gradually introducing robots into the workforce? Lowe’s publicly tested a multilingual sales assistant robot last year and a five-star hotel staffed entirely by robots just opened in Japan. All hail the coming technocracy!

The popular narrative is that AI is cool and robots are needed for jobs companies can’t fill with people (ironically enough, the latter narrative is similar to the one U.S.-based companies use to explain why they need to hire foreign nationals). That’s where this is heading folks: 1099 workers today, replaced by robots tomorrow.

The only hope we have of saving our earning power is through the power of the purse. Support companies that support their employees and don’t patronize any humanity-hating businesses that replace full-time employees with cheap labor or R2D2. In doing so, you may just save your future employment prospects.

They say you can catch more flies with honey than with vinegar (although no one has ever explained why you’d want to). Apparently, you can also catch more revenue if you treat your employees like honeys.

Numerous studies have shown that fairly compensated workers are more loyal to their employers and more committed to growing their business. Research also shows that workers who are given, and encouraged to take, paid time off are more productive and enjoy better physical and mental health.

So, why are so many 21^st century decision-makers hell bent on grinding their workers into pulp 24/7 at the lowest possible wage, stripping them of pensions and benefits, and outsourcing anyone they can? Did the “Successful CEO” handbook go out of print before an e-book could be produced?

Fortunately, there are a few visionary CEOs who get it, and they are reaping the financial rewards. Richard Branson tops the small, yet inspiring list.

Branson is not only reaching for the stars with Virgin Galactic, but he is a star to his employees. In a recent Inc. interview, Branson said you should “put your staff first, your customers second, and your shareholders third,” and his actions support these words. Branson’s latest act of employee generosity is to give new “Virgin” mothers and fathers up to a year of paid leave.

So, while most corporate leaders are “lowering admin costs” and dodging angry, unmotivated workers and frustrated shareholders, Branson is high-fiving his happy staffers and getting ready to fly to outer space…thanks to the buckets of money his motivated employees help him earn.

Then there’s Dan Price, CEO of Gravity Payments. This generous leader decided to raise the minimum annual salary of all 70 of his employees to $70,000 a year (nearly doubling the salary of many). Price bankrolled the move with three-quarters of the company’s profits and by cutting his own salary from $1 million per year to $70,000. He won’t give himself a raise until profits allow him to increase it.

Price would get along swimmingly with Centro CEO Shawn Riegsecker. His company offers employees with four years of service three-week paid sabbaticals. After taking a rejuvenating sabbatical, Riegsecker had an epiphany that his employees (and Centro) would benefit from enjoying a similar experience. Centro employees also get 10 “Ferris Bueller” days— they can take these vacation days for any reason.

Is Centro’s generous vacation/sabbatical policy hurting their bottom line? Actually, no. The ad software agency employs 600 people and enjoys continuous, impressive revenue growth.

Branson, Price, and Riegsecker aren’t just nice guys, they are good businessmen. As Riegsecker explains it: “I firmly believe that we’re moving in the world to a place where focusing on the happiness, health, well-being, and fulfillment of your employees is the number one determinant of success.”

True enough, especially when you consider that we have ample evidence that the “penny wise, pound foolish” business model is nothing more than economic cannibalism. Eventually, it eats everyone, even those at the top. At some point, CEOs of U.S.-based companies have to invest in their employees, so we can build a healthy, productive workforce that has money to spend.

In the interim, in the name of consistency, the reorganization/outsourcing junkies at the top of the corporate food chain should apply their “reorganization” plans across the board; not just to lower wage earners.

Since one of them is worth hundreds or more of us, their final act of corporate efficiency should be to outsource themselves in favor of cost-effective, innovative executives. And maybe, if we’re lucky, they will be replaced by leaders who follow Branson, Price or Riegsecker’s recipe for growth and enterprise-wide satisfaction.

If you’re over 50 and feeling your age, don’t look to Corporate America for validation; corporations these days seems to think you should quietly head to the white collar glue factory when you reach the half-century mark.

Today, long-term unemployed 50-somethings often find that reemployment is as elusive as finding a male Kardashian. Those of us who were born in the mid-60s are particularly vulnerable in this Great (lingering) Recession, even when we can find work.

According to an AARP Public Policy Institute survey, almost half of the respondents between the ages of 45 and 61 said they were earning less than they used to earn. Many also have limited or no benefits and are underemployed (working part-time).

Wedged between baby boomers and millennials, late boomers/early generation Xers who reach their 50s are being squeezed like an inconsequential economic zit. Despite our skills and professional maturity, few companies value what we offer enough to retain or hire us.

Thank God we’re a tough bunch. After all, we came of age after the boomers born in the 40s and 50s. With popular 80s mantras like “greed is good” and “the one with the most toys wins,” we knew right away that we had our work cut out for us…pun intended.

My boss at my first job out of college was a personable boomer dude who always praised my work. He dutifully gave me a raise each year; albeit a smallish one for the time, and he always apologized that he couldn’t give me more. Since we worked for a not-for-profit trade association, I never questioned his sincerity.

When he left for a cushier VP role at another company and I finally saw the budget (he never let me see it), I learned that we got PLENTY of money for raises each year; he just chose to keep most of the money for himself. Variations of this theme would pop up frequently throughout my career.

The “me generation” is STILL parked at the top of the corporate food chain. Although many of them can afford to retire in comfort, they’ve made it clear that you’ll have to pry their leadership roles out of their cold, dead hands. Too bad, Gen X.

And then there are the millennials. I feel bad that they are saddled with hideously bloated student loans, I do. But hey, they’re still young, and because they were weaned on iPads, they have plenty of time to develop an app that they can sell to Facebook for a couple of billion dollars.

I have always been an early adopter of technology, but like everyone over 45, I often find that I have to prove I’m not a Luddite. Last year, I interviewed for a management position at a digital marketing firm. My third interview was a group interrogation by the company’s late boomer CEO and his team of 20-something executives.

During the interview, one of them asked to see my phone. I think he expected me to pull out a flip phone, like one of those Jitterbug phones with the big numbers our parents like. I didn’t like my chances at that point.

Surprisingly, I got the job, but alas, it was short-lived. I was given a desk in an open floor plan, surrounded by my young colleagues. When I asked one of them one day where the printer was, he looked at me like I had crawled out of Jurassic Park; they never printed anything, he said…and they didn’t have any pens, either. So, shoot me, I thought. And that’s just what they did.

Apparently, in lieu of decent benefits and wages, this company determined that the best way to keep their young workforce from going postal while working 60 hours a week was to hand out Nerf blaster guns. Was this done to discourage them from considering real guns? Maybe. After all, sixty hour work weeks will take their toll on you, even if you are young.

Several times a day, someone would start shooting and then all hell would break loose. I was getting nailed by Nerf bullets while I was writing or on an important call. After two weeks, I took my shattered nerves and walked out of that digital romper room for the last time.

I’m not saying that we shouldn’t feel bad for the boomers who ended up on the wrong end of a Bernie Madoff deal, or for millennials who are stuck in low-paying jobs with huge student loans. We know all about them. And that’s the point.

As the Pew Research Center recently found, Generation X is “America’s neglected middle child.” We used to be too young to assume lucrative leadership roles from the boomers, and now millennials think we’re too old.

So, what to do? If few want to buy what I’m selling, maybe it’s time for me to pimp my cats on YouTube. A funny video of a cat with OCD might help put me back in the black, right?

If your Mickey Mouse ears are burning, it’s probably because you heard that Disney just committed the ultimate act of corporate douchebaggery.

Yes, the Mickey Mouse Club has closed its doors to 250 of its tech workers at Walt Disney World in Orlando, Florida. No, their jobs weren’t eliminated; they have been replaced by contract workers imported by a company, HCL America, that helps U.S. companies hire cheap labor from overseas. HCL has been contracting with Disney since 2012.

The story doesn’t end there, though. According to the New York Times, the displaced U.S. workers were told to train their replacements; and if the new hires couldn’t perform their new duties after said training, the discharged employees would lose their severance pay and benefits.

The Times reports that 85,000 H-1B visas are issued in the U.S. each year, but it looks like that’s about to change. Companies like Microsoft, Facebook, and Google are lobbying to increase the number of visas issued, claiming that there aren’t enough “highly skilled” workers available to fill critical positions.

Well, since Disney just displaced a few hundred “highly skilled” tech workers, why not start there, Microsoft?

Too many of us have found ourselves on the losing end of an H-1B visa, often more than once. With Disney pushing the sweatshop envelope even further, it looks like things are about to get a lot worse.

Meanwhile, for those of us who are running out of financial and employment options, there’s only one thing left to do. We need fly to Mexico, walk across our wide open border, and pretend to be from another country. We may not be able to make as much money as we used to, but at least we can secure a nice, low-paying job and free healthcare (right, Obama?).

It’s a small world after all….

We should have known we were in trouble when companies across America decided to re-brand personnel departments with the chillingly impersonal moniker, “human resources.” Seemingly overnight, employees morphed from living, breathing members of a company’s “family” or “team” to disposable “resources” or widgets. And it’s even worse for job applicants.

These days, unless a company wants to hire you, their HR department treats you like you were some drunk they picked up at a bar. They take you home, have their way with you, mutter “I’ll call you” as they push you out the door, and you never hear from them again.

When you’re out of work, it’s hard enough to muster up the mojo to shower, shave (if necessary), and get all cleaned up to go to an interview…or two…or three (if you’re lucky), especially when you’re so comfortable in your sweats and t-shirts for weeks on end between interviews. You know what I’m talking about.

Then there’s the time and consideration spent on selecting and submitting samples/evidence of your talent. Preparing for an interview (or multiple interviews) doesn’t just take time, it takes money many of us can’t spare (gas for your car, if you’re driving to an interview or carfare, and dry cleaning or purchasing interview suits/clothes).

So, when you’re done with the dog and pony show and they decide you didn’t make the cut, why don’t HR recruiters call or email you to let you know they hired someone else and to thank you for your time and interest? When did this professional courtesy become unnecessary?

What, they had a hot date with a PowerPoint presentation? They were distracted by the donuts in the break room? They needed to send out another useless United Way fundraising email to their underpaid employees? Are they all trying to hide the fact that they are more than functionally illiterate (although, this may be a likely reason)?

Like most of you, I’ve known and worked with my share of HR people and they don’t seem to be saddled with a lot to do.

And when they do appear busy, it usually comes at your expense. They tend to pull you away from your 50-hour work week for an URGENT meeting about the holiday party, or to set up a task force to determine whether the company should replace the Skittles in the vending machines with tofu chips.

Seriously, why can’t these people acknowledge the effort you made to audition for their company?

Sorry, HR people…there is no excuse. On behalf of unemployed people everywhere who wait for calls that will never come, and to acknowledge your autistic-like indifference to the plight of those of us who DARE to ping your email box with our resumes, I propose we re-brand your profession once again; let’s just call you social misfits what you are: person-null un-professionals.

What do you think, fellow working stiffs? What would you call these gatekeepers of corporate incompetence?

Author: Working Stiffed

Uber’s On-Demand Economy and the Decline of the U.S. Worker

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Disney Slips its U.S. Employees a M-I-C-K-E-Y

In HR, F— You is the New Normal